ORDER
I.J. Rao, Member (T)
1. We heard Shri B.B. Gujral, the learned Advocate for the appellants and Shri A.S.R. Nair, the learned SDR for the Department. Both sides referred to an earlier judgment of the Bench involving the same issues and the same appellants, and disposed of by Order No. 552/88-A dated 7-11-1988 [1989 (39) E.L.T. 558 (Tribunal)].
2. Shri Gujral submitted that there were some differences in the facts of the two matters. We note that insofar as the validity of the licence is concerned the differences are minor. In the earlier appeal covers and shells for cassettes were involved but in the present appeal shells for cassettes are involved. In both the appeals the licence produced did hot admittedly mention the end-product as cassettes.
3. Shri Gujral in his arguments submitted that before Collector (Appeals) the appellants sought neither a show cause notice nor a personal hearing. Therefore, he pleaded that no extra reasons should be allowed to be advanced now by the Department.
4. We take note of this. We have considered the arguments. We first consider the question of the validity of the licence. The learned Advocate did made a distinction between the goods involved in the two appeals but the distinction is not material. The observations made by the Bench in paragraph 8 of our earlier order, reproduced below, equally apply to the facts of this appeal.
“We have considered the arguments of both sides. The learned Advocate did not produce a copy of the import licence because it was not available. However, we gleaned from what has been submitted by both sides that the goods imported were shells and outer cases of cassettes. Item 518 in Appendix 5 refers to plastic extruded/moulded components. SI. No. 689 (2) of Appendix 3 refers to audio cassettes without tape and parts thereof. This is what the appellants quite evidently imported. We also took into consideration paragraph 206 of the Policy Book for AM 1982 and applying the principles of interpretation contained therein we have no hesitation in holding that the description given in A-3 (689)(2) is specific to the goods imported by the Appellants whereas the description in Appendix 5 (SI. No. 518) is hi generic terms. Therefore, we hold that the Customs were correct in holding that the licence did not cover the goods imported. We further note that the 10% of the value was still allowed for the goods (as laid down in para 33 of the Policy Book) and that the Collector has taken a lenient view as recorded in the order.”
We see no reason to depart from the conclusion when deciding on the validity of the import licence to cover the goods imported in this case. We, therefore, hold that the findings of the Collector that the import licence did not cover the goods is correct. We uphold the same and reject the appeal hi this regard.
5. Insofar as valuation is concerned Shri Gujral submitted that as hi the earlier appeal there is no evidence recorded in the order just to justify the increase in the assessable value of the goods as ordered by the Collector. He pleaded that a perusal of the Collector’s finding would show that the under-valuation of the goods has not been proved. In the circumstances the learned Advocate submitted that the penalty should be reduced and fine set aside.
6. Shri A.S.R. Nair, the learned SDR argued that the Collector’s order contained enough evidence to justify the enhancement of the asessable value. He submitted that there was no proof advanced by the appellants to show that the goods imported by them were manufactured out of inferior material. He submitted that there was no justification for redemption of the fine and penalty. Referring to the earlier order of the Tribunal the learned DR also submitted that in the earlier appeal Section 111(m) of the Customs Act was not involved but is involved in the present appeal. The learned DR in a very fair manner made a voluntary statement that according to his records the margin of profit on the goods at the relevant time was 50%. This was with reference to the imposition of a redemption fine which was over 100% of the value of the goods.
7. We have considered the arguments of both sides, with reference to valuation. As stated by Shri Gujral, the learned Advocate for the appellants waived not only show cause notice but also personal hearing. Therefore, it was necessary for the Collector, acting as an Adjudicating Authority, to record, in the interests of justice, the full reasons for passing an adverse order. The appellants claimed that the imported goods were manufactured out of Polystrene Moulding Powder and not the SAN Moulding Powder which was costlier. This plea was rejected on the ground that they did not produce any evidence in support of the argument. In our view this was not just and fair. The Collector could have either asked the appellants to furnish proof of their claim or got the goods examined. The reference to Marda Agents incorporated in the Collector’s order is too vague to justify any conclusion about under invoicing. In these circumstances we hold that the Department did not prove under-valuation. We, therefore, allow the appeal insofar as valuation of the goods is concerned.
8. The Collector imposed a fine of Rs. 1,00,0007- (one lakh) in lieu of confiscation. The value of the goods was a little less than 74,000/- rupees. The margin of profit at the relevant time was stated to be 50%. It is also submitted that subsequent to the importation of these goods similar goods were placed under OGL as a result of which the margin declined further. Also, we have set aside the findings of the Collector regarding…the confiscation was ordered both under 111(1) and 111(m) of the Customs Act.
In the circumstances the fine deserves to be reduced as also the penalty. After careful consideration we order that the fine be reduced from Rs. 1,00,000/- (one lakh) to Rs. 25,000/- (Twenty-five thousand) and the penalty from Rs. 10,000/- (Ten thousand) to Rs. 5,000/- (Five thousand) only.
9. The appeal is thus partly allowed.