TaxTMI 
TaxTMI 
2020 (6) TMI 71
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....he Orders-In-Appeal the appellant filed the present appeals. 2. Shri H K Hirani, Learned Consultant appearing on behalf of the appellant submits that the only ground for rejecting the appeal is that the appellant had given a consent letter dated 25.4.2019, therefore, the appellant cannot be in category of aggrieved person hence could file the appeal as per Section 128 (1) of Customs Act, 1962. He further submits that the letter was given to avoid delay in clearance of the goods as the appellant had no option except to agree with the department in order to speedy clearance of the goods. However, since the assessment order of Bill of Entry is challengeable by way of appeal and the appellant have right to appeal under the statute, It cannot be said that the appellant is not aggrieved person. As regard enhancement of the value, the value was enhanced not on the basis of any contemporaneous imported data but only on the basis of Directorate General of Valuation Mumbai's guideline issued under F.No.. VAL/Tech/10/2018(Al Scrap) dated 15.11.2018. According to which the price was to be arrived at by taking LME price of Aluminium Prime Metal and minus discount at the rate specified in the....
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....eived from the Consulate General of India, USA, three e-mails retrieved from the laptop of Shri Tarun Jhingon and the correspondence between the officials of US Zinc concerning the valuation of goods. Also the test report of goods found at factory whose samples were tested by the Chemical Examiner, Central Excise & Customs Laboratory, Vadodara has been relied upon wherein the examiner reported that the goods are other than zinc ash. Against these emails and documents and the report of chemical examiner, we find that the goods on their importation were sent to laboratory for testing to the Chemical Examiner at the Nhava Sheva Port. From the test report annexed to the Appeal, we find that the Chemical Examiner reported that the goods are zinc ash. Such test reports has not been disputed. Contrary to the same we find that the revenue has relied upon the test report of samples drawn from the Appellant's factory. The Chemical Examiner in his report has reported that the goods are other than Zinc Ash. However it is nowhere appearing that the goods are skimmings. The Appellant had requested cross examination of chemical examiner which was also not allowed. In our view when the goods on im....
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....r No. 14/2005 dt. 16.12.2005 issued by the Director General of Valuation. The show cause notice has relied upon the statements of the Partners of M/s SMRI and indentors to allege undervaluation. The show cause notice has proposed demand by rejecting declared value. Even though the show cause notice states that wherever the contemporaneous values were found the same has been applied by re-determining the value under Rule 6 and in rest of the cases Rule 8 has been applied, but we find that all demands have been made by applying LME prices and nowhere such contemporaneous values has been cited in show cause notice. The demands have thus been made by adopting the LME prices of Virgin metal and applying discounts inspite of the fact that the Apepllant had produced details of contemporaneous imports. The adjudicating authority if was to redetermine the value, he should have sequentially applied Rule 5 and 6 of the Customs Valuation Rules i.e Transaction value of similar goods or determination under rule 6 by determining under provisions of Rule 7. The Appellant in their reply to show cause notice had provided list of contemporaneous import of identical goods at the same price and we have....
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....d 03.07.2012 accepting the transaction value. It was also held that value cannot be re-determined under Rule 8 on the basis of LME minus discount band. Such orders stands accepted by the revenue. In such case we do not find any reason to reject the declared value. We also find that the issue of determining the value by adopting the price of virgin metal and applying discount bands has been rejected in catena of judgments. In case of Bharathi Rubber Lining & Allied Services P. Ltd. 2013 (287) ELT 124, the tribunal held as under : 5.4 The lower appellate authority has rejected the reliance place on the DGOV Circular on the ground that in terms of the Hon'ble Apex Court judgment in the case of Varsha Plastics (cited supra), the assessment under the provisions of Customs Valuation Rules cannot be given a go-by and the Valuation Rules will prevail over the departmental instructions on the subject matter. The Hon'ble Apex Court in the said case held as follows : "The valuation of the imported goods where the transaction value in the opinion of Assessing Authority is liable to be rejected because of invoice manipulation or under-invoicing or un-realistic price or misdecl....
