TaxTMI 
TaxTMI 
2013 (4) TMI 653
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....he goods were examined by the 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 Articlewise net weight 1. Sweater 560 bales 46988 Kgs. 54880 Kgs. 35204 kgs. 2. Trousers 130 bales 8172 kgs. 3. Tops 3 bales 189 kgs. 4. Misc. 180 bales 11315 Kgs. Total 873 bales 54880 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/- fo....
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.... 78 bales of 'ladies cotton pant' were found to be completely soaked and unfit for use. 3.5 The above table revealed that as 86 bales out of the 873 bales of the consignment were found to contain jackets and shirts only. Moreover, most of the articles of the consignment having 'no sign of appreciable wear', as found during the said re-examination by DRI, did not appear to qualify for the description of 'worn clothing' as per requirement of Note 3 to the Chapter 63 of Customs Tariff along with the corresponding HSN Explanatory Notes discussed above. Thus, the goods of the subject consignment appeared to have been misdeclared reinforcing the doubt, already raised supra, about the genuineness of the corresponding invoice submitted by M/s. A.N. Impex before the Customs Authority. This doubt appeared to be further corroborated by the fact that although the bales of the impugned consignment borne 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 in the packing list. The articles of the subject consignment, therefore, appeared to be covered, not in CTH 6309 as claim....
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....ems of article worn cloth on wholesale basis, the premises of one M/s. Ma Vabatarini Enterprises, a wholesale trading firm of 'worn clothing' was visited by the officers of DRI. The said office-cum-godown was stacked up with about 450 bales of 'worn clothing'. Similarly, the clothing was re-examined by DRI. 3.9 Thereby statement of Shri Deepak Das was recorded under Section 108 on 22-11-2008 in which he gave details of placing orders, taking delivery of goods, making payment etc. and recording Code Nos. etc. In his statement Shri Das also explained about the various entries in the Register maintained at the godown and a list of entries. It was found that about 2.1 lakh kgs. of clothing in 100 kgs,/80 kgs. bales and 1.15 lakh kgs. of clothing in 45 kgs./500 kgs. bales had been purchased by the said firm for a total amount 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 purcha....
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.... of old and used garments completely fumigated from M/s. Al Liberty International, Houseton and the Examination Committee had found the goods as per the description given in the Bill of Entry. DRI officials found no sign of appreciable wear without the support of any Technical Expert's view or Test Report. The contention is that : They imported 873 Bales of "old and used garments completely fumigated" from M/s. Al Liberty International Rags, Houston and the Examination Committee had found the goods as per the description given in the Bill of Entry whereas DRI Officials found no appreciable wear on visual examination without the support of any technical expert's views or test reports. The Customs Authorities had assessed the duty on the said goods by enhancing the value to USD 0.60 per kg. from the declared value of USD 0.417 per kg. and further re-determination of re-determined value is not provided either under the Act or under the rules made thereunder. The Chapter Heading 6309 covers worn clothing and other worn articles; that there is no sub-heading under this heading; that all worn clothing such as jackets, shirts, trousers, T-shirts etc. fall under the same Heading. The at....
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....en did not indicate any guidelines and/or circulars or notifications in respect of such parameter. Admittedly, the imported goods were old and used. The goods cannot be said to be old and used unless the same is appreciably worn. Undisputedly, goods were imported in bales. The AR of the Department ultimately fairly admitted at the time of hearing that the goods were old and used. There is no scope for classifying those goods under respective tariff heading unless the same are new or MRP is put on those goods in different boxes. Thus irrefutably only conclusion would be that the goods imported were old and used garments and were correctly declared as old and used garments meriting classification under tariff item 63090000.). 4.1.3 So far as the value is concerned, the contention is that once the goods are held to be 'old and used' and classifiable under Chapter 63090000 as per the decision in the Commissioner's conference in Tariff and Allied Matters held on 21st & 22nd January, 2000 and subsequent Ministry's Circular No. 36/2000, dated 8-5-2000 the importer was under no obligation to resort to item wise declaration in respect of old and used garments. The co-noticee Officer....
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.... mentioned in the invoice(s) either in kind or in any other manner. Reference may be made to the following decisions : (i) Commissioner of Customs, Calcutta v. South India Television (P) Ltd. - 2007 (214) E.L.T. 3 (S.C.); (ii) Commissioner of Customs v. Initiating Explosive Systems (I) Ltd. - 2008 (224) E.L.T. 343 (S.C.); (iii) Commissioner of Customs v. Prodelin India (P) Ltd. - 2006 (202) E.L.T. 13 (S.C.) (iv) Commissioner of Customs v. J.D. Orgochem Ltd. - 2008 (226) E.L.T. 9 (S.C.); (v) Sarg Electro Acoustics Pvt. Ltd. v. Commissioner of Customs - 2009 (240) E.L.T. 448 (T) 4.1.4 The contention is that Section 111(d) was not invoked in the Show Cause Notice, the Adjudicating Authority invoked Section 111(d) by traversing beyond the scope of the SCN, which is not permissible in law but nevertheless vindicates that the goods are old and used garments classifiable under tariff item 63090000. In support of their contention, they have placed reliance on a decision in the case of Raghunath International Ltd. - 2011 (266) E.L.T. 432 (All.). 4.2.1 Common contention of Sri P....
