ORDER
Shri S.L.Peeran
1. This appeal arises from Order-in-Original No.91/2001-CAU dated 24.5.2001 despatched on 8.6.2001 which was re-adjudicated by the Commissioner on remand by the Tribunal by their final order No.347/2001 dated 4.3.2001. The Tribunal in the remand order gave specific directions for re-adjudicating the case in the light of Apex Court judgment rendered in EICHER TRACTORS LTD Vs CCE reported in 2000 (122) ELT 321(SC) and that of this Bench judgment rendered in the case of TAPAN TRADING CO., by final order No.1754/2000 dated 5.12.2000. The findings recorded by this Bench in the final order No.1754/2000 dt 5.12.2000 is reproduced herein below;-
“4. On consideration of the submissions, we notice that the issue for consideration lies in a short compass. Therefore, the prayer for taking up the matter is accepted and the appeal is taken up for consideration as there is enough time left with the Tribunal. Further, on consideration of the submission, we notice that the stay application is infructuous in view of the appellants not having cleared the goods. The only question that is required for consideration is whether the original authority has considered all the submissions made by the appellants in their written submission dated 7.10.2000 although they have voluntarily given up the right to show cause notice as well as personal hearing. Therefore, they cannot make grievance on all these points as rightly contended by the DR. However, the learned Counsel has shown that they had taken a ground in their reply dated 7.10.2000 that there was no under valuation for bulk purchase and the negotiated price should be accepted in the light of the Supreme Court judgment in the case of Eicher Tractors (supra). We have also perused the written reply furnished by the appellants vide their letter date 7.10.2000 and we find that they have put down these grounds. From the impugned order, were find from that the Commissioner has not adverted to these pleas raised by them and no finding has been arrived at by him. There is no finding as to why the negotiated price for bulk purchase could not be considered in the light of the SC judgment cited. The counsel has brought to our notice latest ruling of the Supreme Court in the case of Eicher Tractors and the order of this Bench in the case of Tapan Trading Co. We notice that these rulings are required to be considered in as much as there is no finding with regard to these pleas raised by the importer. We find that the Commissioner has not adverted to these pleas made by the appellants in their reply dated 7.10.2000. Therefore, the impugned order is required to be set aside and the matter remanded to the Commissioner for de novo consideration. He shall grant personal hearing to the appellants and consider their explanation in the light of the Supreme Court judgment. Appellants are entitled to file their reply to the evidence relied upon by the department. The Commissioner shall dispose of the matter expeditiously. The Counsel at this stage prays for a direction to the department to dispose of the matter within four weeks from the date of receipt of this order. The Commissioner may consider this plea for expeditiously disposal of the matter.”
2. As can be seen from the facts of the case, the appellant’s contention was that they filed Bill of Entry pertaining to the goods imported by them declaring the goods as “Nylon and PVC coated fabrics”. They had imported these goods from M/s.Uniexcel Ltd., Taiwan and they were of Taiwanese origin. The goods had been tested in the Customs Lab and the following test result was furnished:-
“The samples are in the form of cut pieces of coloured woven fabrics on one side with PVC composition. The worn fabrics is entirely composed of manmade filament yarn of Polymide. The coating on one side of the fabric is visible to naked eye.
% of Nylon : 28
% of PVC Composition : Balance (72%)
Thickness of the sample : 0.37 mm”.
3. The department initiated proceedings on the basis of Bill of Entry filed by M/s.Rahul Enterprises who had also imported the goods declaring in their Bill of Entry as “PVC cloth” from the supplier M/s.Premio Industrial Co.Ltd., Taiwan. M/s.Rahul Enterprises price was higher than the price declared by the appellants in the Bill of Entry. Therefore, the authorities initiated proceedings to enhance the value as declared by the appellants at US$ 0.40 to US$ 0.65 per MT. Appellants took the plea that goods of M/s.Rahul Enterprises had not been tested and they were not same goods in nature, quality, quantity and therefore its price cannot be adopted. They forcibly pleaded before the Bench that the transaction value cannot be discarded unless evidence of contemporaneous nature is produced. They contended that Bill of Entry of M/s.Rahul Enterprises was of different goods and it was not of contemporaneous nature and the enhancement of value was not in keeping with the ruling of the Tribunal and the Apex Court judgment as held in EICHER TRACTORS LTD., 2000 (122) ELT 3 wherein the Apex Court had held that negotiated price amounted to 50 to 70% discount and list price was permissible and such discount even upto 70% is acceptable. Appellants contended that the quantity of their import was five times more than the quantity imported by Rahul Enterprises besides the plea that the goods were not to be the one and the same. Therefore, the Tribunal remanded the matter for de novo consideration within the parameters laid down by the Tribunal.
