ORDER
Jeet Ram Kait, Member (T)
1. This appeal is directed against Order-in-Original No.170/2002 Dated : 7.10.2002 passed by Commissioner of Customs (Sea), Chennai by which he has held that the goods covered under bill of entry No. 412109 Dated : 22.07.2002 are 30 sets of Samsung Brand VCD Players of Model z820Me in CKD condition and 820 sets of parts of Samsung Brand VCD Players (395 sets of Model Z820Me and 425 sets of Model Z30Me). He has also determined the value of 30 sets of Samsung Brand VCD Players in CKD condition to be S$89/- per set (CIF) and S$62.08/- per set (CIF) in respect of 820 sets of parts of Samsung Brand VCD Players covered under the subject bill of entry. He has also confiscated the entire goods imported under the bill of entry No. 412109 dated 22.7.2002 and valued at Rs. 14,89,401.60 (CIF) under Section 111 (m) of the Customs Act, 1962. He however gave the importers an option to redeem the goods on payment of fine of Rs. 2.00 lakhs under Section 125 of the Customs Act. He has also imposed a penalty of Rs. 50,000/- on the importers under Section 112(a) of the Customs Act,1962.
2. Aggrieved by this order, the appellants are in appeal before us. Ld. Advocate Shri A.K. Jayaraj invited our attention to para 4.0 and 4.1 of the impugned order wherein it has been mentioned that the goods covered by the subject bill of entry packed in 91 cartons stuffed in 1×20′ container No. KLTU 1204710 lying at CONCOR CFS, were examined by the officers of Special intelligence and Investigation Branch on 26.7.2002 in the presence of representative of M/s. Joral Shipping Services Pvt. Ltd., Chennai, the CHA. For ready reference the detailed finding of the examination as recorded in para 4.1 of the impugned order are extracted herein below:
———————————————————————————
Carton No. Description of Goods Model No. No. of sets/pcs. Total
---------------------------------------------------------------------------------
1 to 10 PCB set of 2 pieces Z30Me 40 sets each 400
11 to 20 - do - Z820 Me 40 sets each 400
21 - do - Z30 Me Z820Me 25 sets
25 sets 50 sets
850 sets
22 to 51 CD Deck Mechanism Z30Me 14 pcs. Each 420
with guide door
52 to 81 - do - Z820 Me 14 pcs. Each 420
82 - do - Z30Me Z820Me 5 pcs.
5 pcs. 10
850 pcs.
83 to 85 AC Cord/Connecting Wires Z30 Me Z820Me 850 sets 850 sets
86
87 Remote control 450 pcs.
400 pcs. 850 pcs.
88 Screws 850 sets 850 sets
89,90 & 91 Pressed Metal / Plastic Z820Me 10 sets each 30 sets
Cabinet with front
panel for VCD player
(set of 3 pcs) with
instruction manual
----------------------------------------------------------------------------------
3. He also invited our attention to para 4.2 wherein if is stated that in on examination of the consignment it was observed that 30 sets of complete units (of model Z820Me) in SKD condition and remaining 820 sets complete (395 sets of Model Z820 Me & 425 sets of model Z30Me) but for the Pressed Metal / Plastic Cabinet with front panel for VCD player (set of 3 pcs.). Therefore it was alleged by the department that the goods had been intentionally imported in SKD condition in order to evade incidence of higher duty. It was also alleged that the importers have indulged into this sort of practice of importing the VCD players in a dismantled condition with the sole purpose of misdeclaring the value and thereby resorting to evade incidence of higher duty. In view of the above allegation the goods were seized on 26.7.2002 under a duly drawn mahazar under the provisions of customs Act. 1962.
