TaxTMI 
TaxTMI 
2019 (8) TMI 1518
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....toms, Excise & Service Tax Appellate Tribunal (CESTAT, for short), East Regional Bench, Kolkata in MA Em Nos. 75388-75395 of 2018 and Customs Appeal Nos. 75687- 75694 of 2018. The relevant portion of the order is reproduced as under : "Suffice it to observe that the impugned judgment, in our opinion, is very sketchy and cryptic. It does not deal with every aspect that ought to be gone into in deciding the statutory appeal both on facts and on law. We refrain from examining the contentions available to the parties on merits and instead relegate the parties before the Appellate Authority for reconsideration of the appeal afresh on its own merits and in accordance with law. The impugned judgment and order is set aside. The parties are relegated before the Appellate Authority for the reconsideration of the appeal afresh." Accordingly, the matters were taken up together as the issue involved in these cases arises out of common investigation pertaining to import of slack wax and residue wax, during the period 2008 to 2012 by various importers, namely: (i) Shree Hari Wax-O-Cam Pvt. Ltd.; (ii) Shiv Chemicals Industries; (iii) Deep Jyoti Wax T....
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....imports of Slack Wax and Residue Wax through Kolkata/Haldia port by certain importers. Consequently, premises of some importers and Custom House Agents (CHAs) were searched simultaneously on 02.02.2012 at various locations in Kolkata including the office premises of M/s. Chowdhary Udyog (Importer Exporter Code- 0291002145), located at (i) 23A, N.S Road, 1st floor, Room No.26, Kolkata- 700 001, (ii) 40B, Ground floor, Hindustan Park, Kolkata-700 029. Some documents were recovered from the said premises and seized under reasonable belief of those being useful in the investigation. Among the aforesaid recoveries from M/s. Chowdhary Udyog, the ones worth special mention were : • A Sales Contract No. SC035-SPO-2011 dated August 5, 2011 between the seller M/s. PT. KIMIA YASA, Indonesia and the buyer M/s. Magna Dealers (P) Ltd., Kolkata (India) for supply of 82.5 MTS of SLACK WAX SPO GRADE (Pertamina Origin) at the Unit Price of USD 1180/MT in CNF Calcutta-terms. • Another incriminating material, showing higher value, recovered from the spot was a series of e-mail communications from 3 Dec., 2011 to 23 Dec. 2011 between Mr. Pawan Kumar Chowdhary, Partner in M/s. ....
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....Wax of Iran/UAE origin to India are : M/s. Global Future Expander Corp. (GFEC), M/s. Harmony Impex, M/s. Remel International FZE, M/s. Asia Crown General Trading Co., M/s. Lubritech Trading FZE, M/s. Behran Oil Co., M/s. Grand Dignity Industrial Co. Ltd., M/s. Yazd Foundation Trading F.Z.E., M/s. Rine Universe Trading Co. LLC, M/s. Bastan General Trading Co. (L.L.C.), M/s. Pars Oil Co., M/s. Sepahan Shimi Tejarat Co., M/s. Rich Venture LLC, M/s. Fajr Tabandeh, M/s. Sun Impex FZE,M/s Jemasco Utama Pt, M/s PT. Kimia Yasa etc., from many of which subject importer M/s. Chowdhary Udyog have imported Slack Wax/Residue Wax. The account statements in respect of supplies coming from M/s. GFEC, Iran and Harmony Impex, UAE, as detailed in the forthcoming paras, is said to reveal the modus operandi adopted by these suppliers, whereby part of the transaction value was received in advance and remaining part of it was reflected in the Invoices raised by them for receipt of that amount through bank. 5. Account statement- During investigation by the DRI, Tuticorin, it was found that one person namely Shri Ramdeb Purba has been in overall charge of import and sale of Waxes in respect of the....
