TaxTMI 
TaxTMI 
2020 (4) TMI 108
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.... of the Directorate of Revenue Intelligence, Delhi Zonal Unit (hereinafter referred to as DRI) conducted searches at the office/ business premises of Shri Satish Luthra, MD of M/S Ramakrishna Electro Components Pvt. Ltd., (RECPL in short) and some of the other importers, namely, M/s Communication Trade Links, M/s Unique Trade Links, M/s Radhe International, M/s Oberoi Import Export, M/s Sanjay Enterprises, M/s Universal Electronics, M/s Simran Exports and M/s Shiv Enterprises; Statements of various persons of RECPL and other importers were recorded by the officials of DRI. DRI issued Show Cause Notice, F. No. DRI/23/14/2005/DZU-Pt/1334 to 1353 dated 31.3.2006, to various importers and persons, alleging that the importers have undervalued their imports; Shri Satish Luthraimported in the name of other companies and arranged to pay the differential amounts to foreign buyers through Hawala. The SCN sought to redetermine the value of imported goods and to impose penalties on various persons individually and severally. 2. The show cause notice has been adjudicated upon by Commissioner of Customs (Import), Air Cargo Complex, Sahar Mumbai-400099 vide Order in-Original No. CC/MJ/14/2010/....
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....s the first three appellants respondents, Learned Commissioner of Customs, vide the impugned Order had rejected the assessable values declared underRule 10/ 10A of CVR, 1988; redetermined the assessable values under Rule 5 of the CVR, 1988 read with Section 14; confiscated seized goods under Section 111 (m) and 119; has given an option to redeem the goods on payment of fine of Rs. 20 Lakhs; confirmed differential duty under Section 28 (2), along with the interest under Section 28AB; appropriated the amounts deposited by the appellants/respondents and imposed Penalties under Section 114A and 112(a) of the Customs Act,1962. However, fine of Rs. 20 Lakhs imposed was not quantified relating to any Bills of Entry or to any of the Importers. 3.2.Shri C.M. Sharma further submits that whereas the SCN raised the demand under Section 28 (1) of the Act, impugned order neither raised nor confirmed by invoking proviso clause to the Section 28 (1) of the SCN; while the bills of entry are of February - September, 2004 / October-November, 2004 / July-August, 2003, the SCN is dated 3103-2006; there is no case for attracting extended period of time and proviso clause is not invoked; consequently,....
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.... that when Department has not been able to establish existence of any circumstances as in Rule 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, price mentioned in the invoice is to be accepted as the transaction value; Bills of Entry of the identical goods are not disclosed in the SCN or cited in the impugned order and Rule 2 (c) provisions are not considered; Rejection of transaction value under Rule 3 of CVR is not concluded in the impugned order; Essential ingredient of Rule 5 has not been shown as applicable basis of re-determined values; It is not shown as the test values were "at or about the same time as the goods being valued; Contemporaneous import are not shown to be within a period of 90 days from the respective imports of which values are being re-determined. He relies upon the following. * Vintel Distributors Pvt Ltd Vs CC (Sea), Chennai 2002 (149) ELT 145 (Tri. - Chennai) and 2003 (153) ELT A101 (S.C.) (It was held that goods should be identical and not just similar, corresponding in nature identically in terms of quality, quantity, place of origin and time of origin) * CC, Chennai Vs Forte Garments 2002 (150) ELT 622....
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....tronic components on their own account and have imported various consignments of electronic components vide various Bills of Entry at through various ports; in some consignments, declared value was enhanced by the proper officer; commissioner confirmed the differential duty on branded goods. Learned Advocate submits that Commissioner has erred in travelling beyond the scope of show cause notice; he has relied upon an area of EDP where he is said to have seen the brand names declared by the actual importers; as per impugned order, such area is not visible on the hard copy and can be seen only on the soft copy of EDP; there is no mention of such an area in the show cause notice; Even DRI has not seen anywhere the declaration of such brand names; It is a settled principle of law that orders travelling beyond show cause notice are non-est in view of Commissioner Vs Carborundum Universal Ltd 2007 (211) ELT 105 (Tri. Chennai) and (affirmed by SC 2008 (223) ELT A94 (S.C.)) and Asha Celluloid Vs CCE, Surat - 1998 (98) E.L.T. 769 (T); adjudication authority is not to assume upon itself the role of investigating agency and go on to investigate something which has not been alleged in the SCN;....