4. Learned Advocate also invited our attention to para 8.0 of the impugned order wherein it is stated that on perusal of the computer data base for recorded prices for such goods, it was noticed that a consignment of 1500 numbers of Samsung Brand 3 CD, VCD MP3 Players Model Z300MEH/ETL (in CBU condition) covered under invoice No. 90005018 dated 11.4.2002 were raised by M/s. Samsung Electronics, Huizhou Co. Ltd., Chajiang Town, Huizhou City, Guangdon Province, China were imported by M/s. Samsung India Electronics Ltd., Noida vide Bill of Entry No. 269750 dated 2.5.2002 through ICD Tughlakabad, Delhi, and the value of VCD Player was declared at US$50 – CIF per set. In another clearance of Samsung Brand VCD Player of Model Z300MEH/XTL a quantity of 1700 sets were imported vide bill of entry No. 275976 dated 12.7.2002 at an assessable value of Rs. 2479.55/- per unit (equivalent to US$50.5). Therefore the import value of the complete unit of Samsung Brand VCD Player was found to be US$50/- Per unit CIF by the department. Further recorded price for the parts and components of Samsung Brand VCD Players were not noticed in the computer data base by the revenue. He therefore submitted that they had imported parts of model No. Z30Me and Model Z820Me including the alleged 30 sets whereas the department has compared the value of the complete VCD players of a different model Z300MEH/ETL ( in CBU Condition) covered under invoice No. 90005018 dated 114.2002 imported by M/s. Samsung India Electronics Ltd., Noida and also the value of Samsung Brand VCD Player Model Z300MEH/XTL and have not found the recorded price for the parts of components of Samsung Brand VCD Players from the computer data base. In other words, Revenue has compared the price of different models that too in respect of alleged sets of a different model and they cannot compare the value of different models and load the price in the assessable value. He further pointed out that the goods which have been imported by M/s. Samsung india Electronics Ltd., Noida were imported from China vide Invoice No. 90005018 Dated 11.4.2002 raised by M/s. Samsung Electronics, China whereas the present appellant have imported the goods from M/s. T.T. International Ltd., singapore under Invoice No. 73435 dated 15.7.2002, though the country of origin is china. The value of the goods can be compared only if the goods are from the same supplier and that too of foreign dealers situated in India. In this case the supplier are from two different countries and therefore their price cannot be compared and the value of the goods supplied by the exporters situated in various countries cannot be compared. He further submitted that even in respect of alleged 30 sets lot of parts are missing and Pressed Metal/Plastic Cabinet with front panel for VCD Player (set of 3 pcs) with instruction manual cannot form 30 sets and various parts are missing from that. Further he pressed into service the judgment rendered by the Tribunal of the West Zonal Bench in the case of Gebbs India Ltd. Vs. CC, Mumbai – 2002 (146) ELT 223 wherein it has been held that components of video display unit of computers cannot be said to be, complete unit was imported even if all or major components of the unit are imported. He also invited our attention to the judgment rendered by this Bench in their own case reported in 2003 (85) ECC 737 wherein also this Bench has held that value of complete sets, that is video cameras and Handicam video camera of Sony brand cannot be taken for the parts and Revenue cannot take the value of the full video camera and sincere there was no misdeclaration, as the parts of sub-assembly were fully disclosed in the respective bills of entry, the goods cannot be confiscated under Section 111 (m) of the Customs Act 1962, even if all or major components of unit are imported, it cannot be said that complete units were imported. It was also held that the value cannot be enhanced since the complete assembly operation invoiced in the manufacture of CTV is complex and not a simple assembly operation, to bring the imports under Interpretative Rule 2(a) of the General rules for Interpretations of Import Schedule. He also invited our attention to the judgment rendered by the Larger Bench in the case of Sony India ltd. Vs. CC, ICD, New Delhi – 2002 (82) ECC 436 (Tri – LB) wherein it was held that complete assembly operation involved in the manufacture of CTV is complex and not a simple assembly operation to bring the imports under Interpretative Rule 2(a) and the value of the complete machinery cannot be taken to arrive at the components imported by the importer. He also submitted that they have got various documents like Proforma Invoice and the form of order, invoice, packing list dated 15.7.2002, certificate of origin, etc., attested by the High Commission of India, Singapore. They have also submitted that they have taken the permission from Reserve bank of India and through Canara bank, Kilpauk, Chennai they have remitted the amount to the foreign supplier. In view of these documents being attested by the High Commission of India and remittance made through nationalised bank namely Canara bank after obtaining permission from Reserve Bank of India and since there is no allegation that they have remitted the extra amount through hawala to the foreign supplier and goods being of different model which are compared and supplied by different suppliers and different countries the transaction value has to be accepted by the department and they cannot load the value arbitrarily. He therefore submitted that the value as declared by them may be ordered to be accepted and the order of the confiscation under Section 111 (m) and order of redemption fine and penalty is required to be set aside with consequential relief to them.
5. Appearing on behalf of the revenue, DR Shri A. Jayachandran, submitted that the goods namely VCD players of Samsung Brand alone have been compared and the ld. Commissioner gave quantity discount for the quantity of 820 sets of parts and more over the appellant had themselves agreed for the enhancement of the value and had requested for a lenient view and adjudicate the case as the consignment had not been cleared for quite a long time and they have mis-declared the goods and failed in producing the manufacture’s invoice for the subject goods in spite of the direction to produce the same. He further submitted that in view of the importers’ own admission about the mis-declaration of the value, the value declared in the bill of entry cannot be taken as transaction value under Rule 4 of the Customs Valuation Rules, 1988. therefore the declared value cannot be considered as the value for the purpose of assessment in terms of Section 14(1) of the customs Act, 1962. Consequently the value has to be determined in terms of Section 14(1A) of the Customs Act, 1962 read with rules made thereunder and it was in this circumstance the value had to be determined by proceeding sequentially through the customs Valuation Rules, 1988 (CVR 1988).
