TaxTMI 
TaxTMI 
2016 (3) TMI 294
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....97,46,340/-. On intelligence that appellant misdeclared the goods, classification, as well as undervaluation, the Bill of Entry was taken up for re-assessment before clearance. Detailed investigations were conducted by SIIB of Customs. The goods were examined, mahazars were drawn. On examination, the goods were found to be only 'glass pendant' having markings 'Made in Germany', thereby showing the country of origin as Germany, whereas the goods imported and declared by the appellant were that of Malaysian origin. On further examination and as per the product literature found inside the package described the item as "an advanced, mineral based pendant made from high temperature nano-engineered glass". The name "Amezcua" relates to a brand. Subsequently, the goods were seized on 11.1.2013. After seizure, provisional release of goods was ordered on execution of bond of Rs. 15,42,86,221/- and cash deposit of Rs. 3.16 crores + Bank Guarantee for 50% of the differential duty i.e Rs. 1.58crores towards fine and penalty. However, appellants have not availed provisional release of the goods. After completing the investigation, show cause notice dt. 14.11.2015 was issue....
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....s the total duty liability in respect of the Bill of entry no 8746111 dated 12/12/2012. vi) The goods namely Amezcua chi Pendant 1 imported vide Bill of entry no. 8746111 dated 12/12/2012 with a re-determined value of Rs. 15,42,86,221/- should not be confiscated under section 111(m) of the Customs Act, 1962, for the above reasons of misdeclaration of declaration, misdeclaration of country of origin, misdeclaration of classification, misdeclaration of existence of relationship and misdeclaration of true transaction value for the purposes of assessment of the imported goods under section 14 read with section 17 of the Customs Act, 1962. vii) Penalty should not be imposed on M/sTransview Enterprise India Pvt.Ltd., M/s Vihaan Direct Selling India Pvt Ltd., Bangalore, under section I12(a) read with section 114AA of the Customs Act,1962, for rendering the goods liable for confiscation. viii) Penalty should not be imposed on Mr. Suresh Thimiri, the CEO, Director of the importing company under Section 112 (a) and Section 114AA of the Customs Act, 1962 for use rendering the good imported vide the said Bill of Entry no 8746111 dated 12/12/2012 ix) Penalty ....
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....many. 4.1. On the classification issue, he submits that Artificial Jewellery is rightly classifiable under Chapter 71 and the product is ready to wear artificial jewellery. He drew our attention to Chapter Note 9 and Chapter Note 11 of Chapter 71 annexed at page 62 in the additional typed set. He explained the product with literature that "Amezcua Chi Pendant" is an advanced, mineral-based pendant made from high-temperature nano-engineered glass that has a positive energy field. The product is fitted in a stainless steel bezel with a string/thread to wear. He submits that it should be worn as per the guidelines given in the literature. He further submits that the product is not sold in retail sale but it is only marketed through internet by way of multi-level marketing. He therefore submitted that the goods are rightly classifiable under heading "Imitation Jewellery" under Heading 71179090. He further submits that the goods cannot be classified under Chapter 70. He drew our attention to Chapter Note 1 (b) of Chapter 70 where this chapter 70 does not cover Articles of Chapter 71 viz. "Imitation jewellery" and submits that chapter heading 7018 covers only "Glass beads, imitation p....
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....on itself the department insisted for copy of PLPF for pendants and they informed that PLPF for "Amezcua Chi Pendant" was not available with them as this product was launched in the year 2007 in markets outside India and it was launched in India only in 2012 and hence no PLPF was created for the same as PLPF is created during the launch of a new product. PLPF only indicates how the price is to be adopted after importation in India, till it reaches the customer and he relied page 365 wherein copy of PLPF for "Quaranos watch" is available and explained that the product watch is sold on the retail price and the commission has been worked out taking into account of the landed cost. He further submits that even by taking note of this PLPF for watches, the department have not questioned the landed cost which is not under dispute. Since PLPF is not available for the impugned goods, they have prepared a worksheet of PLPF which is annexed at page 373 of the paper book and the same was submitted to the adjudicating authority during investigation. Taking into account the purchase price, the selling price has been arrived and the same has not been considered by the adjudicating authority....