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....the eye of law. Therefore, the impugned order is liable to be set aside. All the goods were examined by the proper officers and no discrepancy, least of all about the nature of the goods having been declared without any brands, was ever noticed by any of the examining officers. The goods were unbranded and question of their being now termed as branded does not arise. It is submitted that all the Assessment Orders, passed by Assistant Commissioner on the respective bills of entry, have attained finality because no appeal has been preferred against any such order by department. He relies upon. • Mohan Meakin Ltd Vs CCE, Kochi 2000 (115) E.L.T. 3 (S.C.) • CC (Imports), Mumbai Vs Lord Shiva Overseas- 2005 (181) E.L.T. 213 (Tri - Mumbai) 4.4. Counsel submits that the Appellants completely deny all the charges and categorically state that the Appellants are independent importers; the goods have been bought from the foreign suppliers on principal to principal basis; DRI has wrongly alleged under invoicing by alleging that Mr. Satish Luthra approached the foreign supplier namely, M/s Ascend International Hong Kong and M/s Stride Promotion Pte. Ltd., Singapore; ....
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.... hence not applicable for comparison of goods imported by the present appellants. (v). It is a well laid down principle that transaction value cannot be rejected in absence of specific proof or evidence so as to ensure that the case falls under exclusion clause rule 4(2) of Customs Valuation Rules; no such reason has been alleged in the show cause notice; SCN does not allege as to which sub-clause of the aforesaid Rule has been contravened by the importer; there is no misdeclaration vis-à-vis the alleged import by RECPL. there is no evidence on record regarding the misdeclaration of the goods imported by the appellant; in the absence of higher prices declared for imports of the same kind and quality at about the same time, cannot be enhanced; Price of electronic components depends upon the manufacturer's brand, country of origin, timing of imports, quantity imported and other factors as laid down in Customs Valuation Rules, 1988 inthe absence of any such allegation, the transaction value declared by the appellants must be accepted as held in the following. Reliance is placed on the following case (i). Eicher Tractors Vs CC - 2000 (122) ELT 321 (SC) ....
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....make a comparison; the fact that the impugned goods were unbranded itself will go against the allegation of goods being identical goods to those imported by M/s. RECPL; therefore, no ground exists for rejection of Transaction; declared value must be accepted and no fine and penalty can be imposed in view of Sony Impex Vs CCE & C 2006 (202) ELT 486 (Tri-Kolkata); as the evidence relied upon do not confirm to the "timing of import", cannot be comparable. As regards the Price List, they cannot per say be an evidence as held in (i). Eicher Tractors Vs CC - 2000 (122) ELT 321 (SC) (ii). Mirah Exports Pvt Ltd Vs CC 1998 (98) ELT 3 (SC) (iii). CC Vs Venus Insulation Products Mfg. Co - 2003 (153) ELT A172 (SC) (iv). Aryan Electronics Vs CC, New Delhi-IV 2004 (177) ELT 908 (Tri-Del) (v). Vintel Distributors Pvt Ltd 2002 (149) ELT 145 (Tri-Chennai) (ix). Learned Counsel submits that there is no case for application of extended period of limitation as held in Dr. Reddy's Laboratories Ltd Vs CC Hyderabad 2004 (175) ELT 565 (Tri-Bang); there is no case of confiscation and levy of penalty as there was no suppression as held in Kohli Printogra....
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....all in the show-cause notice, whereby the appellant can be connected with the alleged contravention made by the importers; neither the appellant had made any payment on behalf of any person resident abroad nor he had received any payment from any person on behalf of person resident abroad or in India; statement was retracted by the appellant at the first available opportunity; during the cross-examination conducted on 05.01.2009, Shri Satish Luthra specifically stated that he never met the appellant and has not send any money through the appellant; He relies upon to state that in case of retracted statements the burden is on the department to prove. (i). UOI Vs Balmukund 2009 2 JCC Narcotics 76 (ii). Mohtesham Mohd Ismail Vs Special Director, Enforcement, & another 2008 (1) JCC 240 (iii). Vinod Solanki Vs UOI 2009 (223) ELT 157 SC. 5.1.Learned Counsel submits that Adjudicating Authority framed issues but left them unanswered; he raised the issue as to whether Shri Sushil Goel and Shri Vinod Baid have any role in remitting any differential value of the goods imported but relies solely on the statements given by Shri Satish Luthra on 07.03.2006, which re....
