TaxTMI 
TaxTMI 
2016 (1) TMI 97
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....llants M/s Shreenath Enterprises, a proprietorship firm of Mrs. Tejas Venkatraman and M/s GNG & Co., a partnership firm of partners Shri. Prakashchandra Pandya and Shri. Nandgopal Govindswamy Naidu and aiding and abetting therein by Shri Prakash Pandya, SHri Hitesh Israni and Telebrands India Pvt. Ltd. 2.1 M/s Shreenath Enterprises was operating from the premises of M/s. G.N.G. & Co. the work of both the firms was being looked after by S/Shri Prakash Chandra Premshankar Pandya and Shri Nandgopal Naidu. The premises of the said M/s. G.N.G. & Co. and M/s. Shreenath Enterprises and M/s. Telebrands India Pvt. Ltd., were searched and incriminating documents were recovered. Further goods which were purchased by M/s Telebrand from the above firms were identified and detained. Further goods were also detained from the premises of a dealer M/s. Teleproduct. 2.2 During the course of investigation statements of S/Shri Prakash Chandra Premshankar Pandya and Nandgopal Naidu, Hitesh Israni and CHA were recorded under Section 108 of the Customs Act, 1962. 3. The investigation Revealed that- 3.1 The appellants had imported various goods including AB King Pro (Exercise Bench), 5 in 1 Ai....
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....ed the correctness of statement of Shri Pandya. 3.5 Two E-mails recovered from the seized file (1). E-mail dated 16.6.2005 from Shri Prakash Pandya to Shri Felix wherein it has been mentioned that "Tuesday you will receive t.t. from Dubai for balance 2 container", Monday I will make 4 more container t.t.", e-mail dated 15.6.05 from Prakash Pandya wherein it mentions that "I don't understand why you not received money but by Dubai bank has already sent money on Friday from Dubai today I will send you the remittance letter so you push the bank. 3.6 From these e-mails it appeared that the balance amounts were arranged through a bank in Dubai. E mail dated 23.08.2005 from Shri Felix of China 5 Star Products stating- "subject: Proforma Invoice Dear Prakash "We have enclosed PI for FOB NINGBO USD 18, pl confirm and for Bank the price is not changed, it is still USD 7.50 Regards Felix, Email dated 23.08.2005 05.56.09 Subject: Re: LAST PRICE OF AB KING PRO "OK the price is accepted because Chinya is my best friend" Regards Prakash 3.6 Invoices of China 5 Star Products raised on Hotbrand UAE and TV Mart WOR....
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....uty is confirmed against Tejas on the basis of the said two pages allegedly recovered from Prakash Pandya and his retracted confessions. (b) The said two pages are not signed by any person nor do they bear the stamp of any company. The name of the foreign supplier is not mentioned on the said two pages. The currency is also not indicated. (c) The descriptions of the good in the invoices are different from the descriptions mentioned on the said pages 124 & 125. The descriptions do not match or do not tally and it is impossible to correlate the descriptions. E.g. the description Slim & Lift according to the department is the actual description for goods declared to be female shorts/under garments(tight hosiery). As per Supreme Court Judgement in the case of Bussa Overseas Properties Ltd. [2007 (216) ELT 659 (SC)] such documents cannot be treated as evidence to prove undervaluation. (d) The confessions of Prakash Pandya recorded between 19.4.2006 upto 29.6.2006 were retracted by letters dated 31.7.2006. Though the retractions were served, there was no rebuttal offered by the DRI. In the case of Mohtesham Mohd. Ismal [2007 (220) ELT 3 (SC)], the Hon'ble Supreme Court has h....
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.... as under:- "Recording of the confessional statement would not put an end to the investigation and the Revenue Officers should be careful to ensure that they are not tricked out of a regular and detailed investigation by making strategic confessions which are retracted by preparing affidavits soon after they are made and which affidavits are again strategically withheld from the Revenue Officers, so that they become complacent and do not carry out a fuller investigation. It appears that the Revenue Officers in the present case have fallen victim to this type of strategic confessional statements which have been retracted soon after they were made in the affidavits which were withheld by the deponents till the proceedings came up before the Commissioner, by which time the damage of not a making fuller investigation, thinking that the confessional statements are made and not retracted, was already done." (j) The Notice does not contain any evidence of remittance of differential amounts (as mentioned in the said pages 124 & 125) to the foreign suppliers. In the following judgments it is held that undervaluation cannot be established unless remittance is proved: (1)....
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....er it was found that there is strong parallel between the instant case and the case cited. Nothing contained in the printout generated by the PC can be admitted as evidence for non- fulfilment of the statutory condition." In this case also, we find that the parallel situation as to the decision of Premium Instruments & Controls (supra). Therefore, the printout generated from the PC seized cannot be admitted into evidence for non-fulfillment of statutory condition of Section 138C of the Customs Act, 1962." 5) Shri Balani in addition to the above common submission, also made specific submission in respect of Appellant M/s. GNG & Co. as under: 1) (a) The source of e-mail correspondence relied upon by the department is not disclosed unlike RUD in Sr. No. 17 of Annexure-A. It was not recovered under any Panchnama. (b) Panchanama dated 18.4.2006 refers to copies of invoices and other documents, Challan Books, etc. However, it does not mention any e-mail correspondence. (c) Signature of Ashwin Gupta is missing on the said e-mails unlike pages 124 & 125 of seized file No. A1. (d) The said e-mail correspondence was not shown to Prakash Pandya while recording his statement dat....
