TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 32
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.... on an intelligence pertaining to undervaluation as well as mis-classification, an import consignment of "Whey Protein" (a food supplement) of USA origin, covered under Bill of Entry No. 8112 59 dated 12-12-2007 was examined on 18-12-2007 by the Dock AO/Examiner, under the supervision of CIU staff and in presence of CHA's representative Shri S.G. Sawant. The said consignment was imported by M/s. Ganapati S.R.J Associates, New Delhi and Bill of Entry was filed through CHA M/s. Thakkar Shipping Agency Pvt. Ltd., Mumbai. The Goods examined were found as per description in the packing list, invoice and Bill of Entry. The said goods were found to be finished/Market ready products but the Maximum Retail Price (MRP) was not found affixed on the packets/cartons. After examination, samples were drawn in duplicate to ascertain the composition of ingredients, and the container was sealed with Customs Bottle Seal No. 701632. 1.2 Market enquiry was also conducted by the staff of CIU, Custom House along with Shri Deepak Thakkar, Proprietor of M/s. Thakkar Shipping Agency Pvt. Ltd., who was authorized by the importers M/s. Ganapati SRJ Associates, New Delhi. It was found that the market pri....
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....dled its affairs. He had obtained IEC from DGFT, New Delhi in the above name and subject consignment of 'whey protein' was his first import. Before this consignment one consignment of 'Zipper head' was imported for which he was paid Rs. 5000/- for subletting his IEC code. No other item was imported under the said IEC which he had sublet for money. He also stated that the subject consignment of protein was to be sold by Shri Jaidev Kukreja in Mumbai. In his further statement dated 18-1-2008 he stated that he had appointed Shri Deepak Thakkar (CHA) to accompany the Customs staff for market enquiry of the subject goods; that he had seen the chart prepared from market enquiry and the same was acceptable to him. He also stated that in the eventuality of imposition of additional duty etc., Shri Jaidev Kukreja would arrange. 1.8 Shri Jaidev Kukreja in his statement dated 14-1-2008 stated that he was the marketing agent for the Importer and his job included booking orders from various shops, gyms and clients in Mumbai; that he had done market enquiry in Mumbai and the prices shown in the chart of market enquiry done along with Shri Deepak Thakkar, are fair indicative value of the pro....
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....ted under Rule 12(2)(iii)(b) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and value be determined in terms of Rule 7 of the Customs (Valuation) Rules, 2007. (2) The differential customs duties short paid, totally amounting to Rs. 13,04,165/- (Rupees Thirteen Lakhs Four Thousand One Hundred Sixty Five only) as worked out in Annexure II to the show cause notice, short paid due to mis-declaration of the transaction value should not be demanded and recovered under the proviso to sub-section (1) of Section 28 of the Customs Act, 1962. (3) The imported goods whose value is redetermined at Rs. 22,27,399/- (assessable value) under Rule 7 on the basis of market enquiry as worked out, for determination of the assessable value from retail selling price or MRP in the Annexure II of the show cause notice, imported under the said Bill of Entry should not be confiscated under Section 111(m) of the Customs Act, 1962, on account of undervaluation and mis-declaration of the impugned goods. (4) Interest on duty so short paid should not be demanded and recovered from them under Section 28AA on....
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....A of the Act on the applicant. The applicant also relied upon on the order No. 71/Final Order/Cus/GRG/2010, dated 29-9-2010 passed by the Hon'ble Settlement Commission in the case of Maytas Infra Pvt. Ltd. in this regard [2011 (270) E.L.T. 459 (Sett. Comm.)]. 2.6 The applicant has further submitted that he has deposited the entire amount prior to issue of demand and prays that the case may be admitted and settled as a whole once and for all, grant of immunity from imposition of any fine, penalty & prosecution under Customs Act, 1962. DISCLOSURE OF THE CO-APPLICANT 3.1 The co-applicant in his application submitted that the main applicant has accepted duty liability as demanded in the show cause notice and had deposited substantial amount of duty during the investigation and the balance amount of duty and interest has been deposited after issue of show cause notice. He also submitted that he has promptly complied with and extended full co-operation to the investigation authority. 3.2 The co-applicant further submitted that in true spirit of settlement, he seeks to settle the entire case. If the said case against the main applicant is settled, it is requested that t....
