ORDER
Harish Chander, Member (J)
1. Since both the appeals emerge from the same impugned order and as such are disposed of by this consolidated order. The appellants M/s. Singh Radio and Electronics had imported 140 packages vide Bill of Entry No. 50020 dated 15-12-1983. The description of the contents of the said 140 Pkgs. had been declared in Col. No. 6 of the said Bill of Entry as ‘Tape Recorder parts-Sub-assembly – as per invoice attached.” As per invoice No. DMER-10, dated 31-8-1983 of M/s of entry, the unit price per sub-assembly was Japanese Yens 1030 G & I New Delhi and accordingly the assessable value of the said goods i.e. 2000 sets of Sub-assemblies had been worked out and declared in Col. No. 9 of the said Bill of Entry as Rs. 1,08,469/- after adding 20% as notional freight. One package out of the said 140 Pkgs. was opened and examined by the Custom Officers and was found to contain Sub-assemblies (Electronic populated Ptd. circuit Brands) of a Stereo Radio Cassette recorder and the remaining 139 Pkgs. had not been opened in view of the oral admission by the appellants that they also contain the same items. The packages were seized under Section 110 of the Customs Act, 1962. It was also discovered that the appellants had cleared another consignment from Bombay vide Bill of Lading No. F. 3/31-8-1983 containing besides other components of Radio Cassette Recorders prepared cabinets of make National Model RX-4960F duly affixed with metalic plates bearing markings “Dyanora”. The revenue authorities were of the view that “Dyanora” was written to avoid detection of the real make and model and consequential clearance of the goods against an Invalid Import Licence. On 14-2-1984 the officers of the Special Investigation Branch, Custom Collectorate, New Delhi searched the godown premises of the appellants situated at A-62, Naraina Industrial Area, Phase-l, New Delhi In < the presence of two Independent witnesses. Carton Nos. A 182 and A 662, selected at random, out of the 868 Pkgs., on examination, were found to contain 3 pieces each of prepared cabinets (comprising of frong, back, cassette cover and battery covers) and each of the back cover of the said prepared cabinets were found affixed with metalic plates bearing markings Dyanora Mod RX-4960F, Power source AC 110-115V/115-127V 200 in 220V-230-250V 50/60MV1600 Battery 6'B' size Batteries National UM.I or equivalent Part No. 77961 WA" Part No. 7961 WA; and on removal of the said metalic plates the following markings, were found engraved on the body of the back cover:
“National Pana Sonic
Model No. RX 49 60F
Power – Sons –
AC Z 110, Battery -6-
Matsushita Electric Co. Ltd.
Made in Japan.”
the station Dials, fitted on the front covers, were found bearing markings BM-MW-SWI-SW2-4 Band Stereo Radio Cassette Recorder”. These 868 packages had been cleared from Bombay Customs vide Bombay Customs House Import Department S. No. 3030 dated November ’83 cash HC 408 dated 1-12-1983, Bill of Lading No. F.3/31-8-1983 as ‘tape recorder parts” against Import Licence No. P/S/1934128 dated 17-8-1982 and P/W/0356055 dated 29-7-1982 and were seized under Section 110 of the Customs Act, 1962 by the Collector of Customs, New Delhi. On the basis of Invoice Nos. BMER 5, 6, 7, 8 & 9 all dated 6-9-1983 issued by M/s. Nagono Co. Ltd., Tokyo the assessable value had been worked out and declared in Col. No. 9 of Bombay bill of lading No. F.3/31 -8-1983 as Rs. 2,48,587/-. Assembly of each one components cleared vide Delhi Custom House Bill of Entry No. 50020, dated 15-12-1983 and Bombay Custom House Bill of Lading No. F.3/31 -8-1983 (Import Department S. No. 3030 dated November, 1983) shall form a complete Stereo Radio Cassette Recorder make National (Model RX 496 OF)- The total assessable (CIF) value of one such Stereo Radio Cassette Recorder in SKD condition according to the above mentioned Invoices, worked out to J. Yens 3973 CIF or Rs. 179.35 (exchange rate J. Yens 2279 Rs. 100/-). The said Special Investigation Branch had nxo records, F.O.B. price of completely assembled unit of make National Model RX-4960F as Rs. 800/- in the Bombay Custom House price list of October 1983 compiled on the basis of latest catalogues of leading mail order firms, magazines & company price lists. On the basis of the prevalent method of valuation, the F.O worked out as under :-
(i) Price/completely assembled set Rs. 800/- F.O.B.
