TaxTMI 
TaxTMI 
2013 (4) TMI 133
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....Examination Committee. The break-up of various articles of the consignment found during examination, was as under : Sl. No. Articles Quantity Declared net weight Ascertained net weight Article-wise net weight 1. Sweater 365 bales 24,494 Kgs. 25,160 Kgs. 17006 Kgs. 2. Trousers 60 bales 2796 Kgs. 3. T. Shirt (W/N) 8 bales 17269 Kgs. 4. Misc. 107 bales 3354 Kgs. Total 540 bales 25,160 kgs. 3.2 The import of 'worn clothing' is restricted in terms of Foreign Trade Policy provisions, the subject consignment was pending adjudication by the Additional/Joint Commissioner of Customs, Custom House, Kolkata, in terms of Board's Circular No. 36/2000-Cus., dated 8th May, 2000 while importing old and used garments under CTH 63.09, the imposition of fine and penalty for violation of EXIM policy. The wholesale market price (WSMP) was required accordingly of various worn clothing was ascertained by Customs House, Kolkata. The said WSMP for some of the items was (a) Rs. 90/- for Jacket and White Shirt, (b) Rs. 86/- for Shirts, (c) R....
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....rity. This doubt appears to be further corroborated by the fact that although the bales of the impugned consignment bore readable code phrase/words, indicating a particular type of articles, as revealed during the re-examination by DRI, the same was not declared either in the invoice or the packing. The articles of the subject consignment, therefore, appear to be covered, not in CTH 6309 as claimed but with the corresponding new articles under the respective CTH. 3.5 The Wholesale Market price of the jackets and shirts, as per findings in the Custom House F. No. S60 (Misc.)-208/95A (Gr.III) Pt. as discussed supra, being much higher than sweater/miscellaneous items it appears that the Fine and Penalty imposable, in terms of Board's Circular No. 36/2000-Cus., dated 8th May, 2000, discussed supra, would be several times higher than those imposable in case of the consignment containing only sweater, miscellaneous items and trousers, as reported earlier in the Custom House Examination report. 3.6 Thereby statement of Shri Prabhat Manna, one of the Partners of M/s. Gee Pee International, the Custom House Agent for the subject consignment in his statement dated 12-9-2008 stated that....
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....t of Rs. 1.75 crores and 0.62 crore respectively. The said purchases were mainly for the period between April, 2008 to August, 2008. The Register maintained at the godown of M/s. Ma Vabatarini had range of purchase price pertaining to 45 Kgs./500 Kgs. bales were also revealed and 100 kgs./80 kgs. bales were revealed. The DRI came to the conclusion that purchase price of M/s. Maa Vabatarini Enterprise is wholesale market price in article of 'worn clothing' inasmuch as the same were sold in the form of bales basis to them and there was a huge duty on the subject consignment and its declared value of USD 0.45 per kg. (=Rs. 17.97 per kg.) which was subsequently enhanced to USD 0.60 per kg. (Rs. 25.86 per kg.). 3.9 Accordingly proceedings were initiated for mis-declaration and undervaluation and accordingly a show cause notice was issued against M/s. S.S. Impex, Gee Pee International, Prabhat Manna, Gautam Adhikary, Shri N.C. Roy Chowdhury, Shri Shyamal Mondal, Shri S.C. Saha & Shri M. Meena. 3.10 Vide impugned order No. KOL/CUS/PORT/07/2010, dated 25-2-2010 ordered confiscation of goods covered under Bill of Entry No. 422853, dated 29-7-2008 of M/s. S.S. Impex. (ii) Gave optio....
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....ed goods. 4.1.2 The contention is that the declared value of the goods as USD 0.45 per Kg. reflected the correct transaction value since there is no evidence to show that there is some flow back of funds, but the Customs authorities assessed the bill of entry enhancing the value to USD 0.60 per kg. and the duty so assessed has already been paid. The enhancement of value based on extraneous considerations like the purchase register and the statement of M/s. Ma Vabatarini Enterprises without subjecting them to the testimony of cross-examination has no evidentiary value and cannot be made sustainable and the same in no way shall be basis for re-determination of value under Rule 9 of CVR 2007 that too, skipping preceding rules of CVR, 2007 particularly when value under Rules 4 and 5 were available to the DRI at the click of a button which has been deliberately suppressed. If the values of contemporary imports were brought on record then the declared value would be proved to be fair and there would be no need to resort to the subsequent Rules. 4.1.3 The contention is that ld. Commr. has rejected the contention of the DRI that the goods are not classifiable under Chapter 6309 and t....
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.... value of the imported goods and placed reliance on the following decisions : (a) Rex Printing Press, 2005 (184) E.L.T. 73 (Tri.-Bang.) (b) Navpad Enterprises, 2009 (235) E.L.T. 376 (Tri.-Bang.) (c) Shankar Trading Co., 1999 (106) E.L.T. 456 (Tri.) (d) Photo Fax System & Ors., 2010 (174) ECR 288 (Tri.-Kol.) 4.2.1 Common contention of Sri Prabhat Manna, partner of G.P. International (CHA) and Gautam Adhikary is that the findings against them are mere presumption and assumption basis on extraneous and irrelevant materials. The Ld. Commr. himself has admitted that the goods covered under Bill of Entry No. 422853 dated 29-7-2008 for old and used garments. On re-examination by DRI, the same number of bales as declared were found which was earlier found by the Examination Committee. In these circumstances, there can be no allegation against CHA or its partners of mis-declaration or description of quantity. The contention is that there is no allegation in the SCN nor finding that price of said goods being negotiated by appellant or its partners including Ma Vabatarini Enterprise. Even according to SCN, the appellant only carried out delivery of earlier consignments of simil....