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.... wholesale prices of the goods produced in the domestic Indian market. The obligation has been cast upon the importer to ensure correct/genuineness of the nature and the value of the goods invoice/documents before handing over for the preparation of the bill of entry and seeking clearance thereof on behalf of the importer and to find out the correctness of the above aspect of whatsoever Officer of the Customs Department is concerned in this manner. The contention is that the alleged involvement in clearance of old and used garments cannot be justifiable fact in the present case. The contention is that penalty under Section 112 has to be arrived at after determining the fact that the said goods in the present case were liable for confiscation for mis-declaration and mis-description thereof and its value. The contention is that the Commissioner 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 ....
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....de of L.C.P (new) were found to be containing 'ladies cotton pant only'. Md. Umar Khan, father of the proprietor of the importing firm, in his statement dated 17-2-2009 and 18-2-2009 recorded under Section 108 of the Customs Act, admitted that he was fully aware of the fact that code number was written on each bale and that his customers also know about the bale code number and what such code denotes and which item is inside the bale having the specific code. He also admitted that each item has different price depending on its quality. Thus it is quite obvious that no mark no. and code no. was mentioned in the invoices and packing list deliberately to suppress the true identity of the imported goods. It further appeared that the price declared in the invoices is not reflecting the true value of the individual items imported. 5.2.7 The officers of the Customs Examination Committee were also found to have not examined the goods properly as is evident from their findings dated 5-9-2008 vis-a-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 imp....
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....han, the importer and the CHA, Gee Pee International admitted to have dealt with Sri Deepak Das of Ma 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 Deepak 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]. 5.2.9 All the officers of DRI who participated in the re-examination of goods and the CHA who were present during re-examination, were present before the adjudicating authority as requested by importer for cross examination. But surprisingly they were not cross examined which goes to show that the importer did not question the findings of the re-examination and the importer has created an issue of non-appearance of Shri Deepak Das. The contention is that CHA was found to be involved not only in the attempted misdeclaration of description and value of the goods, they were also found to be a beneficiary of such misdeclaration inasmuch as they used to deliver 3....
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.... falling under Chapter 6309 of CTA, 1975 and also are undervalued. Accordingly the proceedings were initiated against noticees. 7.2 So far as the classification is concerned, the ld. Commissioner has found as under : "............Moreover, in the instant case, most of the articles of the consignment were found to be having 'no signs of appreciable wear' and accordingly did not qualify for the description of 'worn clothing' as per requirement of Note 3 to the Chapter 63 of the Customs Tariff Act, 1975 along with the corresponding HSN Explanatory Notes. Therefore, the subject goods did not merit classification under Customs Tariff Heading 63.09 of the CTA, 1975. These goods were classifiable in their respective individual CTH of each type of garment............" "On the contention of the notices importer that DRI officials found 'no signs of appreciable wear' on visual examination, which was without support of any - technical expert's view or test report, I find that DRI officers re-examined the goods and had drawn 5 (five) panchanamas dated 10-2-2009, 11-2-2009, 12-2-2009, 13-2-2009 and 1-7-2009 in presence of the independent witnesses/panchas and also in presence of t....
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....s and travelling rugs; (iii) bed linen, table linen, toilet linen and kitchen linen; furnishing articles, other than carpets of Headings 5701 to 5705 and tapestries of Heading 5805. (b) footwear and headgear of any material other than asbestos. (I) In order to be classified in this heading, the articles mentioned above must comply with both of the following requirements : (i) they must show signs of appreciable wear and (ii) they must be presented in bulk or in bales, sacks or similar packings." 7.4 From the above it follows that as per Chapter Note 3(b)(1) in order to be classified under Chapter 6309, the article must comply for both the above requirements. The goods were presented in bales is not in dispute. So far as the other requirement - "they must show signs of appreciable wear". We find that in Panchnama dated 10-2-2009, it is recorded that most of the items contained in the Bales bursted were bearing 'no' or 'very little' sign of appreciable wear. Further in Panchnama dated 11-2-2009 it is recorded that most of the examined items (burs....
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....et prices of imported 'worn clothing'. Valuation of the articles having 'no signs of appreciable wear' had been done taking higher range of purchase price as the 'wholesale market price of the goods as found in the 'Purchase Register' of M/s. Ma Vabatarini Enterprises, who was dealing in identical/similar imported goods. The valuation was not done on the basis of any transaction of any indigenous goods. The noticee importer did not give break-up of the articles of the consignment which had a bearing on its valuation in terms of explanation (iii) to Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Noticee's contention that the Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had no application or Rule 4/5 was applicable here, is not convincing at all as the subject goods were not of any uniform standard. Accordingly, said Rules 4 and 5 did not have any application and said Rule 9 of the Valuation Rules, 2007 supra, (corresponding to Rule 8 of the Customs Valuation Rules, 1988) had been followed in the instant case for valuation of the goods. Interpretative Note to said Rule 9 allowed reasonable flexibil....
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.... is rejected, the value shall be determined by proceeding sequentially in accordance with Rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price, (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non-declaration of parameters such as brand, grade, specifications tha....
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..... 3 (S.C.)] endorsed the same views. "Therefore, the transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e. at the time when the goods reaches the customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price, the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods ....