2023 (4) TMI 783 - AT - Customs

Invalidation of Anti-Dumping Duty on 'Measuring Tapes' due to Lack of Origin Proof

DR Soneta & Sons, Vishal K Agarwal, Sunil Dutt Prem Prakash Ahuja Versus Commissioner of Customs (General & CFS Mulund)

The Tribunal invalidated the imposition of anti-dumping duty (ADD) on 'measuring tapes' due to insufficient evidence proving their origin from China. ... Levy of Anti-Dumping duty - misdeclaration of origin as Malaysia with intent to evade the antidumping duty (ADD) - discarding of cross-examination in the adjudication order - HELD THAT:- The proceedings, culminating in recovery of differential duty and anti-dumping duty on ‘measuring tapes made of steel’ and ‘measuring tapes made of fiber glass’ from the principal noticee, has had a curious passage commencing, as it did, with alert issued by Directorate General of Valuation on the steep under-invoicing of such goods from several countries including Malaysia, on which, as yet, anti-dumping duty was not contemplated then before going on to render the finding that the impugned goods did not originate in Malaysia. In the context of the notification resorted to in the adjudication order, it has to be clearly established that the impugned goods were produced in China. That is the test which the impugned order must overcome to exclude setting aside of the anti-dumping duty devolving on the importer. That the import is covered by invoice of M/s Reva Technologies, Dubai indicating the goods to be of Malaysian origin, backed by certification to that effect issued by Dubai Chamber of Commerce, is on record. That the bill of lading covers the shipment of the impugned goods from Singapore is also on record - the ‘incriminating’ pamphlet was not in the intercepted consignment and that, containing, as it does, the name of an allegedly non-existent entity in Malaysia, its evidentiary value for purpose intended by the adjudicating authority is suspect. Local traders can hardly be accepted as authoritative sources for establishing origin and the transaction allegedly entered into between these traders and the importer may have relevance for proceedings under some other statute without any bearing on conformity with the conditions for imposition of the definitive anti-dumping duty. The market price in India shall not be the basis for determination of value under rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The redetermined value in the impugned order is, therefore, not consistent with law and must be set aside. The appropriateness of invoking rule 12 of the said Rules is, thus, relegated to an academic exercise - the impugned order has erred in concluding that the impugned goods should be subjected to levy of differential duty and anti-dumping duty and the extrapolation thereto onto the past consignments is no less untenable; consequently, the confiscation of the goods lacks statutory sanctity as also the penalties imposed on the importer and the other two appellants connected with the intercepted consignment. Appeal allowed. Issues Involved:1. Misdeclaration of origin to evade anti-dumping duty.2. Rejection of declared value and enhancement of assessable value.3. Legality of anti-dumping duty imposition.4. Confiscation of goods and imposition of penalties.Summary:1. Misdeclaration of Origin to Evade Anti-Dumping Duty:The customs authorities alleged that the appellants deliberately misdeclared the origin of imported 'measuring tapes' as Malaysia to evade anti-dumping duty (ADD) applicable to goods from China. The investigation revealed that the purported Malaysian manufacturer did not exist, and the certificate of origin issued by the Dubai Chamber of Commerce was based on self-declaration without verification. Despite these findings, the Tribunal held that there was no conclusive evidence to prove the goods originated from China, thereby invalidating the imposition of ADD.2. Rejection of Declared Value and Enhancement of Assessable Value:The declared values in the bills of entry were rejected under rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and the assessable values were enhanced based on market inquiry reports. The Tribunal found that the market prices in India should not have been the basis for determining the value under rule 9, rendering the redetermined values inconsistent with the law. Consequently, the enhancement of assessable values was set aside.3. Legality of Anti-Dumping Duty Imposition:The Tribunal emphasized that ADD imposition under section 9A of the Customs Tariff Act, 1975, is contingent upon the clear establishment of the goods' origin from the specified country. The evidence provided, including the certificate of origin and shipment documents, did not conclusively prove Chinese origin. Thus, the imposition of ADD on the imported goods was deemed unlawful.4. Confiscation of Goods and Imposition of Penalties:The confiscation of goods and penalties imposed under sections 111(d), 111(m), 114A, and 114AA of the Customs Act, 1962, were based on the same evidence used to reject the declared values and impose ADD. Since the Tribunal found these actions to be inconsistent with the law, the confiscation and penalties were also set aside.Conclusion:The impugned order was set aside, and the appeals were allowed, as the Tribunal found no valid grounds for the imposition of differential duty, ADD, confiscation of goods, or penalties based on the evidence presented.