M/S. Ozurt Systems Pvt. Ltd vs Commissioner Of Customs

[Arising out of Order-in-Appeal No. 02/2006 (V) (D) CH and 16/2006 (V) CH dated 27/03/2006 passed by Commissioner of Central Excise and Customs (Appeals), Visakhapatnam.]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

M/s. Ozurt Systems Pvt. Ltd. 4C & 4D, Balaji Mangalgiri Chambers VIP Road, Siripuram, Visakhapatnam. Appellant(s)

Versus

Commissioner of Customs, Customs House, Port Area Visakhapatnam  530 035. Respondent(s)

Appearance:

Ms. Neetu James, Advocate V. LAKSHMIKUMARAN & V. SRIDHARAN WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS No.26/1, DR. RAJKUMAR ROAD, MALLESWARAM, BANGALORE - 560 055 KARNATAKA For the Appellant

Mr. N. Jagadish, Superintendent (AR) For the Respondent

Date of Hearing: 06/08/2015

Date of Decision: 21/10/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 22075 / 2015

Per : ARCHANA WADHWA

After hearing both the sides duly represented by Ms. Neetu James, Advocate and Mr. N. Jagadish, Superintendent (AR), we note that the appellant imported a consignment of plastic chairs and CD holders of Taiwan origin in 1156 cartons and filed bill of entry dated 23.3.2001 declaring the value of the goods as US $ 8658.80 (assessable value of Rs.4,14,331/-). The Bill of Entry filed by the appellant was supported by invoice dated 6.3.2001 issued M/s. UNI Pure Ltd., UNI Pure House, South Way, UK along with packing list, Bill of Lading, country of origin certificate and a sales contract for supply of the furniture by M/s. UNI Pure Ltd.

2. On a doubt that the value declared by the appellant was on the lower side, Revenue called for manufacturers invoice from the importers, who could not produce the same. The goods were assessed to duty provisionally by enhancing the value to Rs.5,44,258/- and were released against a PD Bond.

2.1 Thereafter the importers office premises were put to search on 16.5.2001 and certain documents were seized. A printout retrieved from a CD, recovered during the search was a message sent to one Shri Naresh by M/s. Wellrun Hardware Company, Taiwan, the manufacturer of the goods. As all other particulars mentioned in the said document tallied with the imported consignment except the value, Revenue entertained a view that the value as reflected in the said document was the correct value. The said document was shipping bill for export to M/s. UNI Pure Ltd. showing the export value declaration by M/s. Wellrun Hardware, manufacturer.

2.2 Shri Ramesh Kumar Mehta, Executive of the appellant-company in his statement recorded under Section 108 of the Customs Act, 1962 clarified that they had imported only one consignment of furniture from M/s. UNI Pure Ltd., UK and the goods in question were of Taiwan origin. Shri Rajiv Agarwal, Director of the appellant-company in his statement dated 6.6.2001 deposed that they have brought the consignment from an agent in London M/s. UNI Pure Ltd. and were unaware of the manufacture of the goods. He further deposed that they entered into a contract with M/s. UNI Pure Co. Ltd. and who agreed to supply the entire consignment at US $ 8658.50. They were not aware of the manufacturer being M/s. Wellrun Hardware Company Ltd., who according to the retrieved document had supplied the goods to M/s. UNI Pure Company Ltd. with a copy to them. He deposed that the imported consignment was supported by the documents showing that they have only paid an amount of US $ 8658.80 to the supplier. He could not disclose the reason as to why the value shown in the printout retrieved from the CD recovered from their office was on a higher side, though the other particulars matched. He further stated that he did not know what understanding or adjustment M/s. UNI Pure Ltd. had with M/s. Wellrun Hardware and why they have sold the goods at a lower rate.

2.3 Based upon the above investigations, they were issued a show-cause notice dated 25.10.2002 proposing to confirm the differential duty by adopting the higher value along with interest and imposition of penalty and confiscation of the goods. The notice culminated into an order passed by the original adjudicating authority and upheld by Commissioner (A). Hence the present appeal.

3. After hearing both the sides, it is seen that Revenue strongly relied upon a computer printout seized from the CD which related to the sale of goods by the manufacturer M/s. Wellrun Hardware Company Ltd. of Taiwan to M/s. UNI Pure Ltd. based at UK. The value mentioned in the shipping bill of M/s. Wellrun Hardware Company while exporting the goods to M/s.UNI Pure Ltd. by UK was shown as US $ 26068.80. From the above printout so recovered by the Revenue, they have concluded that the value of the goods is US $ 26068.80. Accordingly, the value stands enhanced and differential duty stands confirmed.