(ii) (-) 40% discount (20% to arrive at
wholesale price, 10% Qty. discount &
10% for Import in SKD condition Rs. 320/-
(iii) Price per such set in SKD condition Rs. 480/-F.O.B.
According to the prices calculated in the manner detailed above the total assessable value of Delhi Custom House Bill of Entry and Bombay Custom House Bill of Lading worked out to Rs. 10,77,737/- against declared value of Rs. 3.57.056/-. A Show Cause Notice was issued to the appellants and in their reply to the Show Cause Notice the appellants had challenged the jurisdiction of the Delhi Custom House for the issue of Show Cause Notice In respect of a consignment cleared from Bombay and had denied the allegations made In the Show Cause Notice. The learned Collector of Customs had confiscated the goods cleared at Bombay contained In 868 packages and the goods contained In 140 packages cleared from CWC, Delhi under Section 111 (d) and 111 (m) of the Customs Act, 1982. He, however, permitted M/s. Singh Radio and Electronic Industries to redeem the same on a fine of Rs. 2,50,000/- In lieu of confiscation. He also Imposed a personal penalty of Rs. 2,50,000/- on Shri Sunil Chawla. The learned Collector had ordered the assessable value worked out above. Being aggrieved from the aforesaid order the appellants have come In appeal before the Tribunal.
2. Shri M. Ganeshan, the learned Advocate who has appeared on behalf of the appellants has raised the following points :-
(i) The Collector of Customs, Delhi had no jurisdiction to issue notice under Section 110 of the Customs Act, 1962 for 868 packages cleared at Bombay vide Bill of Lading No. F.3/31-8-1983 (Import Department Serial No. 3030, dated November, 83). Since the goods were cleared at Bombay it is only the Collector of Customs, Bombay who had jurisdiction and he could have resorted to the provisions of Section 28 of the Customs Act or Section 129D of the Customs Act, 1962. There was no suppression of facts on the part of the appellants. The same should have been done within six months under Section 28 or within one year under Section 129D of the Customs Act, 1962 and as such the order passed by the Delhi Customs is void.
(ii) The values declared by the appellants were correct. There was no middleman. The appellants had imported 2000 pieces, and In support of his arguments he had cited the judgment of the Tribunal vide order No. 607/85-A, dated 6-8-1985 in the case of Takara Electronics, New Delhi v. Collector of Customs, New Delhi in appeal No. CD/SB/320/85. He stated that in Takara Electronics case the value of Rs. 269.85 was accepted and the goods had come from Hongkong to Bombay and in the appellants case after adding 20% notional freight approximate value comes to Rs. 245. In Takara Electronics case the Bill of Entry was filed in January, 84 whereas in the appellants case the Bill of Entry was filed at Delhi on 9th February, 1984.
(iii) There is no violation of the ITC regulations.
(iv) There is no justification for the levy of penalty at Rs. 2,50,000/- and also no justification for the levy of redemption fine at Rs. 2,50,000.
Shri Ganeshan has further argued that in case the appellants’ plea for jurisdiction is not accepted then the declared value by the appellants may be accepted. He further stated that he has got no objection if the value adopted in the case of Takara Electronics be adopted in the appellants case also. He has pleaded for the cancellation of the fine and penalty and alternatively he has pleaded for the reduction in fine and penalty.
3. Shri S. Krishnamurthy, the learned S.D.R. who has appeared on behalf of the respondents has argued that the goods declared and goods imported were different. He has also argued that there was under-valuation. He fairly conceded that in the Show Cause Notice there was no charge of fraud or collusion. He has further argued that Takara Electronics order may be taken into consideration by the Tribunal. On the issue of jurisdiction he argued that Delhi Customs had jurisdiction.
