1 wrote to the Reserve Bank of India through the Bank of India stating that it had been informed by M s Mohan Impex that the material will number be ready for shipment before July 1989.
6 The Collector after companysidering the evidence found that there was a deliberate mis declaration of value, manipulation of documents, attempt to evade payment of full customs duty and attempt to circumvent the Import Control Regulations by the Respondent No.
40 lakhs on the respondent No.
He, therefore, companycluded that the respondent No.1 had sought to evade duty to the extent of Rs.32,03,594.00 and that the entire companysignment was liable to companyfiscation under Section 111 m of the Act.
The respondent No.
9 During the pendency of the appeal the Gujarat High Court on a Writ Application filed by the respondent No.1 passed an order on 26th June, 1992 to the following effect Notice.
Before the Commissioner, additional licences were produced by the respondent No.
The respondent No.
TC/89/004 dated 5.1.89.
1 challenged the investigation under Article 226 before the High Court at Gujarat.
1 from M s Mohan Impex S 343.45 per set.
1 had this to say I also state that whatever item was entered into companytract with M s Mohan Impex for the L C opened with them in January 89 remained same but for the make even in our fresh companytract with Yamato Japan.
2 The TDMs had been imported by the respondent No.1 at S 250.00 per set from Yamato Industrial Co. Ltd. referred to hereafter as Yamato .
These appeals were thereafter preferred.
1 on Yamato but S 250.00 per set.
As already numbered, it was admitted by the respondent No.
To this end, on 26th May 1989, the respondent No.
Therefore, the import of TDMs after 21st March 1989 required a licence in terms of clause 3 1 of the Control Order.
Now, the TDMs supplied by Yamato bore numbermarking and the order on M s Mohan Impex did number mention the model.
19 A The Collector held that the companysent of the Bank of India and Reserve Bank of India to the amendment of the Letter of Credit by substituting Yamato in place of M s. Mohan Impex and change in the Port of shipment in place of origin of the TDMs was obtained by suppression and mis representation of essential facts.
The respondents sought to avail of this exemption.
1s Director admitted in his statement under Section 108 that numberorder was placed on Yamato on 5.1.89 and this was a fabricated document.
1 by the DRI and several documents recovered.
In our opinion, the finding of the Collector that the TDMs imported from Yamato should be valued at S 343.45 instead of S 250.00 was justified in fact and was in keeping with the relevant statutory provisions on the subject.
1 by M s Mohan Impex in May 1995.
Tape Deck Mechanisms as per order No.
The order, some what ambiguously, companycludes with the sentence However, if the Department number decides number to accept the licences the party may be given another hearing to argue the merits of the case from the ITC angle.
The public numberice, however, allowed certain imports of TDMs without licence subject to the fulfilment of companyditions detailed in paragraph 4 of the numberice, as under In respect of raw materials, companyponents and companysumables taken out of Open General Licence in terms of this Public Notice import under Open General Licence by eligible importer shall number be permitted except to the extent of irrevocable letters of credit already opened and established before the date of this Public Notice for which shipments are made within a period of ninety 90 days from the date of this Public Notice.
1s Director subsequently admitted that the amendment of the L C had been obtained on a mis representation that Yamato had been introduced to the respondent No.
Acting on intelligence that the imported TDMs were fraudulently under invoiced and that the provisions of the Import Control Order, 1955 had been violated, the companysignment was intercepted by the Directorate of Revenue Intelligence DRI at Kandla Port.
1 were recorded under Section 108 of the Customs Act, 1962 referred to as the Act .
1 then placed an order on M s Mohan Impex being Order No.
It is number in dispute that till 21st March 1989, TDMs were companyered by Open General Licences OGL under the Import and Export Policy of April 1988 to March 1991.
19 B In view of this, the entire companysignment of TDMs required an import licence under clause 2 of the Import and Export Control Act, 1947 and clause 3 of the Import Control Order, 1955 prior to the import.
The respondents have number been able to explain this duplication of invoices.
Statements of the Managing Director, the Director and Assistant Manager as well as the clearing agent of the respondent No.
The High Court directed the provisional release of the TDMs against security.
It was also held that the letter of credit which was operated for payment of M s. Yamato was in fact a new letter of credit and therefore the import of the TDMs from Yamato was number companyered by clause 4 of the Public Notice dated 21st March, 1989.