6. Therefore by using the reasonable means, keeping in view the provisions of Section 14(1A) of the Customs Act, 1962 and in view of the voluntary acceptance of the importer for the enhancement of the value as above, the ld. Commissioner has rightly determined the value of 30 sets of Samsung Brand VCD Players at S$89/- per set and that of 820 sets of dis-assembled parts of Samsung Brand VCD Players at S$62.08/- per set (CIF) under Rule 8 of the Customs Valuation Rules, 1988. He, therefore submitted that their appeal is required to be rejected.
7. We have carefully gone through the case records, the submissions made both orally and written and various case laws as pressed into service by both the sides. The goods were examined and detailed finding of the examination of the goods was recorded in para 4.1 of the impugned order which has been extracted supra by us. We have also gone through para 8.0 of the impugned order wherein the goods of Samsung Brand 3CD, VCD, MP Players Model Z300MEH/ETL (in CBU condition) covered under Invoice No.90005018 dated 11.4.2002 raised by M/s. Samsung Electronics, Huizhou co. Ltd., Chajiang Town, Huizhou City, Guangdon Province, China were imported by M/s. Samsung India Electronics Ltd., Noida vide Bill of Entry No. 269750 dated 2.5.2002 through ICD Tughlakabad, Delhi were compared by the revenue with the imported goods which were of Model Z30Me and Z820 Me imported from M/s. T.T. International Ltd., Singapore vide their Invoice No. 73435 dated 15.7.2002 in respect of the alleged 30 sets. The order-in-Original is therefore is contrary to law and contrary to various judicial pronouncements by the Hon’ble Supreme Court, Hon’ble High Courts and various Tribunals, wherein it is well settled that goods of the same model and from the same supplier can only be compared to enhance the assessable value whereas in this case the appellant have imported different model and from a different country namely singapore whereas M/s. Samsung India electronics Ltd., Noida had imported from China. Further the appellants have brought on record the Proforma Invoice, Invoices and the remittance of the foreign exchange through Canara Bank, Kilpauk Chennai and various other documents to prove that all their transaction are bona fide. In view of this above we are of the opinion that the Revenue cannot take the value of the full VCD player for the parts and that too of a different model and since there is mis-declaration as all the parts of the value are disclosed in their respective bills of entry, the goods cannot be confiscated under Section 111(m) of the customs Act. Secondly in respect of the parts for which the comparable price were not pressed into service by Revenue as they did not have computer data base and therefore resort to the method of deductions and valuation under Section 14(1A) of the Customs Act cannot be countenanced as the goods imported cannot be compared with the contemporaneous imports and therefore they cannot enhance the value. This is well settled by various pronouncements by the Apex Court, High Courts, and the Tribunals. We also observe that there is no allegation of any hawala transaction remitted by them for the excess amount. This Tribunal in their own case reported in 2003 (85) ECC 737 (T) (supra) as well as the West Zonal Bench in the case of Gebbs India Ltd. – 2002 (146) ELT 223 and the Larger Bench judgment rendered in the case of Sony India Ltd. – 2002 (82) ECC 437 are in favour of the appellant.
8. We are therefore of the considered opinion that Revenue cannot compare the value of the full VCD player and since there is no mis-declaration and similarly they cannot compare the value of other different models for the purpose of assessment in respect of components/parts and they cannot press into service the provisions of Rule 8 of the Customs Valuation Rules, 1982 and resort Section 14(1A) of the Customs Act is not cannot. We also find that rule 2(a) of the General Interpretation rules of the Tariff is not applicable to such cases. We also hold that even if all major components of a unit are imported it cannot be said that complete unit was imported whereas in this case this Commission has held that only 30 sets were imported, whereas from the facts of the case it appears that they have imported only various parts. Commissioner has himself admitted that 820 sets complete were imported and he was not able to find any contemporaneous import in respect of these imports and his resort assessment purpose to Rule 8 of the Customs Valuation Rules read with Section 14(1A) of the Customs Act is not legal and proper. In view of the above facts and circumstances, we set aside the order of enhancement of value both in respect of alleged 30 sets as well as component parts. We also set aside the order of confiscation under Section 111(m) of the Customs Act. We also set aside the order of imposition of redemption fine of under Rs. 2,00,000/- (Rupees tow lacs only) under Section 125 of the customs Act and also set aside the order of penalty of Rs. 50,000/- against the importers under Section 112(a) of the Customs Act. We therefore do not agree with the order of the Commissioner of Customs (Sea), Chennai that the goods covered under bill of entry No. 412109 dated 22.7.2002 are 30 sets of Samsung Brand VCD Players of Model Z820Me and are in CKD condition. Thus the appeal is allowed with consequential relief, if any. Ordered accordingly.