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....mmissioner has erred in holding that appellants responsibility for all transactions in relation to the said goods since the goods are very old and used and no transaction had taken place. The Department could not bring out any ingredients against the appellant on abetting or omission of such goods and satisfied on imposition of penalty under Section 112 of Customs Act, 1962. In support of their submission they have placed reliance on : (a) Rex Printing Press, 2005 (184) E.L.T. 73 (Tri.-Bang.) (b) Navpad Enterprises, 2009 (235) E.L.T. 376 (Tri.-Bang.) (c) Shankar Trading Co., 1999 (106) E.L.T. 456 (Tri.) (d) Photo Fax System & Ors., 2010 (174) ECR 288 (Tri.-Kol.) 5.1.1 The Department has not challenged the finding of ld. Commr. regarding old and used garments. The Department filed appeal against the order of ld. Commissioner whereby the proceedings against the departmental officers were dropped. 5.2.1 The contentions of Shri M.K. Sil, Spl. Counsel appearing for the Department are as under : 5.2.2 All the 540 Bales of the consignment had some code word/phrase on the outer transparent covers (packing materials) which could be seen on visual inspection without even....
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....s Examination Committee were also found to have not examined the goods properly as is evident from their findings dated 5-9-2008 vis-à-vis finding of DRI on re-examination dated 10-2-2009, 11-2-2009 & 12-2-2009. Most of the imported goods were shown in their report as sweaters and misc. items to reduce the quantum of imposable fine and penalty as those items has the lowest margin of profit as per WSMP calculated by Custom House itself & which practice was followed by the adjudicating authorities for the purpose of imposition of Redemption Fine and Personal Penalty while allowing release of such consignments in the past. It was claimed that the information available to DRI was not available with them and hence there was error in their report. The contention is that all the bales were distinctly marked with specific code word from which content of the bales are easily recognizable. The contention is that there has been mark on the bales which identifies the type of material/item inside the respective bales which could be ascertained even without strip opening or burst opening, simply visible on the outer packaging of the bales. In support they produced certain photographs. For....
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....er. Ld. Adjudicating authority also discussed in detail why he had accepted the valuation Rule 9. The statement given by Shri Deepak Das of Ma Vabatarini Enterprise regarding the record produced by him were challenged due to his non-appearance for cross-examination. The contention is that Shri Das did not appear in spite of issuance of circular to him for cross-examination. The contention is that summon cannot be issued for his appearance before the adjudicating authority as summon is meant for the purpose of inquiry only. The contention is that Md. Umar Kahn, the importer and the CHA, Gee Pee International admitted to have dealt with Sri Dipak Das of Maa Vabatarini. In fact, entry of goods earlier sold by Md. Umar Khan can also be seen in the said register. Thus there appears to be no doubt about the existence of Sri Dipak Das and Ma Vabatarini Enterprise and the transaction between the importer and the said firm. In support, they placed reliance on this Tribunal's decision in the case of Joitkumar B. Jain v. Commissioner of Customs (P), Mumbai [2005 (191) E.L.T. 218]. 5.2.10 All the officers of DRI who participated in the re-examination of goods and the CHA who were present du....
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....ion found that : "Bond CWC, Maheshtalla B/E No. 422853 dated - 29-7-2008 Subsequently, the DRI carried out re-examination of 83 bales out of 540 bales after burst opening the bales and came to the conclusion that the goods are other than 'old and used goods' claimed to be classifiable under Chapter 6309 of CTA, 1975 and are undervalued. Accordingly the proceedings were initiated against noticees. 7.2 So far as the classification is concerned, the ld. Commissioner found as under : (a)"............ The panchanamas drawn on re-examination of goods by DRI, Kolkata did not support the allegation made in the show cause notice that the goods were having 'no signs of appreciable wear'. Therefore, I am inclined to accept the contention of the importer that goods were 'old and used garments' classifiable under CTH 63.09 of the Customs Tariff Act, 1975........". (b) From the above it is clear that ld. Commissioner has decided the classification of the goods as old and used garments classifiable under CTH 6309 of the Customs Tariff Act, 1975 as claimed by the importer. Undisputedly, no one has challenged the same therefore the same has reached finality. 7.3 So far as valuat....
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....rted Goods) Rules, 2007. I am inclined to accept the basis of valuation adopted by DRI under rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Consequently, I hold that the assessable value of the subject consignment is Rs. 16,98,440.51 as re-determined in Table XIV supra." Undisputedly the value was initially enhanced from USD 0.45 per kg. to USD 0.60 per kg. based on the NIDB data available to the assessing officer and the bill of entry was assessed. 7.4 We find that the value already enhanced was sought to be rejected by resorting to Rule 12 of Customs Valuation Rules and valuation have been done in terms of Rule 9 of Customs Valuation Rules, 2007. Rule 12 of CVR provides that : Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so decl....
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....e determined by proceeding sequentially in accordance with Rules 4 to 9. Thus the Rule 12 of the CVR, 2007 does not empower the proper officer to reject the transaction value without establishing that the transaction value was not genuine. 7.6 We find that the Hon'ble Supreme Court in the case of Eicher Tractors Limited, reported in 2000 (122) E.L.T. 321, wherein it has been held that if the transaction value cannot be determined under Rule 4(1) [now Rule 3(1)] and does not fall under any of the exceptions in Rule 4(2) [now rule 3(2)], there is no question of determining the value under the subsequent Rules. 7.7 We also find that in CC, Mumbai v. J.D. Orgochem Ltd. reported in 2008 (226) E.L.T. 9 (S.C.), the Apex Court relied on its decision in Eicher Tractors Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.)] which is extracted hereunder : "14. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question....