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....td. 2008 (224) ELT 23 (SC) (3) CC New Delhi Vs Polyglass Acrylic Mfg. Co. Ltd. 2014 (301) ELT 545 (Tri.-Del.) He submits that Tribunal cannot go beyond the scope of SCN. In this regard, he relied on Reckitt & Colman of India Ltd. Vs CCE 1996 (88) ELT 641 (SC). Ld. Advocate also submitted that they have imported through other ports and there is no relationship issue raised by the department nor has any dispute arisen. Appellants have paid only for the pendants and no other excess payments were made. 5. On the other hand, Ld. A.R appearing for Revenue, reiterated the findings of OIO. Regarding classification, he referred to para33 onwards of the OIO and on valuation, he referred to para34.3 and also the worksheet annexed to the SCN. He submits that appellant imported the same product cleared to Air Cargo Customs as Pharmaceutical product classifiable under 38220090. He submits that as per the copies of agreement, the supplier and the importer is related. Therefore, the invoice price is not the normal transaction value. He further submits that Bill of Entry was filed along with declaration. They have not only misdeclared to the department, the country of origin, b....
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....or other medals and insignia); and (b) articles of personal use of a kind normally carried in the pocket, in the handbag or on the person (for example, cigar or cigarette cases, snuff boxes, cachou or pill boxes, powder boxes, chain purses or prayer beads). These articles maybe combined or set for example, with natural or cultured pearls, precious or semi-precious stones synthetic or reconstructed precious or semi-precious stones, tortoise shell, mother-of-pearl, ivory, natural or reconstituted amber, jet or coral. ... ... ... 11. For the purposes of heading 7117, the expression "imitation jewellery" means articles of jewellery within the meaning of paragraph (a) of Note 9 above (but not including buttons or other articles of heading 9606, or dress-combs, hair-slides or the like, or hairpins, of heading 9615), not incorporating natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed) nor (except as plating or a minor constituents) precious metal or metal clad with precious metal. As seen from the above definition, as per Note 11, the definition of Imitation jewellery means Articles of....
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....ng 70189090 is upheld. 9. We now propose to discuss the valuation issue. The adjudicating authority rejected the transaction value declared and redetermined the value under Rule 9 of CVR. On perusal of the records, we find that the appellant and suppliers are related which is evident from the various agreements with M/s.QNet Ltd. HK discussed at para 31 of the OIO which are reproduced as under :- (i) Master Franchisee agreement dated 12/04/2012 (ii) Product Supply and Distribution Agreement dt. 2.4.2012 (iii) Customer Support Service Agreement dt. 12.4.2012 (iv) Sponsorship Rights Agreement dt. 8.10.2012 (v) Trade Mark Sub-Licence Agreement dt.12.4.2014 with Quest IyonPte. Ltd., Singapore. In view of the franchisee agreement, the appellants have to pay royalty which is fixed as the percentage of the sales turnover of the franchisee i.e. appellant. We find that the adjudicating authority having held that the parties are related persons but not proposed for loading of any royalty on the value of the imported goods. We also find that there is no comparable price of identical or similar goods and also no contemporaneous pri....
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....ides for an opportunity for the importer to demonstrate that the transaction value closely approximates to a test value. A number of factors, therefore, have to be taken into consideration in determining whether one value closely approximates to another value. These factors include the nature of the imported goods, the nature of the industry itself, the difference in values etc. As stated above, Rule 4(3)(a) and Rule 4(3)(b) of the CVR, 1988 provides for different means of establishing the acceptability of a transaction value. In the case of Matsushita Television (supra) the pricing arrangement was not produced before the Department. In our view, the Consideration Clause in such circumstances is of relevance. As stated above, pricing arrangement and TAA are both to be seen by the Department. As stated above, in a given case, if the Consideration Clause indicates that the importer/buyer had adjusted the price of the imported goods in guise of enhanced royalty or if the Department finds that the buyer had misled the Department by such pricing adjustments then the adjudicating authority would be justified in adding the royalty/licence fees payment to the price of the imported goods. T....