4. We have heard both the sides and have gone through the facts and circumstances of the case. There is no dispute that 868 cartons were cleared by Bombay Custom House vide Bill of Lading No. F.3/31-8-1983 (Import Department Sl. No. 303 of 10th November, 1983). Shri M. Ganeshan, the learned advocate had challenged the impugned order on the issue of jurisdiction. In the Customs Act, the jurisdiction is territorial-cum-functional jurisdiction. That is to say, jurisdiction is vested in the authorities appointed under Section 4 for the territories notified therein. The goods were Imported at Bombay Port and were allowed clearance under Section 47 by the proper officer of Bombay Customs and thereafter the goods were taken out of customs charge and then the goods arrived at New Delhi and an order under Section 110 was passed by the Delhi Customs. An order under Section 47 having been passed by the proper officer of Bombay Customs, it was not the duty of Delhi Customs. Delhi Customs should have informed the Bombay Customs for appropriate action in accordance with Law. The Tribunal in the case of Metro Exports v. C.C. Cochin reported in 1988 (14) ECR 169 had held that only the authority before whom the party (has) given an undertaking to comply with the terms of the Customs, has the jurisdiction to question the non-compliance with the conditions laid down. It was further held that the authority of the Collector of one Port to demand duty on goods imported elsewhere could not be established by drawing an analogy with Central Excise Rule 196. Para Nos. 10 & 11 from the said judgment are reproduced below :-
“10. Since the two preliminary submissions of Shri Jain are fundamental to the validity of the impugned order, we propose to deal with them first. Taking first the question of the Cochin Collector’s jurisdiction to demand duty In the present case, we have to note that the import of the goods took place at Madras. Their clearance duty free in terms of Customs notification was granted at Madras. In terms of the said notification, a claim was required to be made to the Collector of Customs, Madras for exemption from duty. A bond/legal undertaking for complying with the conditions specified in the notification was to be executed before such authority as may be approved by the Central Government. A declaration was to be filed by the appellants before the Assistant Collector binding themselves to pay on demand an amount equal to the duty leviable, but for the exemption, on the Imported materials in respect of which the conditions laid down In the notification had not been complied with (this declaration was filed before the Assistant Collector of Customs, Madras). There is, therefore, no manner of doubt that the Assistant Collector of Customs or the Collector of Customs, Madras was the proper authority who was to return a finding of non-compliance with the conditions laid down in the notification and to demand customs duty in respect of the quantity of goods in respect of which the conditions were not complied with. It is, of course, true that the use or utilisation of the imported materials in the present case was not in the Madras Collector’s jurisdiction. If the Cochin Collector had reason to believe that the conditions laid down in the notification had been violated necessitating proceedings against the appellants which could have led to demand of duty, penalty, etc., the proper course would have been for him to report the matter to the Collector of Customs, Madras to enable the latter to proceed against the appellants in accordance with law. The Cochin Collector, however, seems to have assumed jurisdiction to deal with the matter himself. The analogy with Central Excise Rule 196 as sought to be drawn by Shri Naik is inapplicable. The rule itself provides for demand of duty by the proper officer having jurisdiction over the applicant-user who may have got his requirement of materials cleared duty-free or at concessional duty in terms of Rule 192 from a manufacturer situated in another officer’s jurisdiction. Such is not the case here. The two decisions cited in this context are of no help to the Revenue. Shri Naik has sought to justify the demand on the plea that what was demanded by the Cochin Collector was not really duty but only an amount equal to the duty leviable. This contention is, on the face of it, untenable. For one thing, what the notification makes the importer liable to pay on demand is an amount equal to the duty leviable but for the exemption. No doubt the duty has to be quantified in an amount but, for that reason, it does not cease to be duty. For another, the Collector himself has no such illusion. He has quite clearly and categorically asked the appellants to pay the customs duty demanded In the show cause notice. If indeed the amount in question was not duty it could not have been demanded in terms of the adjudication order under the Customs Act but only In enforcement of the bond or legal undertaking executed by the appellants, if necessary through appropriate proceedings in a Civil Court. Shri Naik’s contention has, therefore, to be, and is rejected.
11. The department has not produced any notification or other legal provision (none has been placed before us) under which the Cochin Collector was conferred jurisdiction to demand duty in respect of goods imported at Madras and cleared by the Madras Customs either generally or in this particular case. The Central Government has issued notification under Section 4 of the Customs Act appointing Collectors of Customs and lower officers for different jurisdictions. In terms of these notifications, the respective jurisdictions of the Collectors have been dearly spelt out (see for example Notification No. 36-Cus., dated 1-2-1983, as amended). Notification No. 37 dated 1 -2-1963 as amended, appoints the Collector of Customs and Central Excise, Cochin, as the Collector of Customs in his jurisdiction. Evidently, it does not extend to Madras Port for which the Collector is the Collector of Customs, Madras, vide Notification No. 36, dated 1-2-1963. There are, of course, a few officers appointed as Collectors with all-India jurisdiction such as the Director of Revenue Intelligence but the Collector of Customs, Cochin is not one among them. In these circumstances, we hold that the Collector of Customs, Cochin had no jurisdiction to demand duty in the present case and, consequently, we set aside the demand.”