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....the authenticity of the documents must be established before taking them into evidence. Reliance is placed on Section 139 of the Customs Act in this connection. In support of this submission relied upon the judgment of Agravanshi Aluminium (supra). 7) Pages 55 & 57 mentioned in statement dated 18.1.2010 of Nandgopal Naidu refer to computer printouts of 2 proforma invoices for air Sofa Massage. Both the said proforma invoices are neither signed nor stamped by the foreign supplier. For the first time they were shown to Nandgopal Naidu on 18.1.2010 after a delay of 4 years from the date of alleged seizure on 18.4.2006. Signature of Prakash Pandya was never obtained on these invoices and he was never shown the said invoices. The goods are massage chair imported from China. Supplier M/s. Creative Nation shipped 5-in-1 Air sofa which is a different commodity. 8) Without prejudice to the above, penalty is imposed on Nandgopal Naidu without disclosing his involvement and role. 9) In the circumstances, it is humbly prayed that the impugned Order be set aside and the Appeals be allowed with consequential reliefs to the Appellants. 10) Shri Balani during the hearing also submitted....
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....Majeed vs. Commissioner of Customs, Cochin, 2014 (229) ELT 108-TRI Bang. Therefore retraction is not a valid retraction. Further the so called retraction has been made on the first available opportunity other it to be treated as an after thought as held in the matter of - ii) Pundole Sharrukh & Co. Vs. Commissioner of Customs (Gen.), Mumbai - 2014 (313) E.L.T. 573 (Tri-Mum) (iii) Shailesh Amulakh Jogani vs. Union of India - 2009(241) ELT 348 (Bom.). That in case of Surjeet Singh Chhabra vs. Union of India - 1997 (89) E.K.T. 646 (S.C), Hon'ble Apex Court has held that confession statement made before custom officer through retracted within six days is an admission and binding since custom officers are not police officer. In any case mere retraction of confession not sufficient to make confessional statement irrelevant. In this regard, the following judgments are relied: Vinod Solanki vs. Union of India - 2009(233) E.L.T. 157 (SC) 5.1 In view of the above it is submitted that there was no retraction by Shri Pandya and even in his letter is taken as retraction it an afterthought hence his statements are true and correct. 5.2 It was further submitted t....
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....assessable value has to be determined on contemporary import of identical similar goods on record. The Commissioner erred in determining assessable value on the basis of statements which were ultimately retracted. ---- It is submitted that the value given in the statements are based on the records recovered from the premises of the importer. These value were also confirmed by Shri Pandya to be true. The Department has therefore correctly relied upon these values as these values are real transaction value. 5.7 That once value was enhanced by the department after referring to NIDB Data, value could not be further enhanced. - This was not a ground taken by the appellant in reply to SCN or at the time hearing a ground taken in appeal. Further appellant have not stated as to whether the value was enhanced in case of all bills of entry or only few. On perusal of the SCN it is seen that only in respect of three bills of entry (ie at s. 10,11 and 13 page 59 of the appeal) value was enhanced at the time of original assessment. Further this is case where the importer had mis-declared the value of goods. When the value was enhanced even at the time importer was aware regarding the correct ....
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....Hitesh Israniand after clearance this sofa was sold to M/s. Telebrand. Investigations in the matter revealed that the value of 5 in1 sofa was misdeclared and that Shri HiteshIsrani was aware regarding the actual value of the sofa. These evidences shows that m/s. Telebrand and Shri Israni has aided and abetted the acts of misdeclaration of the importer and they are liable for imposition of penalty. From the findings of the commissioner of customs and submissions made above, it is clear that appellant has not made out any case. It is therefore submitted that Hon'ble Tribunal be pleased to uphold the order passed by the Commissioner of Customs and reject the appeals. 6. We have carefully considered the submissions made on behalf of Appellants as well as the submissions made by the Ld. Special Counsel on behalf of the revenue and perused the records. 7. We observed that the department heavily relied upon the statements of Shri Prakashchandra Pandya and Shri Nandgopal Govindwamy Naidu. We find that both the persons have retracted their so called confessional statements vide letter dated 31.07.2006. Therefore the said statements vide letter dated 31.07.2006. Therefore the sa....