4. The Commissioner on de novo consideration has given a short finding in the matter. The relevant portion of the final order is noted herein below:-
I have gone through the case carefully. I find that the importers in the present case have heavily relied on the judgment of the Supreme Court in the case of Eicher Tractors. However, it may be pointed out that the import which is the subject matter of that case took place in December 1993. Subsequent to this, the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, was amended by inserting Rule 10(A) which empowers the proper officer to reject the declared value under certain circumstances when the importer is not able to justify the truth or accuracy of the value declared. Accordingly, the importers were called upon to justify the price declared. Their letter dated 7.10.2000 appears to have been filed in response to a oral request from the proper officer under Rule 10(A). In this letter, the main contention is that they have imported 5 container loads of the goods and therefore, they have been given a special discount. However, I find the importers have not produced any evidence to show that thee was any negotiation between them and the suppliers aborad. No correspondence to show that the importers are given a special quantity discount because they have taken a larger quantity is available on record. It is also not clear whether similar trade discounts are being offered to other importers. The importers have cited the decision of the Supreme Court in the case of Mirah Exports Pvt. Ltd. Vs. Collector of Customs. However, on examining this judgment, it is clear that thee were sufficient documentary evidence to show that under the suppliers’ pricing policy 20% discount was being given to certain categories of imports. It is also indicated that traders may secure lower prices, particularly, if they generated additional volumes of sales (Para 13 of the judgment).
Thus, there were documentary evidences to show that other importers were also being given 50 to 70% of discount. In view of this, the Hon’ble Supreme Court held that in that case M/s. Mirah Exports Pvt. Ltd. were entitled for the discounts claimed by them. On the other hand, in the present case, though M/s. Vintel Distributors have imported a larger volume, there is no documentary evidence to show they were given any special discount as a consequence. Therefore, the finding of Hon’ble Supreme Court in the case of Mirah Exports may not be applicable to the facts of the present case.
The Advocate of the importers had contended that the Hon’ble Supreme Court in the case of Eicher Tractors have held that transaction value can be rejected only under the conditions specified in Rule 4(2) of Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988. As already indicated, subsequent to the said imports, the rules have been amended authorising the proper officer to reject the transaction value under Rule 10(A) also. Therefore, thee is no infirmity in invoking Rule 10(A) and rejecting the present declared value. The importers have also contended that the imports by M/s. Rahul Enterprises, Banglore cannot be treated as identical because the present goods were declared as “Nylon Oxford PVC Coated Fabrics” whereas M/s. Rahul Enterprises has described as “PVC cloth”. Secondly, the exact chemical composition of the goods imported by M/s.Rahul Enterprises was not available as the goods were not tested. There is no dispute that the goods imported by M/s. Vintel Distributors and M/s. Rahul Enterprises were PVC coated fabrics, the thickness of both the consignments is Taiwan. Therefore, even if the goods are not identical, the similarity of these two consignments cannot be questioned. As already mentioned, the declared value has to be rejected under Rule 10(A) as the importers have failed to justify the truth and accuracy of the declared value. The next question is whether Rule 5 can be applied. Accepting the contention of the importers that the goods are not identical, the similarity of these two consignments cannot be questioned. As already mentioned, the declared value has to be rejected under Rule 10(A) as the importers have failed to justify the truth and accuracy of the declared value. The next question is whether Rule 5 can be applied. Accepting the contention of the importers that the goods are not identical, I agree that Rule 5 also may not be applicable. However, as mentioned above, Rule 6 authorises the proper officer to fix the price of the goods under import on the basis of transaction value of similar goods imported at or about the same time as the goods being valued. The present goods were imported in July, August and September 2000. M/s. Rahul Enterprises imported their goods in August 2000. Therefore, there is no doubt that these goods were imported at or about the same time as the goods were being valued. The imports of M/s. Rahul Enterprises are from Taiwan and the thickness of the goods was also 0.4mm and thus they conform to the definition of similar goods. I, therefore, order that price adopted for assessing the consignment imported by M/s. Vintel Distributors Pvt. Ltd., in terms of Rule 6 of the Customs Valuation Rules, 1988.
Accordingly, I find that in respect of past clearances as well as the present Bills of Entry, the value should be enhanced from US$ 0.40 per metre to US$ 0.65 per metre, and the differential duty shall be paid by M/s. Vintel Distributors. Since there has been a deliberate mis-declaration of the value with a view to evade payment of duty, I hold that the entire goods imported under 5 Bills of Entry already mentioned including past clearances are liable to confiscation under Section 111(m) of the Customs Act, 1962. The importer have also rendered themselves liable for penalty under Section 112(a) of the Customs Act, 1962. I find that they have already cleared goods valued Rs.10,34,784/- (Revised value) under Bill of Entry No.285256 dated 27.7.2000 evading a duty of Rs.2,08,267/-. In view of the deliberate mis-declaration and evasion of duty, they are liable fore penalty under Section 114A of the Customs Act, 1962, in respect of this Bill of Entry. In respect of other bills, they are liable to a penalty under Section 112(a) of the Customs Act, 1962. Accordingly, I pass the following order.
5. Ld.Senior Counsel Shri G.L.Rawal appearing for the appellants submits that finding of the ld Commissioner is totally misconceived and not in keeping with the directions given by the Tribunal. He points out that Revenue has not produced the evidence in the form of test results of the goods imported by Rahul Enterprises to show that the goods were one and the same evidence in the form of test results of the goods imported by Rahul Enterprises to show that the goods were one and the same with that of the goods imported by the appellants. The Commissioner had noted in the first paragraph the chemical test results of the appellant’s product while the test result of the Rahul Enterprises product has been noted only as ‘PVC Cloth” which cannot be considered as same as that of appellant’s goods “Nylon Oxford PVC Coated Fabrics”. The second point raised by appellants is that the quantity imported by Rahul Enterprises. He points out that they have negotiated price of contract and there was no proof of undervaluation and transfer of monies from any sources. Further, the discount even upto 70% or even more is permissible on bulk purchase as held by the Apex Court. He submits that the Ld. Commissioner has not given finding on this point except to deal (sic) the Mirah Export’s case and there the department had already produced documents housing discount of 50 to 70% while in the represent case, appellants did not produce the same. Further, Ld. Sr.Counsel also points out that the Ld. Commissioner has proceeded on his own basis to hold that the goods are identical without any evidence on record and thereby there is clear violation of the remand order. He submits that the transaction value and negotiated price were in terms of Section 14 of the Customs Act and the same cannot be rejected on ‘the basis of Bill of Entry of Rahul Enterprises which is not contemporaneous in nature and therefore, Revenue has not proved charge of undervaluation and value cannot be enhanced.
6. Countering the arguments, Ld. DR very effectively put forth the arguments and read out the Ld. Commissioner’s’ order. He points out that there is no violation of the remand order and the Ld. Commissioner has correctly and rightly given the hearing and discussed the points to uphold the Apex Court judgment. He points out that in common parlance the term “PVC Cloth” as described in the Bill of Entry of Rahul Enterprises is same as that of the description given by the appellants in their Bill of Entry viz. “Nylon Oxford PVC Coated Fabrics”.
7. Therefore, the Ld. Commissioner’s noting that country of origin being same clearly has held that transaction value can be rejected and he can proceed to assess and put to rule (5) of the Customs Valuation Rules to enhance the value. He submits that the order given by the Commissioner is to be accepted as Rahul Enterprises goods had clearly shown the thickness of 0.4 mm which conforms to the definition of ‘similar goods’ imported by the appellants.
8. Ld.Sr.Counsel in reply points out that thickness of the sample tested in their case was 0.37mm and was not 0.4mm as that of Rahul Enterprises. Therefore, the Ld. Commissioner was not justified in holding the thickness of both the goods to be the same. Ld. Sr.Counsel points out that even the Ld. Commissioner has noted in his order that even if the goods are not identical, the similarity of these two consignments cannot be questioned. Ld. Counsel submits that when Ld. Commissioner himself is doubtful about the goods being ‘identical’, he cannot quote the thickness of goods which was 0.37mm as per the test results to be same as that of description given in the Bill of Entry of Rahul Enterprises where the thickness of gods was 0.4mm and they are not conforming to the definition of “similar goods”.
9. On a careful consideration of the submissions made by both sides, we find lot of force in the submissions made by Ld. Sr.Counsel. The law on this aspect has been crystallised and clearly laid down by the Apex Court in the latest judgment rendered in the case of EICHER TRACTORS LTD. The latest judgment of MIRAH EXPORTS as well as BASANT INDUSTRIES Vs ADDL.COLLECTOR – 1996 (81) ELT 195(SC) and the clearly applies to the facts of this case. In the case of BASANT INDUSTRIES, the Apex Court had stated that mere comparison of invoices received by the importer with the invoice of import of same goods by other importer is not conclusive for determining the question of undervaluation. The Apex Court noted that there was considerable negotiations and the importer had made bulk purchase. A similar view was expressed by the Apex Court in the case of MIRAH EXPORTS PVT.LTD that when discount is given upto 50% to 70% on negotiation, same is required to be accepted. For the purpose of revising the value of the goods, Revenue has to at the outset establish that the goods are “similar” goods. It is admitted in the present case that goods of Rahul Enterprises were described differently as “PVC cloth” as against the declaration of the goods by the appellants in their Bill of Entry as “Nylon Oxford PVC coated fabrics”. Appellants goods have been tested and the results of the test has been extracted supra. From the extracted test result, we notice that the percentage of nylon is 28% with percentage of PVC composition is 72% and thickness of the sample is 0.37mm. Revenue has not brought on record the equivalent feature of the goods declared by Rahul Enterprises. The Ld. Commissioner has noted that Rahul Enterprises goods thickness was 0.4mm and also goods are not identical, and similarity of these two consignments cannot be questioned. We are not agreeable with this findings. The goods should be identical and not just similar which should correspond identically in the nature of goods in terms of quality, quantity, place of origin and time of origin. This has been well laid down both under Section 14 of the Act as well as the ruling of various judgments rendered by the Tribunal and the Apex Court. Admittedly, in the present case the goods are not ‘identical’. The Commissioner has on his own come to the conclusion that they are similar and must because they are similar, should be treated on par with the value declared by Revenue. In the absence of contemporaneous nature of goods by Rahul Enterprises, their Bill of Entry cannot be taken as that of “identical” goods for the purpose of enhancing the value of the appellant’s goods under Section 14 of the Customs Act. Further, the transaction value cannot be rejected unless there is strong evidence initially produced by the Revenue. The burden to prove undervaluation is on the Revenue as is well settled. In this case, the same has not been discharged by producing the evidence of contemporaneous in nature. Mere producing of the Bill of Entry of Rahul Enterprises which had different description of goods, and the goods not having been tested there and its features not brought out, therefore, we are not in a position to uphold the impugned order. The Ld. Commissioner has erred in not following the remand proceedings as well as in not in correctly applying and appreciating the Apex Court judgment which has laid down the law. The Revenue has not produced the evidence of contemporaneous imports in terms of identical goods of same nature, quantity & quality. Therefore, the appellant’s plea that there was negotiated price and the quantity was 5 times more than that of Rahul Enterprises and they were different goods is required to be accepted. Their appeal is to allowed by setting aside the impugned order with consequential relief. ordered accordingly.
(Pronounced & Dictated in open court)