1. Brief facts of the case are that the Appellant M/s. Sahara One Media & Entertainment Ltd. had imported 19 Beta Tapes of Programme namely "Bajo Las Riendas Del Amor" and "Yo Amo A Juan Querendon" from M/s. Televisa, Mexico vide aieway Bill No. 7064757092 dated 29.12.2007 through DHL express who is authorized courier for the Appellant. The courier filed CBE form, IGM No. A03805 Courier Bill of Entry No. 40740 dt. 29.12.2007 by declaring the value of US$ 190 (AV Rs. 7572/-).
2. The Appellant M/s. Sahara One Media & Entertainment Ltd. had imported another consignment of 16 Beta Tapes of Programme namely "Lalola" from M/s. Dori Media Group Ltd., Tel Aviv, Israel vide aieway Bill No. 4689556244 dated 27.12.2007 through DHL express who is authorized courier for the Appellant. The courier filed CBE form, IGM No. 18035, Courier Bill of Entry No. 40898 dt. 30.12.2007 by declaring the value of US$ 80 (AV Rs. 3188/-).
3. The CHA M/s. Mukadam Freight Systems Pvt. Ltd. filed regular Bills of Entry for the clearance of said two consignments on behalf of importer. The importer was asked to produce copy of contract regarding licence fee remitted if any for the said import, on which importer in case of CBE No. 40740 produced copy of licence agreement dt. 01.09.2007 with M/s. Televisa, SA, DE and as per which the importer was required to pay licence fee of US$ 18501 being net hourly licence fee. The total licence fee to be paid under the agreement was US $ 1350500/-. The licence fee being paid for the 19 programmes being imported in said BE was US$ 35,150. Taking actual freight of Rs. 8740/-, and insurance of Rs. 15758/- @ 1.125% and exchange rate of US $ 1 = Rs. 39.85 the assessable value came to Rs. 14,39,478/-.
4. In case of BE No. 40898 dt. 30.12.2007 produced copy of licence agreement dt. 01.09.2007 with M/s. Dori Media International GmbH. As per the said agreement the importer was required to pay licence fee of US$ 1000 per episode for 116 episodes. The total licence fee to be paid under the agreement was US $ 1,16,000. The licence fee being paid for the 16 episodes being imported in said BE was US$ 16000. Taking actual freight of Rs. 8056/-, and insurance of Rs. 7241/- @ 1.125% and the assessable value came to Rs. 6,62,646/-.
5. They were issued show cause notice that the licence fee is liable to be included in the assessable value under Rule 10 (c) of Customs Valuation (Determination of value of imported goods), Rules 2007. The importer in the case of AWB No. 7064757092 dt. 29.12.2007 has declared value of Rs. 7572/- as against the Assessable Value of Rs. 14,39,478/-. In the case of AWB No. 4689556244 dt. 27.12.2007 importer has declared value of Rs. 3188/- as against the Assessable Value of Rs. 6,62,646/- The Courier had signed declaration as to the correctness of declared value, and they have been authorised by the importer to clear the same. The said fact of mis-declaration could be known during examination of contract copy and the importer have mis-declared the value to evade the customs duty. For the said act of mis-declaration of value, the goods are liable to confiscation under Section 111 (m) and the importer is liable for penalty under section 112 (a) of the Customs Act, 1962. The show cause notice proposed to enhance the declared value in terms of Rule 10(1)(c) of Customs Valuation (Determination of Imported Goods) Rules, 2007. It was also proposed to confiscate the goods under section 111 (m) and to impose Penalty under section 112 (a) of the Customs Act, 1962. Penalty was also proposed to be imposed upon M/s. DHL Express (India) Pvt. Ltd. under Section 112(a) of the Customs Act, 1962.
6. The Appellant filed reply to Show Cause Notice contending that the supplier of Programme were not aware of the intricacies of determination of value of such programmes in India. They have in their invoice only declared the cost of CD without disclosing the facts of payment of licence fee. The Courier M/s. DHL accordingly declared the said value in Bill of Entry as he was not aware of the licence amount and agreement of providing licence to the Appellant. That error had happened due to miscommunication between the exporter, courier and the Appellant and there was no intention to evade duty. They themselves instructed the courier to file regular Bill of Entry after including the licence fee. The Adjudicating Authority held that the licence Fees/Royalty were includable in assessable value in terms of provision of Rule 10(1)(c) of Customs Valuation Rules, 2007. The importer has to make declaration as to the truth of the contents of Bill of Entry and in support of such declaration to produce, to the proper officer, the invoice if any relating to the imported goods. The value of the goods were mis-declared to evade duty what so ever the reason for non-declaration may be on the part of the importer. It may be deliberately or on the belief that the same need not to be done. It was held that the breach of the provision would attract penalty even if there is guilty intention or not. The Adjudicating Authority thus rejected the declared value and enhanced the same. He also ordered confiscation of goods under section 111 (m) with an option to redeem the same on payment of redemption fine of Rs. 2,00,000/-. He also imposed penalty of Rs. 50,000/- upon the Appellant M/s. Sahara One Media and Rs. 2,00,000/- on M/s. DHL Express under Section 112 (a) of the Customs Act. Therefore the Appellants filed the present appeals.
7. Shri Mehul Jivani, Ld. Chartered Accountant appearing for the appellants submits that as apparent in reply to Show Cause Notice they had directed the M/s. DHL to file regular Bill of Entry. They had no intention to evade duty. He submits that the duty enhancement due to change in assessable value is not exorbitant. He relies upon the judgment of Tribunal in the case of DHL Worldwide Express : 2005 (183) ELT 293) (Tri.-Del.), Bosch Chassis Esystems India Ltd : 2015 (325) E.L.T. 372) (Tri.- Del), Rational Art & Press Pvt. Ltd. (2007 (215) E.L.T. 522) (Tri.-Mum), K.H. Arind (2006 (205) E.L.T. 674) (Tri.-Chennai), Photophone Ltd: 1994 (73) E.L.T. 157) (Tri) to submit that since the imported goods are for their own use the Redemption Fine and penalty be reduced.
8. Shri Manoj Chavan, Superintendent (A.R.) appearing for the revenue supports the impugned order and submits that since mis-declaration of value has been made therefore the impugned order has been rightly passed.
9. Heard both the sides and perused the records of case. We find that the Adjudicating Authority has imposed Redemption Fine and Penalty holding that even if the mis - declaration is unintentional than too the confiscation of goods, duty and Penalty would be imposable. The Appellant has contended that they had given clear instruction to the M/s. DHL that they had no intention to mis-declare the value. We are of the view that it was the responsibility of the Appellant importer to inform the exporter and the courier to mention correct details in the documents. Further the Bill of Entry could not have been filed without intimating the Appellant. The charges of
Please Login To View The Full Judgment!
mis-declaration are thus sustainable as the Appellant did not adduce any evidence that they had instructed/informed courier of licence fee amount to be included in assessable value. We thus hold that the goods has been rightly confiscated. As regard the appeal of M/s. DHL Express, we find that the enhancement of value is due to suppression of the fact related to the contract of licence. Since this fact was not known to the courier M/s. DHL, he cannot be implicated for misdeclaration of value due to non inclusion of licence fees. Therefore, in our view, the courier company M/s. DHL is not liable for penalty, hence the penalty imposed on them under Section 112(a) is set aside. The appeal of M/s. Sahara One Media & Entertainment Ltd. is dismissed and appeal filed by M/s. DHL Express is allowed.