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.... been conferred on the customs authorities to allege that a person is the importer who has not claimed himself to be so. Even assuming that, for the sake of argument, Satish Luthra was the beneficial owner, such an amendment in Section 2 (26) of the Customs Act relating to the definition of "IMPORTER" has been incorporated only in the budget of 2017, i.e., much after the import of goods. 6. 3.Shri Prabhat Kumar also submits that the demand under section 28 can be raised only against importer and relies upon CC (Import), Bombay Vs VXL India Ltd 2006 (193) ELT 396 (Bom) affirmed 2006 (197) ELT A121 (SC); the word "Jointly and severally" has no legal sanctity under the eye of law; the impugned order confirms duty and penalty only against the importers; there is no authority for the same devolving on the appellant; commissioner has not cited any authority; Section 28 (4) of the Customs Act is very categorical about the duty being demanded only against the importer; it was held in following decisions that Customs authorities must make their mind as to who is the noticee for the payment of the alleged short levy of duty. (i). Vision Inc Arun Kumar (ii). Rimjhim Ispat....
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.... M/s SK Trading, under his own proprietorship, to sell goods imported in the name of M/s RECL and others, locally. 8.1. Learned AR submits that Satish Luthra was the mastermind behind the fraud and he was the controlling person of all the nine firms. Documents pertaining to the imports made by all the nine firms impugned firms were recovered from the searched premised of RECPL; scrutiny of revealed that payments to supplier, CHA and transporters were not made through the bank accounts of these firms in most of the cases; most of these firms did not have an office and the residential premise was shown as the address; they did not have any sales tax registration some addresses were bogus. Further evidence is as follows. • The proprietors, of these 9 firms, categorically stated that they were only namesake owners; real owner of the firms was Satish Luthra; they had never contacted foreign supplier, the CHA or the transporter. • Parveen Mahajan, Sales Advisor of RECPL stated, on 31.1.2015, that Satish Luthra used to negotiate with the foreign suppliers viz., M/s ST Micro Electronic (Thompson Group), Singapore, and M/s Phillips Semiconductors, Hong Kong and ....
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.... holders' accounts and also through the Hawala operators; as seen above, this fact is supported by the statements of CHAs, Transporter and Shri Satish Luthra himself; Learned AR submits that admitted facts need not be proved as held in CCE, Madras Vs System & Components Pvt Ltd 2004 (165) ELT 136 (SC) and ACC, Madras -I Vs Govindasamy Ragupathy 1998 (98) ELT 50 (Mad). Relying on following cases, Shri Satish Luthra can be held as the importer and duty demand can be fastened on him. (i). CC (Import), Mumbai Vs Pundrick Ravindra Trivedi 2015 (322) ELT 812 (SC) (ii). Sushil Agarwal Vs CC (Import), Mumbai 2013 (283) ELT 377 (Tri-Mumbai) affirmed by Hon'ble High Court 2012 (293) ELT 633(Bom) (iii). Shri Ganesh Overseas Vs CC, Ahmedabad 2002(150) ELT 145 (Tri-Del). 8.3.Learned AR submits on the argument /claim of Retraction, of statement of Shri Satish Luthra, that the counsel for Satish Luthra could not produce any copy of retraction; all the statements, recorded at various intervals, are written by himself in Hindi; such statements running into pages cannot be written under any force or threat. It was held that retraction should be addressed to the authorit....
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....his fact unnoticed while dropping the demand. Learned AR submits that although Assessing officers were cross examined, questions were posed only with reference to one or two bills of entry, as against 171 consignments involved; cross examination had taken place after a gap of 4 to 5 years; it is very difficult for anyone to remember exactly what was presented to them.Adjudicating authority erred in holding that these are unbranded goods; Satish Luthra had himself admitted the duty liability; duty chart prepared on the basis of Price list and contemporary imports. Adjudicating Authority cannot drop an admitted liability; as the bills of entries show the brand code in the description, there is no doubt that these are branded goods and therefore the whole of demand is sustainable. Learned AR submits that valuation was correctly arrived after rejecting the declared price on the basis of contemporaneous Import (Para 24, 25 and 26); price lists available corroborated the correctness of the value of the imported ICs and Transistors, as declared by RECPL; actual prices were declared on goods imported in the name of RECPL but under-invoiced when imported in the name of 9 dummy firms; this f....