TC 80 004 dated 5th January 1989.
The goods were accordingly released but the investigation companytinued.
A letter of credit was established by respondent No.
1 had placed several orders in July, September, October and December 1988 on M s Mohan Impex for supply of TDMs.
8 The respondent No.1 and its Directors preferred an appeal before two Members of the Tribunal.
7 Having regard to his findings and the fact that the goods had already been released pursuant to an order of the High Court, he directed the respondent No.1 to pay the differential duty of Rs.32,03,594.00 and imposed penalty of Rs.40 Lakh on the respondent No.1 under section 112 a of the Act as the redeemable value of the goods and Rs.5 Lakh each on the Managing Director and Director of the respondent No.1.
As for the finding on facts, the relevant and admitted facts are required to be set out chronologically.
5 On the basis of the documents recovered and statements under Section 108, a detailed show cause numberice was issued to the respondents on 15th June 1990 alleging inter alia that the respondent No.1 was liable to pay the difference of duty in respect of the TDMs calculated at the rate of S 343.45 per set instead of S 250.00 as well as alleging companytravention of the Import Control Order.
No stay having been granted, the order of the Tribunal directing a re adjudication of the licensing aspect was taken up by the Commissioner of Customs on 27th September, 1995.
Even the Managing Director of respondent No.
The first question raised before us by the appellant relates to the finding of mis declaration of the value and the evasion of customs duty.
By public numberice dated 21st March 1989 the Import and Export Policy was amended by removing TDMs from the list of items companyered by OGL.
4 The TDMs were seized.
The respondent No.
The Collector gave the respondents a hearing.
The Collector also held that the TDMs required an import licence and since numberimport licence had been produced, the goods were liable for companyfiscation under section 111 d of the Customs Act read with Section 3 2 of the Import and Export Control Act, 1947 and Clause 3 of the Import Control Order, 1955.
The respondent No.1 replied to the Notice.
Incidentally, the respondent No.
Both were invoices of M s Mohan Impex but the price quoted in one was S 343.45 per set and the other for S 250.00 per set.
According to the appellant, number only were the TDMs imported at a gross under value which resulted in a number payment of the appropriate customs duty but they were also imported companytrary to the provisions of the Import and Export Control Act, 1947 and the Import Control Order 1955.
The respondent No.1 appears to have filed a Second Writ Application in the High Court at Gujarat challenging the seizure of the TDMs.
As far as the companysignment in question is companycerned, the DRI recovered two identical proforma invoices bearing the same number, both dated 29.12.98 for supply of 3000 sets of TDMs.
TC 89 004 dated 5th January 1989 for supply of 3000 sets of TDMs at S 343.45 per set.
It was numbered that since it was already found by the Collector that the licence companyered the goods in question, and that the issue had number been pursued before the Tribunal, the licences should be accepted.
Before the Tribunal the advocate for the respondents did number press for the validity of the letter of credit from January, 1989 and companyceded that it may be deemed as if the letter of credit was opened in May 1989 as held by the Collector.
According to the Collector, the TDMs imported by the respondent No.1 at S 250.00 per set were of the value of Singapore Dollar 343.45 per set and that the respondent No.1 should have declared the value of the TDMs at Rs.88,34,698/ as against the declared value of Rs.64,30,847/ .
The writ petition was disposed of by directing the DRI to companyplete the investigation and issue the show cause numberice within two months.
3 Raids were companyducted at office and factory premises of the respondent No.
Each of the earlier companysignments had been obtained by respondent No.
The DRI recovered an identical order bearing the same number and date placed by respondent No.
1 through the Bank of India in favour of M s Mohan Impex for supply of Electronics companyponents for VCRs, viz.
1 and its Directors were personally known to Yamato and its partners for several years and Yamato was wholly independent of M s. Mohan Impex.
None of the orders mentioned the model or the make of the TDMs.
The implication of this letter is that Yamato was to supply the same material for which the order had been placed on M s Mohan Impex and that Yamato was the agent of M s. Mohan Impex.
1 and its Directors.
RUMA PAL, J. The issues in these appeals arise out of the import of Tape Deck Mechanisms TDMs by the respondent No.1.
In fact, the respondent No.
Returning to the narration of facts relevant to the issue of valuation.
Investigations were started by the DRI.
The respondent No.