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....SIONER'S REPORT 5.1 Jurisdictional Commissioner of Customs, vide letter dated 27-4-2012 submitted that the adjudication order has been passed before the period of 14 days from date of issue of the notice of proceeding with the application, within which, order of allowing or rejecting the application under Section 127(1) of the Customs Act, 1962 has to be passed by the Settlement Commission, the applications cannot be admitted by the Settlement Commission. 5.2 Regarding acquiring of exclusive jurisdiction to exercise the power and perform the functions of the Commissioner by virtue of Section 32-I(2) of the Act, the jurisdictional Commissioner of Customs has relied upon a judgment of CESTAT, South Zonal Bench, Bangalore in case of Commr. of C.Ex. Visakhapatnam v. Deccan Vaneer P. Ltd [2008 (223) E.L.T. 263 (Tri.-Bang.)]. 5.3 They further submitted that the applicant was given 3 opportunity of personal hearing i.e. on 21-12-2011, 26-12-2011 and 10-1-2012, nobody attended the hearing nor submitted any proof of approaching the Settlement Commission, hence the case was decided ex parte on merit on 12-1-2012. It appears that applications were suitably timed as an attemp....
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...., because of the insistence of the department, the applicant has accepted the assessable value arrived at by the department on the basis of market enquiry and has paid differential Customs duty along with applicable interest in the spirit of settlement of the case. Therefore immunity from fine, penalty and prosecution may be granted to the applicant as well as the co-applicant. 6.4 The ld. Representative of the Jurisdictional Commissioner reiterated the submissions contained in the Commissioner's report and requested that the application may not be allowed to be proceeded with and should be rejected. FINDINGS 7.1 The Bench has carefully gone through the applications of Shri Navin Ghai, Applicant, and Shri Jaidev Kukreja, Co-applicant, as well as report received from Revenue. The Bench has also taken into account submissions made during personal hearing on 19-6-2012. 7.2 In this case, the applications have been filed by Shri Navin Ghai, Proprietor of M/s. Ganapati SRJ Associates, New Delhi and Shri Jaidev Kukreja, Marketing Manager for M/s. Ganapati SRJ Associates, Mumbai. The SCN No. S/26-MISC-21/08-IIB dated 30-6-2011 was issued to the applicant and co-applicant....
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....by the applicants is inconsequential. 32. Of course, there is the danger that to prevent an assessee from seeking a settlement of his case, the adjudicating authority may quickly pass the adjudication order the moment he gets an inkling that the assessee is about to approach the Settlement Commission. There is also the danger that the adjudicating authority may back date an order. Adjudicating authorities are not supposed to behave in this manner and are presumed to function within the boundaries of law but, these things can happen. Would not a literal construction of the provisions then come in aid of such errant officers and run counter to the legitimate hopes of assessees who want to come clean, pay their taxes and have their cases settled by the Settlement Commission? The answer to this would lie in construing the date of adjudication to be the date on which the adjudicating authority loses his locus poenitentia, or opportunity to tear off, destroy or alter the adjudication order. In other words, when the order goes out of his control. And, that happens when the order is signed and the one-way process of sending it to the assessee is put in motion eithe....
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....tional Bench, Mumbai on 10-1-2012. Therefore, the bench has no hesitation in declaring adjudicating order dated 12-1-2012 passed by Joint Commissioner of Customs as non-est in the eyes of law and take up this case for settlement. 7.7 Undisputed facts in this case are that M/s. Ganapati SRJ Associates, New Delhi of which Shri Navin Ghai, was Proprietor, imported 'Whey Protein' vide Bill of Entry dated 12-12-2007 in which declared CIF Value was Rs. 1,63,272.69 (Rs. 1.63 Lakhs approx.). The container was duly examined. While the product matched with the description given in Bill of Entry, the declared value seemed very low. As per Market survey, the retail value of the consignment was found as Rs. 64,65,600/- (Rs. 64.66 Lakhs approx). The value as per internet information was Rs. 41,95,206/- (Rs. 42 Lakhs approx). The plea of the importer is that the goods were nearing expiry and therefore he was able to obtain extraordinarily high discount. Finally, Revenue demanded differential duty of Rs. 13,04,165/- taking revised assessable value as Rs. 22,27,399/-. This value, according to Revenue, approximated value which could be arrived at on the basis of supplier price list value of Rs....