3.1 The issue is as to whether the Revenues reliance upon the printout retrieved from a CD recovered during search which relates to the export declaration made by the manufacturer while sending the goods to M/s. UNI Pure Ltd. UK, who is the supplier of the goods to the appellant, is a sufficient documentary evidence to enhance the value of the consignment. Admittedly the appellant has received the goods from M/s. UNI Pure Ltd. under a written sales contract. M/s. UNI Pure Ltd. have also raised an invoice reflecting the value of the goods as US $ 8658.80. No further enquiry stand made by the Revenue either from the manufacturer or from the supplier of the goods. As such the documents relating to the transactions between the manufacturer and the supplier of the goods have no relevance insofar as the appellant has imported the goods in question from the supplier. The Directors of the company in their statements recorded during the investigations have clearly deposed that they have paid their supplier an amount shown in the contract raised in the invoices and they are not aware of the manufacturers price as also of the fact as to why the supplier has sold them the consignment at a reduced value even if, as per the Revenue, he has received the same at a higher value. Even otherwise we note that the document retrieved from the CD, which stands messaged to one Shri Naresh is not the document which is authentic enough to be relied upon inasmuch as the same is neither signed nor certified by any person nor does it establish beyond doubt that the manufacturer has sold the goods at a higher value to the M/s. UNI Pure Ltd., UK. It is also not established by any evidence that the said document under which the manufacturer has sold the goods to supplier relates to the same very goods which the supplier has sent to the appellant-importer.

3.2 Apart from that, there is no evidence on record to reflect that the appellant has paid higher value to M/s. UNI Pure Ltd. UK from whom they have received the goods. Such type of quotations, unsigned and unauthentic documents have been held not to be sufficient to enhance the value. Reference can be made to Tribunals decision in the case of Truwood Pvt. Ltd. vs. Commissioner of Customs, Visakhapatnam: 2005 (186) E.L.T. 135 (Tri.-Del.) wherein it was held that enhancement of value sought on the basis of photocopies of export declaration obtained from the foreign customs, the original copies of which were not brought on record, cannot be held to be justified. It was further observed that such documents being unsigned, no presumption can be raised under Section 139 of the Customs Act, 1962 in respect of the same. Similarly in the case of Ramkrishna Sales Pvt. Ltd. vs. Commissioner of Customs, Ahmedabad: 2008 (230) E.L.T. 431 (Tri.-Ahmd.), enhancement of value on the basis of export declarations made by Hong Kong supplier being photocopies, were not considered as evidence sufficient to enhance the value by referring to the Honble Supreme Courts decision in the case of Collector vs. East Punjab Traders: 1997 (89) E.L.T. 11 (SC). The Tribunal observed that the value enhancement on the basis of computer printout cannot be held to be a valid enhancement, in the absence of evidence of contemporaneous imports.

3.3 When we apply the ration of the above decisions to the facts of the present case, we find that the only evidence relied upon by the Revenue is a document retrieved from the CD found in the appellants premises. That retrieved document is addressed to one Mr. Naresh who has not been examined at all. It is not proved on record that the supplier has procured the goods at that price shown in the said printout. In any case, it is only an export declaration made at Taiwan and cannot be adopted as a true value of the goods inasmuch as an exporter can enhance the value of the goods for the purpose of his own benefits which might have been available to them under the export laws of that country. There is no further evidence on record showing that the importer had paid extra amount to the supplier of the goods. The import is duly supported by a contract sale document, which has not been held to be bogus by the customs or does not stand rebutted by them by producing sufficient evidence. The Honble Supreme Court in the case of Mirah Exports Pvt. Ltd. vs. Collector of Customs: 1998 (98) E.L.T.

3 (S.C.) has observed that burden of proving undervaluation is on the Revenue and ordinarily the Court should proceed on the basis that the appellant tenor of the agreements reflect the real state of affairs and the Revenue has to succeed in showing that the agreement is not real and the price shown in the invoices does not reflect the true sale value. To the similar effect is another decision of the Honble Supreme Court in the case of Eicher Tractors Ltd. vs. Commissioner of Customs, Mumbai: 2000 (122) E.L.T. 321 (S.C.) laying down that transaction value has to be determined based upon the three conditions of time, place and absence of special circumstances. Transaction value is confined to the particular transaction and in the absence of any other evidence, same has to be adopted as the assessable value. The Revenue in the present case has not produced any contemporaneous evidence and the reliance by the Revenue to another import at Chennai Port cannot be held to be contemporaneous inasmuch as the goods are not of the same country of origin. The reference to the contemporaneous import is in respect of European origin goods whereas the goods in the present case are of Taiwan origin.

As such we find no reasons to doubt the transaction value declared by the appellant. The enhancement of the same based upon the some extraneous documents is neither justified nor warranted.

4. In view of the above, we set aside the impugned order and allow the appeal with consequential relief to the appellant.

(Order pronounced in open court on 21/10/2015.)

ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

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