ORDER
Archana Wadhwa, Member (J)
1. Vide the impugned order Commissioner of Customs has confiscated the imported copper scrap with option to the appellant to redeem the same on payment of redemption fine of Rs. 15,00,000/- on the findings that the same has been misdeclared in respect of the quantity as also the value. Further personal penalty of Rs. 5,00,000/- has been imposed upon the first appellant M/s. Drunkey Exports (P) Ltd. along with imposition of personal penalty of Rs. 5,00,000/- on the second appellant Shri Rajesh Sonthalia. In addition duty on the excess found quantity has been confirmed against them on the enhanced value.
2. We have heard Shri B.N. Pal, ld. adv. for the appellant and Shri T.K. Kar, ld. SDR for the Revenue. As regards the quantity of 82.354 M.T. excess found by the Revenue officers on investigations by DRI, the appellant have not disputed the same but have submitted that the same was sent in excess by the supplier than the ordered quantity, by mistake. He submits that since the said mistake was found by them, the supplier raised an additional invoice against the appellant for the said quantity. The above plea of the appellant has not been accepted by the adjudicating authority on the ground that the amended and revised invoices were sent by the supplier only after the investigations were started by the Revenue. He has also referred to the statement of the C.H.A. where he has recorded that importer had prior knowledge of the importation of the excess goods and the fact of misdeclaration of quantity is a deliberate act on the part of the importer.
3. As regards valuation ld. adv. has submitted that the valuation has been enhanced from declared value of US Dollar 1065 per M.T. to US Dollar 1262 on the sole ground of the prices as indicated in London Metal Bulletin. He submits that the Tribunal in a number of cases has held that LME prices are not to be followed unless there is an evidence to the effect that the transaction value is not the correct value. Ld. adv. has also drawn our attention to the submission before the Commissioner wherein it was brought to his notice that as per practice being followed in Mumbai Customs House, the declared price is accepted after 15% discount is applied on the L.M.E. prices. If that discount is extended to them their declared price is acceptable.
4. We have also heard Shri T.K. Kar, ld. SDR, appearing for the Revenue who submits that that no foreign supplier would send huge quantity of copper scrap totally valued at around Rs. 50,00,000/- without any order from his customer. Such a mistake was not detected by the foreign supplier till the initiation of the proceedings in India by DRI. This fact itself is indicative of the mala fide intention of the importer. As regards valuation he submits that L.M.E. prices should be adopted.
5. We have considered the submissions made from both the sides. As regards the misdeclaration about the quantity of the copper scrap, which is to the tune of 82.354 M.T. we find that the appellants have not disputed that the said quantity was more than the declared quantity. However, it is their contention that the same was sent by mistake by the foreign supplier. We do not find any merits in the above contention of the ld. adv. From records it is clear that the entire exercise of getting in touch with their foreign suppliers and raising of supplementary invoices by the foreign supplier is only after the DRI stepped into the matter and started investigations. There is no explanation by the importer as to why the foreign supplier would send such a huge quantity of goods inadvertently; as to why the foreign supplier would not come to know of the said mistake, even if committed, for a period of about a month after shipping bills; why is it that the foreign supplier realised their mistake only after start of DRI investigations in India. The answer to the above question is clear that the revised invoices for the excess quantity was raised by the foreign supplier at the behest of the importer after the start of the investigations. The said plea of the appellant has been rightly rejected by the adjudicating authority. Accordingly we hold that there has been a misdeclaration on the part of the importer as regards the quantity of the scrap.
6. As regards the valuation we find that the Tribunal in the case of Prabhu Dayal Prem Chand reported in 2003 (156) E.L.T. 922 (T) = 2002 (53) RLT 891 (CEGAT – Del.) has held that transaction value of copper scrap is not to be rejected on the basis of the prices indicated in L.M.E. Bulletin when there is no corroborative evidence of contemporaneous imports on the higher price. Similarly is the other decision of the Tribunal in the case of 2002 (140) E.L.T. 306 (T) = 2002 (48) RLT 111 (CEGAT) CC, Nheva Sheva v. Sangeeta Metals India. It was observed that the London Metal Exchange prices are only indicative of the prevailing market price, but in the absence of any contemporaneous imports of identical goods reliance on LME cannot be sustained. Inasmuch as in the present case there is no other evidence for enhancement of the value we do not find any justification in doing so. Accordingly that portion of the impugned order vide which the Commissioner has enhanced the value, is set aside.
7. Inasmuch as the appeal has been partly allowed on the point of valuation and has been partly rejected on the print of misdeclaration of quantity, we reduce the redemption fine from Rs. 15,00,000/- (rupees fifteen lakhs) to Rs. 7,00,000/- (rupees seven lakhs). Penalty imposed upon the first appellant M/s. Drunkey Exports is also reduced from Rs. 5,00,000/- (rupees five lakhs) to Rs. 2,50,000/- (rupees two lakhs fifty thousand). However, penalty imposed on Shri Rajesh Sonthalia, the second appellant is set aside in toto. Both the appeals are disposed of in above terms.
