LexCOLLECTOR OF CUSTOMS versus M/S. TELEVISION AND COMPONENTS LTD. AND ORS.
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COLLECTOR OF CUSTOMS A M/S. TELEVISION AND COMPONENTS LTD. AND ORS. FEBRCARY 24, 2COO jS.P. BHARUCHA AND MRS. RU\fA PAL, n] B Customs Act 1962/Customs Valuation (Detennination of Price of Im-- ported Goods) Rules 19/il:f- Sections 14, 10/i and 111 /Rule 3-lmport of Tape Desk Mechanisms from two finm~uplicate invoices and orders bearing same number and date disclosing different values recovered during C raids-Giarge of under-invoicing and mis-declaration of value of goods and consequent evasion of customs duty- Transaction Value-imposition of dif- ferential customs duty-Held, valid. Import and Export (Control) Act, 1947- Section 3(2)-lmport Control Order, 1955---Clause 3-Tape Desk Mechanisms removed from OGL D lists-Licence required for impo~Amendment of Letters of Credit opened on misrepresentation to avail exemption--lmport of goods without requisite licence- -Violation of-Held, the adjudicating authority should decide the violation- Scope of adjudication spelt out. Penalty-- < 'omposite penalty levied by Collector for violation of Import Control Order and mis-declaration in value of goods- Held, quantum of penalty will have to be re--detem1i11ed by the Collector after detennining the issue on the licensing aspect by the adjudicating authority. E Respondent-company imported Tape Desk Mechanisms (TDMs) F from a foreign firm Y at S$ 250.00 per set. The import consignment was intercepted by Directorate of Revenue Intelligence (DRI) on receiving information of under-invoicing of the TD Ms and violation of provisions of Import Control Order, 1955 for investigation. High Court, on a Writ Petition filed by the respondent challenging the investigation, directed the DRI to complete the investigation within two months. The DRI conducted G raids at oflice and factory premises of the respondent and recovered several documents. Statemenh from Managing Director and other persons including the clearing agent were gathered under Section 108 of the Cus- toms Act, 1962. TDMs were seized by the DRI. The High Court, on a petition filed by the respondent challenging the seizure directed H 1139 1140 SUPREME COURT REPORTS [200011 S.C.R. A provisional release of TD Ms against security. B c The DRJ recovered in raids, identical orders bearing same numbers and dates, pertaining to the months of December 1988 and January 1989, placed by the respondent with another firm M as placed with firm Y for supply of TDMs at S$ 343.50 per set. In March 1989, by a public notice, TDMs were removed from Open General Licences (OGL) list thereby requiring licences for import und[r Import and Export Policy. However, the public notice allowed imports of TDMs without licence where ir- revocable letter of credit (LJCs) were opened before the date of the public notice provided shipments are made within a period of 90 days from the date of the public notice. To avail of the exemption, the Revenue found that the respondent obtained amendment of the UC by its banker, which was originally opened in favour of firm M in January 1989, in favour of firm Y on misrepresentation that firm Y was an agent of firm M. The Revenue found that firm Y is independent of firm M and the order placed with firm D Y in January 1989 is a fabricated one. The Revenue also found that the orders were placed with firm Y after March 1989 with a new UC, which required a licence for import, which the respondents did not have. The Revenue further found that the fall in declared value of TDMs from S$ 343.50 to S$ 250.00 did not reflect the real value of TD Ms. E Collector of Customs hsued a show-cause" notice alleging inter alia that the i·espondent is liable to pay the difference of duty in respect of the TDMs calculated at S$ 343.45 per set instead of S$ 250.00 and contraven- tion of Import Control Order. Collector, by an order, held that the respon- dent evaded customs duty of Rs. 32,03,594 and that the entire consignment F was liable to confiscation under the Act on the ground of evasion and illegal import of TD Ms without an import licence, which is in contraven- tion of the provisions of the Import and Export (Control) Act and Import Control Order, 1955. Since the goods had been released on the directions of the High Court, the Collector ordered the respondent-company to pay the evaded differential customs duty and a penalty of Rs. 40 Lakhs, being G redeemable value of the goods and a further penalty of Rs. 5 lakhs each
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