In the case of Ramnarain Vishwanath v. C.C., Calcutta reported in 1988 (34) E.L.T. 202 (Trib.) the Tribunal had held that If the goods were cleared by one Collectorate but seized by an officer of another Collectorate, then the seizure and adjudication by authorities of latter Collectorate are without jurisdiction. In the matter before us, the position is similar. Relying on the earlier judgments of the Tribunal we hold that Collector of Customs, New Delhi had no jurisdiction to pass any order under Section 110 and to adjudicate. The Collector of Customs, New Delhi should have reported the matter to the Collector of Customs, Bombay or any other authority having all India jurisdiction. Accordingly, we set aside the findings of the Collector of Customs, New Delhi in this regard.
5. Now we deal with the issue of valuation. The Collector of Customs had adopted the total assessable value of Delhi Custom House Bill of Entry and Bombay Custom House Bill of Lading at Rs. 10,77,737/- against the declared value of Rs. 3,57,056/-. In para No. 4 we have held that the order passed by the Collector of Customs, New Delhi in respect of the goods cleared at Bombay is without jurisdiction and as such we have to look into the valuation aspect of the goods imported at Delhi. The appellants had declared the value In respect of 140 packages containing sub-assemblies (Electronic Poluted Ptd. Circuit Brands) of a Stereo Radio Cassette Recorder at Rs. 1,08,469/- after adding 20% as notional freight. The revenue had worked out the F.O.B. price per such Stereo Radio Cassette Recorder, in SKD condition as under :-
(i) Price/completely assembled set Rs. 800/-F.O.B.
(ii) (-) 40% discount (20% to arrive at whole-
sale price, 10% Qty. discount, and 10%
for import in SKD condition. Rs. 320/-
(iii) Price per such set in SKD condition Rs. 480/-F.O.B.
Accordingly, in view of the ratio proportion of 6:5:4 in the prices of Tape Deck Mechanism, Sub-assembly and plastic moulded extruded components, the component-wise prices worked out as under :-
(i) T.D.M. Rs. 192/- F.O.B./PC
(ii) S.A. Rs. 160/- F.O.B./Set
(iii) Plastic Camps Rs. 128/- F.O.B./Set
Since we have quashed the proceedings in respect of the Bombay Bill of Entry, we are only concerned with the value of the sub-assemblies imported at New Delhi. The revenue has not placed any evidence on record for adopting the value. The value has been based on the basis of Bombay Custom House Price lists. The facts of the matter before us are similar to the matter in the case of Takara Electronics, New Delhi. Tribunal had accepted the declared value in the case of Takara Electronics. Following the earlier judgments of the Tribunal in Appeal No. CD/320/85-A (Order No. 607/85-A dated 6th August, 1985) we order that the valuation as adopted in the case of Takara Electronics may be adopted In terms of order No. 605/85-A (607/85-A) dated 6th August, 1985. We accept the offer of Shri M. Ganeshan, the learned Advocate in this regard. Accordingly the order passed by the Collector of Customs in respect of sub-assemblies is modified.
6. The appellants had Imported 2000 sets of sub-assemblies and claimed the same under Release advice No. SI/MND-Delhi/9/83-ACC. dated 19-11-1983 for Rs. 64,600/- issued by the Assistant Collector of Customs, Madras against Import Licence No. PW/0356055 dated 29-7-1982 and R.A. No. S/32-Bom/ND-Palam/172/83L dated 29-11-1983 for Rs. 23.200/- issued by Assistant Collector of Customs, Bombay against Import Licence No. P/Spl-934128 dated 17-8-1982. We have perused the Import Licences. The revenue’s finding is solely on the ground that the Import Licence was for Cassette Tape Recorders whereas the appellants had imported full Radio-cum-Cassette Recorders stereo sets. We do not find force in the arguments of the learned S.D.R. Accordingly we hold that there is no violation of I.T.C. regulations. In view of the above observations In para Nos. 4 & 5 there is no justification for the levy of personal penalty of Rs. 2,50,000/- on Shri Sunil Chawla and fine in lieu of confiscation at Rs. 2,50,000/- on M/s. Singh Radio and Electronics. Accordingly we set aside the personal penalty of Rs. 2,50,000 on Shri Sunil Chawla and fine in lieu of confiscation at Rs. 2,50,000 on M/s. Singh Radio and Electronics. In the result the appeal is partly allowed. Revenue authorities are directed to give consequential effect to this order.