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...."Honey" and Birth/Cliff" respectively. The Bills of Entry were assessed at the declared invoice value, viz., CIF US $ 1100 and US $ 1300 PMT respectively. After inspection, the goods were cleared on payment of customs duty assessed. 3. Subsequently, on the basis of the information received from the London Metal Exchange, (for short, "the LME") to the effect that the price of the said metals in the LME as on the date of import was more than the price declared by the respondent, an additional duty amounting to Rs. 90,248/- and 1,94,035/- respectively was demanded from the assessee on the said two Bills of Entry. The additional demand having been confirmed by the Deputy Commissioner of Customs, the assessee preferred appeal to the Commissioner (Appeals) but without any success. 4. Aggrieved, the assessee carried the matter in further appeal to the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi, (for short "the Tribunal") as it then existed. By the impugned order, the Tribunal has allowed the appeal and quashed the additional amount of duty demanded from the respondent. While accepting the plea of the assessee that they were not confronted with any c....
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....ere is no basis for holding that refining charges for refining scrap and conversion of the same to copper bar/rod will be US$ 150 per MT. As per Rule 4(2)(b) of the Valuation Rules transaction value of the imported goods shall be accepted provided that (a)- - - - (b) the sale does not involve any abnormal discount or reduction from the ordinary competitive price. It is clause (b) which is highlighted by the Commissioner (Appeals). However, there is no material on record to establish that the suppliers offered any abnormal discount or reduction from the ordinary competitive price for copper scraps which were imported by the appellants. Further, it is brought to our notice that the price declared is only marginally lower than the price as loaded. 3. In the light of the Tribunal's decision in the case of Drunkey Exports (P) Ltd. v. Commissioner of Customs (Port), Kolkata-I- 2004 (165) E.L.T. 417 (Tri.- Kolkata) and Commissioner of Customs, Kandla v. Meera Impex - 2004 (167) E.L.T. 446 (Tri.-Mumbai) holding that LME prices are indicative and cannot be the basis for enhancing the value in the absence of corroborative evidence of contemporaneous imports at higher price, we hold ....
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....ap to be made as per Alert Circular or based upon LME Prices. Even the CBEC Board while accepting the decision of the PushpakAluminium casevide letter F. No. 387/w/9/2013- JC dt. 25th June 2013 F No. 387/W/9/2013-JC dated 25 June, 2013 has clarified as under:- • Recourse to LME prices can't be taken to substantiate the charge of undervaluation when contemporaneous import of almost same prices was available during the material time. It is a settled law that transaction value can't be rejected unless there is contemporaneous evidence to reject the invoice value as being held by the Apex Court in case laws like Commissioner of Customs, New Delhi vs. M/s. Prabhu Dayal Prem Chand reported in 2010 (253) ELT 353 (S.C.), Commissioner of Customs, Kolkata vs. M/s. South India Television (P) Ltd. reported in 2007 (214) ELT 3 (S.C.), Commissioner of Customs, Mumbai vs. H.D. Orgochem Ltd. reported in 2008 (226) ELT 9 (S.C.). • The case laws relied upon by the Department will not help our causebecause these decisions were applicable in respect of prime metals only and not w.r.t. scrap except in the case of Varsha Plastics. In Varsha Plastic also, the Hon'ble Su....
