Per Shri V.P. Gulati:

The issue in the appeal relates to the under-valuation of the goods which were sought to be exported by the appellants. The learned lower authority has held that the value as declared by the appellants was not acceptable and he has invoked provisions of Section 113 (d) read with Section 18 (1) (a) of FERA, 1973. The findings in the operative portion of the order, the following has been set out :

22. Further, export control order 1/88-ETC dated 30.3.1988 also specifically provides for action to be taken against goods which are not in conformity with the declaration made either in the description or value etc. (Para 13 of the Order refers). Therefore, goods which are sought to be exported and which falls under the Category or prohibited goods, automatically attracts the relevant provision of the Customs Act and therefore invoking the provisions of Section 113 (d) of the Customs Act is very much correct and valid.

23. Though the party had admitted that there has been under-invoicing, they have not come forward to clearly admit as to what exactly is the percentage of under-invoicing. However, when the two statements given by them are compared, it is noticed that the under-invoicing is of the order of 25% in respect of one model and about 40% in respect of the other model. Such being the variation in the percentage, it is not wise either to hazard a guess or venture to arrive at the correct price. Suffice to say that there has been admitted under-declaration of FOB value and this is clearly within the ambit of the Customs Department to check and take appropriate action as provided under the law.

24. Accordingly, it is held that the violation of the provisions of Section 18 of the Foreign Exchange Regulation Act, 1973 and Section 11 and Section 113 (d) of the Customs Act stand proved. The goods already stand released for export and therefore not available for confiscation. Therefore I impose a penalty of Rs. 3,00,000/- (Rupees Three Lakhs) on M/s. BPL Sanyo Technologies Ltd., Palghat under Section 114 (1) of the Customs Act, 1962.

2. The learned Advocate for the appellants, Shri Nambiar, has pleaded that the appellants have a collaboration agreement with M/s. Sanyo of Japan and were manufacturing radio cassette tape recorders in collaboration with the said firm. They had entered into negotiation for supply of over a Million sets and they were sending the sample consignments comprising of 2 models, 2400 Nos. of M2800-3H and 1500 Nos. of M-7010-2K, each lot valued at FOB US $ 29660 and US $ 24,000 respectively. He has pleaded, the authorities examined the appellant's local sale price and felt that the appellants had under-invoiced the goods and proceeded to issue the show cause notice and they invoked the provisions of law as set out above. He has pleaded that the price agreed to between M/s. Sanyo and them was in the course of international trade and they got what they could get in respect of the goods in question. He has pleaded that it was a negotiated price and there was no question of under-valuation. In any case, he pleaded, the local sale price could not have formed the basis for the charge of under-valuation. He has pleaded that the provisions of Section 14 of C.A., 1962 had not been taken into consideration while holding against the appellant. He has pleaded, the learned lower adjudicating authority has not come to any conclusion as to what would be the correct value of the goods. He has pleaded, in this background, the provisions of Section 113 (d) could not have been invoked, nor the appellants could have been penalised.

3. The learned JDR for the department has pleaded that the learned lower authority had a basis to frame the charge and the basis is very clear that the price at which the goods were sought to be exported was the sale price below the domestic price of the goods.

4. We have considered the pleas made by both the sides. We observe that the learned lower authority may have been right in enter