Tribunal overturns Commissioner's order due to lack of proof and failure to consider contemporaneous imports.

The Tribunal allowed the appeal, finding that the Commissioner failed to prove under-valuation and did not consider contemporaneous imports. The Tribunal set aside the order, stating it was unsubstantiated and unreasonable.

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Issues Involved:
1. Allegation of Mis-declaration
2. Allegation of Under-valuation
3. Rejection of Transaction Value
4. Determination of Assessable Value
5. Confiscation and Penalty

Summary of Judgment:

Allegation of Mis-declaration:
The Commissioner concluded that there was no mis-declaration of goods by the appellants. The examination reports of the Bills of Entry did not support the allegation of mis-declaration, and the Bills of Lading recovered during the investigation were not directly relevant to the issue at hand.

Allegation of Under-valuation:
The Commissioner found that there was under-valuation by the appellants. This conclusion was based on an invoice dated 10.03.2003 from M/s. PGI Non-woven to M/s. ASC International and a Master Packing List with Bill of Lading No. 4050229-239224. The Commissioner noted that the value in the invoice was USD 0.22/KG, whereas the value declared by the appellants was only USD 0.1/KG. However, the Commissioner acknowledged that this invoice was raised in the course of domestic trade and was indicative of the FOB value.

Rejection of Transaction Value:
The Commissioner rejected the declared value of USD 0.18/KG CIF, Cochin, on the grounds that it did not reflect the transaction value. The Commissioner relied on freight charges obtained from various steamer lines to determine the assessable value, which was not proposed in the Show Cause Notice (SCN). The Commissioner did not provide a clear reason for rejecting the declared value, and there was no evidence of payment of extra freight by the appellants.

Determination of Assessable Value:
The Commissioner failed to follow the procedure laid down in Rules 4 to 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The appellants argued that even if the price indicated was the FOB value, the cost of transport could only be 20% of the FOB value, making the total assessable value USD 0.216 per KG. The Commissioner did not consider contemporaneous imports or provide evidence to substantiate the revised assessable value.

Confiscation and Penalty:
The Commissioner confiscated 58 Bills of Entry under Section 111(m) of the Customs Act and assessed differential duty of Rs. 24,62,021/- with an equal amount as penalty under Section 114A of the Customs Act. The Commissioner also imposed a fine of Rs. 4,25,000/- and a penalty of Rs. 1,70,000/- under Section 112 for six provisionally assessed Bills of Entry. The appellants argued that the order was not maintainable as the goods were released provisionally under Section 18 of the Customs Act.

Tribunal's Findings:
The Tribunal found that the Commissioner had not provided a reasoned finding for rejecting the declared value and had relied on data from steamer agents without evidence of actual payment of freight by the appellants. The Tribunal emphasized that the burden of proving under-valuation lies with the Revenue, and no evidence of contemporaneous imports at higher prices was provided. The Tribunal cited several Supreme Court cases, including Commissioner of Customs, Calcutta Vs South India Television (P) Ltd, Mirah Exports Pvt Ltd Vs Collector of Customs, and Commissioner of Customs, Vishakhapatnam Vs Aggarwal Industries Ltd, to support its findings.

Conclusion:
The Tribunal allowed the appeal, stating that the Commissioner had not discharged the onus of proving under-valuation and had not given due consideration to contemporaneous imports. The impugned order was found to be unsubstantiated and unreasonable, and the Tribunal set it aside.

(Order was pronounced and dictated in Open Court on 07/12/2018)

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