Judgment:
1. Anti-dumping duty of Rs. 38,11,012/- (increased by corrigendum dated 23-8-2002 from Rs. 24,48,851.45 raised in the show cause notice) has been levied under the impugned order, under the provisions of Section 9A of the Customs Tariff Act, 1975 together with interest under Section 28AB of the Customs Act, 1962 upon M/s. Hazel Mercantile Ltd. (hereinafter referred to as the importers) on the ground that the Citric Acid imported by them was of Chinese origin and hence liable to levy of anti-dumping duty in terms of Notification No. 78/2000-Cus., dated 26-5-2000, which imposes on Citric Acid originating in, or exported from, the People's Republic of China and imported into India, an anti-dumping duty at the rate equivalent to the difference between US $ 1677.06 and the landed value of imports per metric tonne, where the landed value is less than the above amount calculated in US Dollar, and there is no dispute that the landed value of the imports in question is less than the above amount calculated in US Dollars, the imported goods have been held liable to confiscation under Section 111(m) of the Customs Act, and due to non-availability for confiscation, redemption fine of Rs. 42 lakhs has been imposed and penalties of Rs. 12 lakhs and Rs. 6 lakhs imposed upon the importers and the Director of the importing company respectively, under Section 112(a) of the Customs Act. Hence these appeals.
2. We have heard both sides. The importers had declared the country of origin of 107.50 MT of Citric Acid imported by them to be Indonesia. It was noticed by the Customs authorities that woven polysacks in which the imported goods were packed inside polylined paper bags put into brown paper bags contained stencil mark "Citric Acid" only, but manufacturer's name, address, batch no. weight was not found mentioned on the bags. A catalogue of the Indonesia manufacturers from whom the goods were claimed to have been supplied was recovered from the office premises of the importers in which a picture of the bags of citric acid was printed and the said bags showed the following marking : 3. The explanation of the Director of the importers as to why the above markings which are normally to be found on bags of Citric Acid were not appearing on the subject bags was that, as per the information received from his supplier, the goods had been bought as a stock lot which was de-lumped by the supplier in Singapore after receipt from the manufacturer and also repacked. He was called upon to produce the manufacturer's invoice which he was unable to do, on the ground that the supplier M/s. Donald Mcarthy Trading PTE Ltd., Singapore had refused to part with the same as it was a trade secret. The Commissioner rejected the plea that the goods are 'stock lot' because they were not described as such either in the invoice or in the letter of credit and he has also rejected the plea that the goods were de-lumped on the ground that it was an afterthought. However, the rejection of the plea regarding stock lot, and de-lumped and the fact that the bags in which the goods were packed did not bear details normally found on Citric Acid supplied from M/s. Sungai Budi Group, Indonesia can only point to the goods not being of Indonesia origin.
But that is not the issue for determination. What is relevant is only to decide whether the goods are of Chinese origin. The fact that the goods were packed in bags without any details thereon which was contrary to the normal packing of goods from the particular Indonesia manufacturer is not sufficient to arrive at the conclusion that the goods are of Chinese origin, particularly when Citric Acid is imported into India from other countries also. The further fact that the supplier in Singapore is a company where Vinod Kumar Didwania and Nidhi Didwani, uncle and aunt of the Director of the importing company held 99.9% shares and might have resorted to misdeclaration of the country of origin in order to help their nephew to evade payment of anti-dumping duty is also not material for decision on the issue (we also note that there is no such charge in the show cause notice issued to the appellants). The stand of the Revenue that since the transaction value is below the normal value of US $ 1677.06 under the anti-dumping duty Notification, the goods have been proved to be of Chinese Origin, is not tenable for the reason that the normal price prescribed in the Notification is relatable to the country of origin viz. China and is not independent thereof. No enquiry has been conducted as to whether the transaction value is lower than the value of contemporaneous imports of Citric Acid from Indonesia.
4. In the light of the above discussion, we hold that the department has not discharged the burden of proving that the goods are of Chinese origin so as to attract levy of anti-dumping duty under Notification No. 78/2000, dated 26-5-2000, set aside the impugned order and allow the appeals.