TaxTMI 
TaxTMI 
2016 (11) TMI 137
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....ant extending the benefit of exemption Notification No. 21/2002-Cus DATED 1/3/2002. The Tug was classified under CTH 89040000 The DRI has investigated the case on the basis of statements of various persons such as Shri. Mohan Samant, Managing Director of the appellant company, Shri. Laxminarayan Iyer, President (Commercial), Shri. Karunakar Venkat Poojary, General Manager of M/s. GAC Shipping (I) Pvt Ltd Mumbai were recorded. In the investigation it was revealed that the value of USD 5258397.64(CIF) declared is CIF Mumbai. In the investigation it was found that the delivery of the Tug was China and Tug was self propelled from China to Singapore. However in the declared value, insurance freight and other expenses born for voyage of the Tug from China to Singapore was not included in the declared value. A show cause notice was issued wherein the Revenue applying the rule 10(2(a)(i) of Customs Valuation (determination of price of imported goods)Rules, 2007 proposed loading of 20% of FOB value on account of cost of transport and also insurance premium shown in the Marine Hull pol....
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....and other expenses pertaining to the transport of Tug from China to Singapore was submitted alongwith all the relevant and supporting invoice. The adjudicating authority has discarded on the flimsy reasons. He submits that the issue involved in the present case is only minor variations of valuation which is not with intention to evade custom duty but the mistake is occurred inadvertently on the part of the appellant this has been accepted by the appellant's representative in their statements recorded under Section 108. Moreover show cause notice was issued within one year period from the date of bill of entry. Therefore the show cause notice is covered under Section 28(a)(i) and there is no case of collusion, willful misstatement or suppression of facts. In such case the penalty imposed on the appellant company as well as director and employee of the appellant company are not sustainable. He further submits that appellant has calculated and presented before the adjudicating authority the differential duty of Rs. 12 lacs approximately for wh....
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....ingapore to Mumbai. The insurance freight and other expenses for the transportation of Tug from port of delivery that is China to Singapore was not added in the value. On pointing out by the department, the appellant admitted mistake and deposited lump sum amount of Rs. 20 lacs however during the adjudication, the appellant have given the actual details of the expenses the same is reproduced below: Particulars of Expenses Amount in USD(1 USD =INR 45.65) Amount in INR (Actuals) Invoice No. 1-Repatriation of crew 44,375.00 20,25,719.00 Invoice No. 2 Medical Expenses Dr. Jayant Rele 78.86 3,600.00 Invoice No. 3. Manning Cost 66,244.99 30,24,084.00 Invoice No. 4- Invoice for Vicualling/Provissions from Avalontec for SGD 1143.68 (Actual SGD 1143.68 converted to USD@ 1 USD= 1.206SGD) 948.48 43,298.00 Invoice No. 5 colly: Poet Shipbuilding & Engineers Pte Ltd RMB42236 Poet Shipbuilding & Engineers Pte RMB 17400 (actual RMB 59.636 converted to USD @ 1USD -6.25 RMB) Poet Shipbuilding & Engineers Pte USD 113475.60 Poet Shipbuilding & Engineers Pte....
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....d that merely because the invoice in respect of fuel etc. issued subsequently. The genuineness of the invoices cannot be disputed particularly when the Adjudicating authority did not find that invoice are invalid. When the invoices were accounted for by the appellant and the consideration there against were admittedly paid, only because invoice were issued subsequently the same cannot be disputed. On the basis of actual expenses shown by the appellant the actual cost of transportation stands established therefore 20% as provided under proviso (i) of Rule 10(2)(a) of Customs Valuation Rules, 2007 cannot be applied. As regard insurance the Adjudicating authority straight way picked up premium amount mentioned in the Hull Marine Policy and added in the value, whereas appellant has shown on the basis of the documentary evidence of insurance company M/s. HDFC Ergo, General Insurance that the total premium of Rs, 2,63,962/- was paid in respect of Tug, however Ld. Adjudicating authority added entire premium of Rs. 8,5....