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....ce, Sivakasi. Date of remittance and the amount remitted in foreign exchange against the imported goods was found to be tallying with the foreign currency receipt for the Invoice(d) amount as shown in the Account statement sent by Shri Massoud Moussighi by e-mail to Shri Purba. But the difference in the actual (shipped) price and the Invoice(d) value of the Slack Wax was not explained anywhere. 8. Proforma Invoice - The seized print-outs of e-mails downloaded on 30.09.2011 included correspondences of the Tuticorin-importer with one, Mr. Massoud Moussighi of M/s Global Future Expander Corp, Iran (M/s GFEC, for short), who had sent 3 Proforma Invoices. Contents of the said 3 Proforma Invoices are tabulated below: TABLE-1 S.No No. & Date Description Quantity (MT) Unit Price USD/MT (C&F) Invoice (USD) Port of Loading 1 083102009 & 31.08.2009 Slack Wax 43 735 31605 Bandar Abbas, Iran 2 08312009-1 & 31.08.2009 Residue Wax 72 520 37440 3 10242010 & 24.01.2010 58 535 31030 9. Scrutiny of the import documents pertaining to M/s AI revealed that the above mentioned 3 Proforma Invoices received from....
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....igation by DRI-TTN also revealed that the suppliers of Residue Wax and Slack Wax to M/s AI and M/s SAI, viz., M/s GFEC and M/s Harmony Impex FZE, had supplied goods of same description to M/s. Savo Polymers & Petro Products (P) Ltd (for short M/s SPPPL) who had imported Slack and Residue Wax through Cochin Port. Details of the imports made by M/s SPPPL are tabulated and furnished below: TABLE-2 Sl.No. Bill of Entry & Date Description Qty. (MT) Price (USD/ MT) (CF) Supplier 1 272322 23.06.2010 Slack Wax 13.18 740 Remel Inter-national, UAE 2 272641 29.06.2010 Light Slack Wax 17.15 750 Global Future Expander Corp.(GFEC) 3 272642 29.06.2010 Heavy Slack Wax 33.79 730 4 3192733 04.12.2011 Abadan Slack Wax 17.41 920 Harmony Impex FZE Iranol Slack Wax 35.03 950 5 4778991 28.09.2011 Residue Wax 17.02 870 Abadan heavy Slack Wax 17.02 1020 Iranol light Slack Wax 34.044 1040 12. On comparison of price declared by M/s SPPPL with that of Account statement sent by Shri Massoud Moussighi of M/....
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....foresaid account statement of Massoud Moussighi, received by Shri Purba in e-mail, Shri Purba admitted that the Invoice numbers given in the said Account statement were the actual Invoices against which he had imported Slack Wax, and Residue Wax and other materials in quantities mentioned in the Account statement. Importation of Slack/Residue Wax of Indonesia origin 14. From the import data, it can be made out that the major suppliers of Slack Wax of Indonesia origin to India are : M/s. Jemasco Utama PT (the most regular and perhaps the largest of all the Indonesian slack wax suppliers to India in terms of volume), M/s. Pawa Brothers Trading Pte Ltd, M/s. M.K. Synergy SDN. BHD., M/s. Pt. Pertamina (Persero)- a trade wing of Pertamina refinery of Indonesia, M/s. Grand Dignity Industrial Co. Ltd., M/s. Niku Exim International Pte Ltd., M/s. Straits Petrochemix Pte Ltd, M/s. Beitjik Djojo, M/s. Pt. Laban Raya Cakrawala, M/s. Pt. Kimia Yasa Chemical Trading, M/s Pt. Jemas Co Utama etc. from few of which subject importer M/s. Chowdhary Udyog have imported Slack Wax. 15. Similar mechanism of under-invoicing appeared to have been adopted for import of Slack Wax ....