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....t of appeal No. C/919/2010 (RespondentShri Satish Luthra, CEO), learned AR submits that the Adjudicating Authority erred in not imposing penalty under Section 114A equal to duty and interest; which requires to be rectified. 9. Heard both sides and perused the records of the case. Brief issues that require consideration in these set of appeals are as to whether (i). Shri Satish Luthra can be held to be the importer in respect of various imports for which the bills of entry have been filed in various names and thus, whether Shri Satish Luthra is liable to pay duty, interest penalty etc in respect of the impugned imports? (ii). whether department could establish the charge of under valuation in respect of the impugned imports and if so whether the redetermination of value was correctly made? (iii). whether the appellants, S/Shri Sushil Goel, Vijay Chand Baid, Kanchan Kumar Kora (M/s Radhe International), Jagveer Singh (Universal Electronics), Vinod Kumar Sharma(Air Sea Trade Links), Narendra Singh,KimtiLal (M/s Communication Trade Links) and D.K. Chopra (M/s Shiv Enterprises) are liable to pay penalty? (iv). whether the respondent, Shri Harish Lu....
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.... independent VAT and Income Tax returns; availability of all the proprietors should dispel the doubt and settle the matter at rest that they are independent importers; each unit has been held to be in existence since duty demands are confirmed only against such individual importers; just because appellant's brother supplied goods to independent importers through his company, no charge can be made against the appellant. 12.we find that it will be beneficial to have a look at the definition of the word "importer" Section 2 (26) of the Customs Act defines importer as follows: "Importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes an owner or any person holding himself out to be the importer". A bare reading of the definition implies that the term "importer" includes any person holding himself out to be the importer. However, it is important to note that such a person holding himself out to be the importer would be considered an importer any time between the importation of the goods and the clearance of the same for home consumption. In the instant case, it is not in dispute that the en....
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....ods to the goods imported under the impugned bills of Entry or producing any other documentary evidence to prove that. Though the Learned Commissioner finds as above goes on to make a case against the appellants on the point that some of the Bills of Entry have an indication that the goods are branded and that indication is normally not visible on the printout of the Bills of Entry. The Learned Counsel for the appellants has submitted that the Learned Commissioner has set out a new ground which was not discussed in the SCN. Thus, he has travelled beyond the scope of the SCN. Learned Counsel also submits that it is also a settled principle of law that orders travelling beyond show cause notice are non-est in view of Commissioner Vs Carborundum Universal Ltd(supra) and Asha Celluloid Vs CCE, Surat(supra); adjudication authority is not to assume upon itself the role of investigating agency and go on to investigate something which has not been alleged in the SCN; Learned Commissioner should have shown soft copy of EDP to the appellants also. Not showing the relied upon area in the EDP to the appellant tantamount to denial of natural justice and non-supply of relied upon documents. 1....
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.... 321 (SC) wherein the Apex Court has laid down that 'it is only when 'the' transaction value is rejected, then under Rule 3(ii) the value shall be determined by proceeding subsequently through Rules 5 to 8 - Conversely, if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules." We find that the impugned order does not record any reasons for rejection of the declared value. Impugned order on the on hand rejects the adoption of value of identical goods imported by M/s RECPL and on the other relies on the price lists of the manufacturing company where as the goods are imported by traders. Learned counsel for the appellants allege that provisions of Rules are not followed and bills of Entry of the identical goods are not disclosed in the SCN or cited in the impugned order; rejection of transaction value under Rule 3 of CVR is not substantiated; it was not even displayed that essential ingredients of Rule 5, as to test values were at or about the same time as the goods being valued, are not complied; it is also not made known whether the contemporaneous ....
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.....) and in CC (Imports), Mumbai Vs Lord Shiva Overseas- 2005 (181) E.L.T. 213 (Tri - Mumbai) 17. Though in the operative portion of the order learned commissioner has observed that the declared value is redetermined under Rule 5 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, no reference to any bill of entry is given and it is not established as to how the referral goods are identical to the impugned goods, in terms of quality, quantity, place of origin and time of origin as held in Vintel Distributors Pvt Ltd Vs CC (Sea), Chennai 2002 (149) ELT 145 (Tri - Chennai) upheld by Supreme Court 2003 (153) ELT A101 (S.C.) 18. We find that learned counsel for the appellants submits that whereas the SCN raised the demand under Section 28 (1) of the Act, impugned order neither raised nor confirmed by invoking proviso to the Section 28 (1) of the SCN. We find that while the bills of entry pertain to the period July-August, 2003; February - September, 2004 and October November, 2004, the SCN is dated 31-03-2006. We find that proviso for extending the limitation for demanding duty has not been invoked in the how Cause Notice and there is no mention as regards ....