TaxTMI 
TaxTMI 
2018 (3) TMI 766
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....ited has two units in Jaipur. Unit-I is a 100% EOU engaged in the manufacture of Halogen Bulbs as well as Halogen Capsules. In addition to export, a part of the Halogen Capsules manufactured by Unit-I were cleared to Unit-II for further manufacture of Halogen Lamps, for the domestic market. Investigations were undertaken against Unit-I as well as Unit-II by paying a surprise visit to the said units and recovery of documents including private note book "MONARK". After conclusion of investigation, the Department issued show cause notice dated 07.09.2005 covering the period August, 2004 to July, 2005 in which the following allegations were raised. (i) Unit-I had suppressed the assessable value of goods cleared in DTA to Unit-II (relat....
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....ant unit is not correct and the same has to be set aside and the matter has to be remanded to the Commissioner for denovo adjudication after considering the appellant's plea that during the period of dispute, other importers had imported similar goods in comparable quantities at the prices which were comparable with the DTA prices adopted by them and if this is so, there would be no justification for rejecting the DTA sale price on which the duty had been paid by the appellant. 8. As regards the duty demand of Rs. 14,46,613/- against the unit-I based on the allegation of clandestine removal, this demand is based on entries in the diary recovered from the store keeper, Sh. Satyanarayan, of the DTA unit. The grievance of the appellan....
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.... the Halogen Capsules were worked out on reverse calculation basis in terms of Rule 7(3) of the Customs Valuation Rules. He argued that Rule 7 has no application in the present case as Unit-II is not manufacturing Halogen Capsules. He further submitted that the price of contemporaneous import of Halogen Capsules in comparable quantity is available, which is comparable with the DTA sale price adopted by the appellant. (ii) Ld. Counsel referred to CBEC Circular F. No. 268/85-CX. Dated 29.09.94 wherein it was clarified that while determining the value of goods for clearance to DTA, where invoice price of such goods under assessment is more or less corresponding to the FOB value of exports in the case of goods of identical nature and i....
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....nce for the correct value of the goods cleared from Unit-I to Unit-II. With reference to the charge of clandestine clearance, he specifically referred to paragraph 49-50 of the impugned order and submitted that Shri Kailash Kumar Sharma, Manager Commercial & Authorised Signatory of Unit-II in his statement has admitted the receipt of goods shown in the chart without cover of invoice. The statement also stands endorsed by Sh. Gopal Mathur, General Manager of Unit-I. Finally, he submitted that the impugned order may be upheld. 7. We have heard both the sides very carefully and perused the record. 8. The crux of the case is on two allegations: (i) The goods cleared by Unit-I (100% EOU) to Unit-II (DTA) were undervalued. ....
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....re related persons, the same would not ipso facto be the ground for rejecting the transaction value. Rule 3(3)(a) of the Customs Valuation Rules, 2007 specifically provides that where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. The Department has compared the assessable value with the price at which certain types of Halogen Capsules has been imported by the appellant and found that the clearance from Unit-I to Unit-II were undervalued. But the appellant has strongly contended that the cited import were only for import of samples and the consignment was only for 200 to ....
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.... the departmental officers, a note book "MONARK' was recovered from Unit-II. This private record indicated receipt of Halogen Bulbs and Halogen Capsules from Unit-I. The author of the private note book was Sh. Satyanarayanan, Store Keeper. We do not find any statement recorded from him on record but the departmental officers has recorded the statement of Sh. Kailash Kumar Sharma of Unit-II on 18.08.2005 in which he admitted that the said diary contained the receipt of Halogen Capsules and Halogen Bulbs received from Unit-I. Some of the entries found in the note book did not have corresponding invoices and evidence of payment of duty. Sh. Gopal Mathur, General Manager of Unit-I also endorsed the statement of Sh. K. K. Sharma. On the basis of....