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....n supplier is not mentioned on the said two pages. The currency is also not indicated. The descriptions of the goods in the invoices are different from the descriptions mentioned on the said pages 124 & 125. The descriptions do not tally and it is impossible to correlate the descriptions. We find that as per the ratio laid down by the Hon'ble Supreme Court in Bussa Overseas Properties Ltd.,2007 (216) ELT 659 (SC), such documents cannot be treated as evidence to prove undervaluation. Moreover, Shri Prakash Pandya immediately retracted by letters dated 31.7.2006 the confessions recorded from 19.4.2006 upto 29.6.2006. No rebuttal to these retractions were served on him by the department. No further statements of Shri Prakash Pandya after his retraction were recorded. No two parallel invoices were recovered in any search operations. Enquiry was not conducted on alleged remittance of foreign exchange abroad. In the circumstances, the learned Commissioner ought to have examined Prakash Pandya before considering his statement as relevant as required under Section 138B of the Customs Act in the course of the adjudication proceedings. In Agrawal Round Rolling Mills Ltd. 2015 (317) ELT 1....
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.... 7.4 We find that there is no evidence of remittance of differential amounts (as mentioned in the said pages 124 & 125) to the foreign suppliers. It is a trite law that undervaluation cannot be established unless remittance is proved as held by the Tribunal in Reshmi Petrochem Ltd. - 2009 (237) ELT 307 (T), Dee Kay Exports - 2012 (285) ELT 109 (T) and Shah and Shantibhai - 2004 (174) ELT 718 (T). 7.5 In the case of Agarvanshi Aluminium Ltd 2014 (299) ELT 83 (T) the Tribunal held as under:- From the above provisions, it is clear that for admissibility of computer printout there are certain conditions have been imposed in the said section. Admittedly condition 4C of the said section has not been complied with and in the case of Premium Instruments & Controls (supra) this Tribunal relied on the case of International Computer Ribbon Corporation 2004 (165) ELT 186 (Tri-Chennai) wherein this Tribunal has held that "computer printout were relied on by the adjudicating authority for recording a finding of clandestine manufacture and clearance of excisable goods, it was found by the Tribunal that printouts were neither authenticated nor recovered under Mahazar. It was also found that....
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....ated with respect to the report received from abroad while recording his statements. The said letter also bears a Caveat to the effect that the said document is not to be shown/copied to a third party or used in any proceeding. In fact the covering letter of the Consulate General of India, Hong Kong to the DRI makes it clear that the said letter bears the caveat and if a caveat free report has to be obtained, the procedure under Mutual Legal Assistance ordinance, Hong Kong SAR ought to be followed by DRI. Obviously the said procedure has not been followed in this case and the letter which is received with the said caveat cannot be used in the present proceedings. Moreover, no authenticated copies of the alleged invoices of Creative Nations International Limited, Philippines have been forwarded with the said Letter/report of Hong Kong Trade Investigation Bureau. In the absence of such authenticated copies being supplied, no reliance can be placed on the said report. In CC v South India Television P. Ltd.- 2007 (214) ELT 3 (SC), the Hon'ble Supreme Court held that mere Investigation Report of the Hong Kong Excise and Customs (which had a similar caveat as in the present case as w....
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.... and Data of contemporaneous imports during the course of hearing. Once it is undisputed fact that the declared value was not accepted and for the purpose of assessment valuation was done on the basis of contemporaneous price of identical or similar goods, we find substantial force in the contention on behalf of the appellants that further enhancement of value was not permissible in the facts of the instant case. In CC v Paras Electronics 2009 (246) ELT 231 the Tribunal held that- "5. We find that in this case the price declared by the respondents was not accepted and was enhanced by the assessing officer from US $ 270/ pc to US $ 313/pc. Once the price was enhanced, the revenue is supposed to make all the enquiries as it may consider necessary before increasing the price. The second show cause notice cannot be issued on the same subject when the declared price was not accepted initially and already stands enhanced...." In CC v Lord Shiva Overseas - 2005 (181) ELT 213 the Tribunal observed that- "4(e) This Tribunal, in the case of Hitaishi Fine Craft Industries Pvt. Ltd. [2002 (148) ELT 364] had held that when a BE was assessed and declared value of USD 490 PMT....
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.... of Golden Power Brand Button Cells covered by Bill of Entry No. 4004 dated 29-8-97 was enhanced to Rs. 14,04,000/- and value of Button Cells covered by Bill of Entry No. 1423, dated 11-9-97 was enhanced to Rs. 11,96,000/-. The loading was done on the basis of evidence of contemporaneous import data available with the department and after detailed examination of the goods. Since the Bills of Entry were finally assessed after enhancement of value, there can be no further loading of value as held by the Tribunal in the case of Informatika Software v. CC(P), Kolkata [1997 (73) ECR 348], and Lord Shiva Overseas [2005 (181) E.L.T. 213] particularly on the basis of quotations/letters/price lists. No export declaration of the supplier is available with the department in respect of Maxell Brand Batteries. The loading on the basis of profoma invoice signed by Nitin and Sanghvi and issued to SANSHO, Japan cannot be relied upon as it is well-settled that value cannot be loaded on the basis of proforma invoice. The export declaration in respect of Golden Power Brand Battery Cells are unsigned photocopies and hence the persumption about their genuineness under Sec. 139 of the Customs Act is not....