ORDER
G.R. Sharma, Member (T)
1. These two appeals were heard together as they arise out of the same order and are being disposed of by this common order.
2. The facts of the case are that 1,627 watches and 3000 watch movements were seized by the Customs Authorities, as a result of search and recovery. No evidence for legal import of the goods of foreign origin was provided to the customs officers. A SCN was accordingly issued asking the appellants to explain as to why the seized watches and watch movements should not be confiscated and why a penalty should not be imposed. The issue was decided by the authorities below confiscating the watches and watch movements and imposing the penalty. The matter came up before the Tribunal in the form of an appeal. This Tribunal by its final order dated 9-8-98 released unconditionally 3000 of watch movements and remanded the matter back to the Commissioner that absolute confiscation of the watches was not warranted and that Rs. 1500/- taken as value of each watch was not correct and was required to be determined on the basis of wholesale price of these watches in India which would be around Rs. 500/- per unit and CIF value has to be worked out from this value of Rs. 500/-. The Commissioner passed the order taking Rs. 500/- as assessable value. This order was again set aside and the Tribunal remanded the matter to the Commissioner second time holding that the duty cannot be demanded on the basis of market value; that CIF value has to be worked out; that market enquiry reports so conducted should be furnished. The Commissioner again passed the order which is before us at present.
3. Arguing the case, Shri J.S. Agarwal, ld. Advocate submits that the impugned order has been passed in utter disregard of the two remand orders passed by the Tribunal dated 28-8-98 and 26-11-99 and that though there was specific direction to redetermine the assessable value in spite of the direction that CIF value has to be worked out when Rs. 500/- was the market value. Ld. Counsel submits that the authorities below had grossly erred by not following the said direction. In support of this, he cites and relies upon the decision of the Hon’ble Madras High Court in the case of Kamalakshi Finance Corpn. Limited 1996 (88) E.L.T. 343. He submits that the Hon’ble Madras High Court had followed the ruling of the Apex Court in this case; that in this case, the Apex Court ruled that judicial discipline requires that the orders of the higher appellate authority should be followed unreservedly by the subordinate authorities; that the fact that the order of the appellate authority is not acceptable to the department in itself an objectionable phrase is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. Ld. Counsel submits that CIF value on the basis of Rs. 500/- as market value per unit is worked out as Rs. 135/- after deducting the element of duty discount and other expenses. He submits that presently the market value of the watches ranges from Rs. 135/- to Rs. ISO/- per unit and even if the assessable value has to be worked out on market value, the total value would be Rs. 2,44,050/- at a rate of Rs. ISO/- per watch and not Rs. 8,13,500/-; that on this alone the quantum of redemption fine and penalty would depend. Ld. Counsel submits that the value of these watches had depreciated as later model had come to the market which are available at lower price.
4. On the question of imposition of penalty on Shri H.B. Wadhwa, authorised signatory, ld. Counsel submits that he is only an authorised signatory of the company and for him no commission and omissions has been mentioned in the impugned SCN or in the Order-in-Original; that no evidence has been brought on records that the watches are smuggled. Ld. Counsel, therefore prays that the order may be set aside and the correct value of the watches may be determined.
5. Shri S. Srivastava, ld. JDR submits that the watches were of foreign origin and, therefore the onus was on the appellants to prove that they were legally imported which the appellants did not discharge. He submits that confiscation of the watches is thus warranted and sustainable in law.
6. In regard to the value of the watches, ld. JDR submits that at the time of seizure of the watches, the value was higher. He submits that the Tribunal required the authorities below to re-examine and re-determine the assessable value, the authorities below have rightly taken Rs. 500/- as assessable value and accordingly the quantum of redemption fine was determined.
7. On the question of imposition of penalty, ld. JDR submits that the penalty was warranted not only on the company but also on Sh. H.B. Wadhwa who was concerned with the smuggled watches. He, therefore prays that the order may be upheld.
8. Heard the rival submissions. We find that according to the market report, the market value of the watches was Rs. 500/-. We further find that the contention of the appellants is that the market value of the watches cannot be the CIF value for the purpose of levy of duty. We find that the contention of the appellants is correct. If Rs. 500/- is the market value per unit then CIF value shall have to be arrived at, as it cannot be equal to market value. We note that the appellants contended that CIF value worked out as Rs. 135/- per unit. No rebuttal of this amount and in absence of any other evidence produced by the respondent, we hold that CIF value of the goods will be Rs. 135/- per unit. Accordingly redemption fine will be much lower than what has been indicated in the order appealed against. Looking to this aspect, redemption fine is reduced to Rs. 85,000/-. Insofar as the penalty on the appellant is concerned, we note that the appellant could not produce the evidence of legal import of the watches and, therefore, the penalty was warranted. However, looking to the facts and circumstances of the case, we reduce the penalty on M/s. Rahul Watches (P) Limited to Rs. 50,000/- and on Shri H.B. Wadhwa to Rs. 25,000/-.
9. But for the above modifications, the impugned order is upheld and the appeals are disposed of accordingly.