2004 (97) ECC 463 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Sahara Enterprises

Versus

Commissioner of Customs, Chennai

Appeals No. C/459-461/1998

[Arising out of Order-in-Original No. 243/97-CAU, dated 9.12.1997 passed by Commissioner of Customs & Central Excise, Chennai]

Final Order No. 555 to 557/2004, dt. 5.7.2004, Certified on 19.7.2004

Valuation and Penalty

Ld. Commissioner has squarely relied on Order No. 10/95 passed earlier by him -- There appears to be nothing on record to indicate that the assessee was given any hint of the Commissioner's intention to determine the assessable value of the goods on the basis of his earlier order. Hence, the value determination by the Commissioner cannot be sustained. As per Show Cause Notice, it was not on any charge of under-invoicing of goods but on the ground of misdeclaration that the department proposed to penalise the assessee. The penalty imposed on them is on a ground which is beyond the scope of the show-cause notice. There fore the penalty also is not sustainable -- The impugned order is set aside and these appeals are allowed with consequential reliefs.

Appeals are allowed

PRESENT :

Shri R. Raghavan, Adv. for the appellant.

Shri A. Jayachandran, JDR for the respondent.

Per : P.G. Chacko

These appeals of the assessee are against an order of adjudication passed by the Commissioner of Customs in respect of a show-cause notice dated 8.3.1996 issued in respect of 3 Bills of Entry covering the period July-Aug.'94. The Bills of Entry had been filed under the DEEC Scheme for duty-free clearance of goods declared as "Reinforcement Tapes". The department booked a case of misdeclaration against the importers (appellants). The above show-cause notice proposed (i) to confiscate the goods under Section 111(m) of the Customs Act on the ground of misdeclaration (ii) to impose a penalty on the noticee under Section 112(a) of the Act (iii) to enhance the value of the goods and recover duty accordingly and (iv) to appropriate the amount of Rs. 5 lakhs already paid by them, towards the demand of duty. These proposals were resisted. In adjudication of notice, Ld. Commissioner of Customs valued the goods at US$ 3 per Roll in terms of an earlier order, which he had passed in respect of similarly declared goods imported by the same party and sought to be cleared under a Bill of Entry dated 23.1.1995. The Commissioner also found under-invoicing of goods against the appellants and, on that basis, imposed a penalty of Rs. 50,000 on them. Hence the present appeal.

2. We have examined the records and heard both sides. It is submitted by Ld. Counsel for the appellants that the valuation made on the basis of another order which had not been cited as a basis in the show-cause notice is not sustainable. Insofar as penalty is concerned, Ld. Counsel submits that it has been imposed on the basis of a finding of under-invoicing of goods, whereas, in the show-cause notice, the proposal to penalise the appellants was based on an allegation of misdeclaration of the imported goods. In the impugned order, the allegation of misdeclaration of the goods has been dropped. Hence, there is no surviving ground for penalty. Ld. DR opposes these arguments on the strength of the findings in the Commissioner's order.

3. After examining the submissions, we find that the challenge in this appeal is directed against valuation and penalty. Insofar as valuation is concerned, we find, Ld. Commissioner has squarely relied on Order No. 10/95 passed earlier by him. The said order was not relied on in the relevant show-cause notice, nor did the Commissioner propose to rely on it in the course of adjudication. There appears to be nothing on record to indicate that the assessee was given any hint of the Commissioner's intention to determine the assessable value of the goods on the basis of his earlier order. Hence, we are unable to sustain the value determined by the Commissioner. The impugned order specifically notes that there is no misdeclaration of goods by the appellants. But there is a finding of under-invoicing of goods, against the appellants. On a perusal of the show-cause notice, we find that it was not on any charge of under-invoicing of goods but on the ground of misdeclaration that the department proposed to penalise the assessee. The penalty imposed on them is on a ground which is beyond the scope of the show-cause notice. Hence, we are unable to sustain the penalty either. The impugned order is set aside and these appeals are allowed with consequential reliefs.

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