[Order per : S.S. Sekhon, Member (T)]. - These two appeals are being disposed off by these common order since the issue involved is the same i.e. undervaluation of imports of ‘Digital Satellite Receiver (Set Top Box)’ covered by Bill of Entry No. 236990 dated 14-6-2005 & Bill of entry No. 235026 dated 31-5-2005.

1.2  The import in case of CDB 98/06 was from China/ Hong Kong of consignment of 7070 pcs. of such Boxes supplied by M/s. Chenzhou Gospell Digital Technology Co. Ltd., China and declared at price of USD 7.5 per piece (C&F) which in CD 99/06, the supplier was on M/s. Asian Tech, Kowloon, Hong Kong at 2928 pieces were imported at Declared price of US Dollar 8 per piece. No brand name was found on examination nor it bore any marks of Country of Origin or model nos. except in case of Bill of Entry No. 99106 where Model No. SB 320 was found.

1.3  Since no mention of Country of Origin was seen and it was held to be contrary to declaration of Country of Origin ‘China’ made on the Bill of Entry it appeared to the department as seen from identically worded para 3 to para 12 of the impugned order, except for the nature of the import & number the BE, (as extracted from CDM 98/06/ below) proceedings of undervaluation were launched & confiscation Paras 3 to 12 read as -

“(3) It, therefore, appeared that there was no mention of country of origin in respect of the said import consignment, which is contrary to the declaration made in the said bill of entry, which indicates the country of origin as China.

(4) In view of above, it appeared that it cannot be said that the imported goods found without any indication of the country of origin are related to the bill of entry and the invoice, which indicate the country of origin.

(5) Further, on a study of the value evidences available from Directorate of Valuation (DOV) data, it was found that there were instances of clearance of set top box (digital satellite receiver) at a much higher value than US dollar 7.5 per piece as declared by the importer in the present case. Such higher value evidences are detailed below :-

(6) The country of origin mentioned in the subject bill of entry is China. From the table above, it is seen that the date of filing of bill of entry number 614822 at ICD Ahmedabad is 20-5-05 which is closest to the date of importation made by the subject importer and the country of origin is China for both these imports. The value evidence of US Dollar 22.5 in respect of ICD Ahmedabad also gets support from the value evidence in respect of import made through Hyderabad vide bill of entry number 108672 dated 12-4-05. Further, of all the value evidences mentioned above, the value of U.S. Dollar 22.5 is the lowest one.

(7) In view of the availability of the higher value evidence and the facts that the subject imported goods did not bear any mark of country of origin which is contrary to the declaration made in the bill of entry that the country of origin of the goods is China, it appeared that the invoice value as declared by the importer is liable to be rejected and the transaction value is to be determined on the basis of available value evidences.

(8) Since the name of the foreign supplier in case of the subject importation differs from the name of the shipper in the case of import made through ICD Ahmedabad and the subject goods do not bear any mark of country of origin contrary to the declaration made in the bill of entry, it appeared that value of the goods so imported cannot be determined under Rule 5 & 6 of the Customs Valuation Rules 1988. Similarly, in the absence of information regarding commission usually paid or additions usually made for profit and general expenses in connection with sale in India and cost of value of materials and fabrications or other processing employed in producing the imported goods, it appeared that it is not possible to determine value of the subject goods under Rule 7 and 7A of the said Rules. The values therefore was proposed to be determined under Rule 8 of the Customs Valuation Rules, 1988 read with sub-section (1) of section 14 of the Customs Act, 1962 taking the value evidence of US dollar 22.5 per pieces as the correct value of the goods.

(9) Based on the proposed value of US Dollar 22.5 per piece C&F, the ascertained assessable value of the subject goods came to Rs. 71,00,080.58. The extent of undervaluation came to Rs. 47,33,387/- (Rupees forty seven lakhs thirty three thousand three hundred eighty seven only) and the differential duty i.e. the amount of duty attempted to be evaded came to Rs. 7,24,208/- (Rupees seven lakhs twenty four thousand two hundred eight only).

(10) It, therefore, appeared that the subject goods are liable to confiscation under section 111(m) of the Customs Act, 1962 because of gross misdeclaration of value thereof and the apparent discrepancy in the declaration of the country of origin.

(11) The importer M/s. Tech-tronix India, B-88 Jagatpuri, Delhi 110 051 appeared liable to penalty under section 112(a) of the Customs Act, 1962 because of their omission and/or commission which have rendered the goods liable to confiscation under section 11 1(m) of the Customs Act, 1962.

(12) A notice from DRI F. No. 17/kol/App/Misc. Enq/2005 Pt-IX was, therefore, issued to the importer on 23-9-05 asking them to show cause within 15 days from the date of receipt thereof as to why:-

(i)      The value declared in the bill of entry number 236990 dated 14-6-2005 should not be rejected in view of discussions made in the notice;

(ii)     The transaction value should not be determined under Rule 8 of the Customs Valuation Rules, 1988 taking US Dollar 22.5 per piece as the correct value of the goods;

(iii)    The assessable value should not be taken as Rs. 71,00,080.58 instead of Rs. 23,66,693.52 as declared and the duty should not be paid by them accordingly;

(iv)    The goods under the subject bill of entry should not be held liable to confiscation under section 111(m) of the Customs Act, 1962;

(v)     The importer should not be held liable to penalty under section 112 of the Customs Act, 1962.”