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....representing suppliers. In absence of same the allegation of undervaluation cannot be supported. 10. The Adjudicating authority in order to justify the LME based valuation has relied upon the statement of Shri Sushil Agarwal, Partner of M/s SMRI and indentors. The Appellant has objected to reliance on such statements that the statement dt. 29.05.2006 and 23.04.2007 of Shri Sushil Agarwal are contradictory as different pricing method was stated by him which are not applicable in the facts of the case. That the cross examination of Shri Sushil Agarwal was also not allowed. Further that even though the cross examination of indentors were allowed but they did not appear for the cross examination. The Appellant has pleaded that in such circumstances, the statement of Shri Sushil Agarwal and indentors cannot be relied upon. We find that the adjudicating authority ought to have allowed cross examination of Shri Sushil Agarwal as the same was necessarily required in view of his statements dated 29.5.2006 and 23.04.2007 which were contradictory in respect of value of imported goods. In his statement dated 29.5.2006 on being shown an alleged abstract of LME prices of Aluminium Scrap....
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....anchas, who were present during drawal of Panchnama on 26.04.2006 for examination of seized laptop of Shri Tarun Jhingon on the ground that it was not possible to complete the proceedings in 2 hours, as stated in the show cause notice. The cross examination of the officials, who had recorded the statement of Shri Sushil Agarwal on 9.4.2007 was also sought since it was recorded in his statement that he had submitted in tabular form running into 120 pages the particulars of all imports made in 5 years by the Appellant, which are involved in the impugned appeal. The Appellant in their reply had contended that the cross examination of officials was sought as all the import related documents of the Appellant were lying seized with the investigating officers and there was no occasion for Shri Sushil Agarwal to compile such information in absence of any import documents. However except indentors no cross examination of any of the above persons was allowed. The cross examination of Shri Sushil Agarwal was denied by the adjudicating authority on the ground that no new facts are likely to come out at such examination and cross-examination. This reasoning of the adjudicating authority is high....
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....suppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3-2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice. 9. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." 11. Similarly, in case of Vasudev Garg - 2013 (294) ELT 353 (Dl), it was held that it was mandatory to give cross examination. It was held that the statement against the assessee cannot be used without giving them opportunity of cross examining the witness as it is valuable right of accused/ noticee in quasi judicial proceedin....
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....mination of panch witness who had witnessed such proceedings. However the same was not allowed. In absence of authenticity of such document and refusal of cross examination we find that the charges of undervaluation are not sustainable. 12. Coming to the issue raised by the Appellants that no additional duty of Customs is payable in respect of Zinc Ash, skimmings and scrap as these are not manufactured product, we observe that adjudicating authority has denied relief to Appellant on ground that they have not produced evidence to show that goods are not manufactured products. We find from the definition of various scrap imported as per ISRI and the photographs annexed to appeal papers that it clearly shows that the scrap was not arising as a result of process of manufacture. The ratio of law on such scarp being non excisable is absolutely settled by the judgments and Circulars viz. Hindalco Industries Ltd. 2015 (315) ELT 10 (Bom), Circular No. 904/24/2009 - CX dated 28.10.2009, Circular No. 1027/15/2016-CX dated 25.04.2016, Slugs India Ltd Vs. CCE - 202 (278) ELT 611, CC vs Tata Iron & Steel Co. Ltd - 2004 (165) ELT 386 (SC), Bhushan Steel Ltd vs CCE - 2012 (284) ELT 713, S....
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.... in case of demand made in other annexures. We have elaborately discussed the grounds for non sustainability of demand and the same ratio would apply in respect of seized goods also. Also since the charges of undervaluation of declared price is not sustainable, hence the confiscation of goods is also not sustainable. 16. In view of our above observations and findings, we are of the view that the demands confirmed against M/s SMRI, confiscation of goods and penalties imposed upon M/s SMRI is not sustainable. For the same reason the penalty imposed upon co-appellants namely Shri Sushil Kumar Agarwal, Shri Surendra P. Kachhara and Shri Sanjeev Kumar Agarwal is also not sustainable. We thus set aside the impugned order and allow all the appeals before us with consequential reliefs to the Appellants. 4.2 In view of the above order it can be seen that the issue of method of enhancement of the valuation is as per the DGOV Circular which has been rejected by this tribunal. The present case is not different from the case on which the above order was passed. The only difference is the period. These imports were made subsequent to the imports made in earlier order dated 01.10.2019....