2.1  Commissioner, vide paras 15 to 19 (verbation same in both cases and extracted hereinbelow) found the undervaluation charge to be upheld, ordered the loading of value to USD 22.5 per pcs. & confiscation of the goods under Section 111(m) of the Customs Act 1962 & goods an option & redemption & imposed penalties under Section 112(a) on the importers. Hence these appeal. Paras 15 to 19 of the order as per CDM 98/06 read as :-

“(15) I have carefully gone through the records of the case and considered the submission made by, and on behalf of the importer, I find that this is a case of alleged undervaluation where DRI has proposed to re-determine the value on the basis of the lowest of the value evidence available in terms of Rule 8 of the Customs Valuation Rules, 1988 read with sub-section (1) of section 14 of the Customs Act, 1962.

(16) The importer has contested the proposal saving that the price declared by him is the correct transaction value and, therefore should be accepted for assessment. In support of his contention, the importer has stated that identical/similar goods were being cleared at the material time at a price of USD 8 to USD 9 per piece, which was the price at which the item in question was available in the international market. He has further submitted some documents in support of his claim.

(17) From the records I find that a price of US $ 7.5 per piece was declared by the importer for the subject goods in this case which by his own admission, was not the transaction value for the goods at the material time. 1 am, therefore, unable to accept the contention of the importer that the price declared by him for the subject goods is the true & correct reflection of the transaction value.

(18) I further find that the documents submitted by the importer in support of his claim that identical/similar goods were being cleared at more or less the same value at various ports at the material time are all photocopies, which are not authenticated and except one or two, relevance thereof are also impossible to understand because there is no indication of what the documents really are as these appear to be printouts of plain papers which contain some typed data without any authentication or any indication of the source. I, therefore, hold that these documents are inadmissible as evidence.

(19) On the other hand, I find that DRI’s proposal is very reasonable as it takes into consideration the lowest available evidence of value of similar goods for re-determination of the assessable value.”

3.1  After hearing both sides & considering the material is to be held -

(a)     Commissioner has confirmed the proposal, as made in the notices, issued, without application of vital facts & submissions made as regards the admissibility and applicability of the evidence as in the notice is a plea made. The use of computer printout of identical findings, support the plea being made to call for setting aside the orders impugned. There is no independent application of mind exhibited. The order also does not address all issues raised by the importers before the Commissioner Orders are violative of Principle of Natural Justice & are required to be set aside on that ground.

(b)     The appellants have requested the Commissioner to refer to certain Data on valuation, available at his Desk on the press of a button & apply the minimum values observed therein for imports of subject goods at Kolkata. The Commissioner rejects such photocopy of NDB Data, obtained by the importers, only on the grounds of the same being photocopies & not authenticated & appeared to be printout. What prevented the Commissioner from going through the NDB data available on the computer at his Desk is not forthcoming. The appellants have pleaded that the DRI officers, who have issued the notices, have picked & chosen valuation in a biased manner in the Chart prepared & relied by them and have ignored the NDB data available on customs House, computer to which and they had no official access to it. This plea of the importer is to be upheld. Issue of valuation under the Customs Act & the notice framed thereunder cannot be effected on basis of pre-determined pick & choose options, it has to be only prescribed by the rules, the valuation as arrived by the Commissioner here for cannot be upheld.

(c)     The notices issued raise the charge that the country of origin was not mentioned on the goods, under import & only on the BE it was declared as China. The goods have been exported by a supplier in China & shipped from port, in China & the certificate of Country of Origin were provided. There is no material on record as to how and what is the country of origin of the goods? As per the case of Revenue also how the comparable goods, as relied by the department are from the same in determinate Country of Origin as in this case, made by Revenue. The non mention of Country of Origin, on the goods, can therefore be no reason to call for and uphold the charge of incorrect or misdeclartaion of country of origin on the BE’s & then proceed to determine & confiscate under Section 111(m). In these case confiscation liability for non-declaration of Country of Origin on goods & China on the BE is not a misdeclaration & the liability of confiscation under Section 111(m) therefore, on this ground is not upheld.

(d)    Appellants have submitted a chart showing printouts of similar goods under import at Kolkata port around the same time the subject goods were imported at above the same price. This Chart was before the Commissioner, who for reasons of his own failed to get the data verified from the Computer on his Desk. This would only lead to an inference that relevant data & submission of the Defence was not entertained. This unrebutted data has to be therefore accepted.

(e)     A perused of the data relied upon, by the department reveals that the same does not indicate the level of the imports in quantity terms & the comparable description of the goods compared as imported at Ahmedabad, whose price is being adopted, describe those goods as ‘INTEGRATED RECEIVER DECODER (SET TOP BOX), while goods under import are “DIGITAL SATELITE RECEIVER(SET TOP BOX).” No material is available on record or shown to us to prove that “Integrated Receiver Decoder” & “Digital Satellite Receiver” are same goods. Evidently one is a Receiver Decoder while the other only “Satellite Receiver’’ Electronic goods, differ in value, cum drably by a slight change of capacity, capability & function. Until it is shown & proved to be same goods by comparison of function/capacity, adoptions of values cannot be upheld, more so, as arrived by the Commissioner in this case. The valuation as per the invoice in these cases cannot be rejected. Once value of Transaction is to be upheld, then charge of misdeclaration of value to call for confiscation under Section 111(m) cannot be upheld, same is to be set aside.

(f)      Once no undervaluation charges are being upheld & Transaction Value is to be directed to be acceptable, there can be no short payment of duty & duty demands as ordered. The same are to be set aside.

(g)     Once confiscation under section 111(m) is not upheld, there can be no redemption fine & or penalty called for under section 112(a) of the Customs Act 1962. The same is to be set aside.

3.2 In view of the findings the orders impugned are set aside.

3.3 Consequently the appeals are allowed.

(Pronounced in Court on 4-7-2006)