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....a International, reflected that an advice was made by Shri Sandeep Gupta under endorsement dated 6th Dec. 2007 to the importer (M/s. Barasat Wax Refiner ) to execute TT Transfer of USD 12000 (@USD 300 PMT for 40 MT, the contracted quantity) - "BANK DETAILS GIVEN. PLEASE DO THE NEEDFUL BY TODAY OR TOMORROW Sd/- Sandeep Gupta . 6th Dec 2007. TOP URGENT." [ANNEXURE-G/Pg.2&3] iii. However it appeared that the TT Transfer was not effected instantly and the price was raised by USD 12 per M.T., which was adjusted on the amount of down payment only, thereby keeping the Invoice price constant at USD 420 per M.T. From the hand-endorsed record maintained by Shri Sandeep Gupta on the said sheet about three contracts (MKS 31, 32 & 33 ) respectively, it appeared that the original contracted price was USD 720 PMT, wherefrom USD 300 PMT was to be transferred by TT as down payment and remaining USD 420 PMT was to be reflected in Invoice for remittance through Bank. On rise in the price, further calculation endorsed by Shri Sandeep Gupta for the three contracts respectively is as below: As per the above details thus, the transaction value of the material supplied by M/s. M K Syn....
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....ight contact M/s. Kavya International, attention to Mr. Sandeep Gupta, or Mr. Silva of MK Synergy SDN. BHD(Annexure-G/Pg.13-18). viii. Copy of letter dated 05.03.2008 from M/s. M. K. Synergy SDN. BHD with reference to Sales Contract No. MKS/37-01/2008, dated 18/1/2008 raising the contract price (Old Price) of USD 780 per MT to the New Price of USD 950 per MT, if supplied in March 2008, owing to aforesaid unavoidable delays. Subject to acceptance of the new price of USD 950 PMT CIF, it was asked of the importer to send them the difference, 'quickly', '100%'. The differential amount reflected in the letter is USD 170 per MT (i.e. New Price USD 950 - Old Price USD 780 PMT), which for net quantity of 19 MT worked out to USD 3230, the amount demanded as difference. The said letter dated 05.03.2008 also bears some calculations made in hand thereupon by Shri Sandeep Gupta about the differential amounts required to be sent by the importers to the supplier as per the new rate, after adjustment of commissions and the balance outstanding in their account, etc.[Annexure-G/Pg.19] ix. Copy of letter/e-mail bearing ref : VAS/2008/28 dated 05th March 08 to Mr. Silva of M/s. MK Sy....
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....d on M/s. Vaishali Wax Products, the said chart of Jemasco Utama shows the same price of USD 890/MT in CIF for supply of 1 FCL of SPO grade, out of which also : - C.A.D. (Cash Against Documents) amount is USD 400/MT - the amount of down payment received is USD 490/MT (Total amount of down payment being USD 8,771.00 for supply of the net quantity of 17.9 MT to Vaishali Wax). (c) The said chart also contains calculation of the balance amount in hand (with Jemasco Utama) from the amounts of down payments received, the amount of 'still in hand' being shown as USD 974.00 out of the total amount of USD 42500 received as down payment. (d) Besides, the page bears certain hand-written endorsements made by Shri Sandeep Gupta of M/s. Kavya International, bearing calculations in respect of different combinations of importers on the basis of the rates of down payment indicated in the aforesaid chart. xi. Copy of Proforma Invoice No. IND 2490308 dated 06.03.2008 of M/s. Jemasco Utama Pt. raised on M/s. Barasat Wax Refiner for supply of 'Slack Wax - Grade SPO' @ USD 400 per MT; Term of payment : Down Payment and Balance cash against Documents at sight,....
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....h, a Mumbai based indenting agent for some Indonesia based suppliers, including M/s. Jemasco Utama, forwarded in turn from '[email protected]' to 'globaltradesolutions2004 @yahoo.co.in' of Mr. Sandeep Gupta of M/s. Kavya International, the Delhi-based agent, from where these documents were recovered on search. In the letter addressed to the said Rakesh. [ANNEXURE-G/Pg.27-30] 18. Statements of Shri Sandeep Gupta of M/s. Kavya International were recorded by the DRI officers on 29.11.2012, 06.01.2012 & 27.09.2012 wherein he stated inter- alia that: • His firm Kavya International is involved in sourcing and marketing of various industrial commodities such as slack wax, polymers, chemicals etc. • His main job is to act as an intermediate sourcing agent and coordinate between the supplier abroad and the importer in India, for which he gets quantity based commission. • ormally the agreed value between the supplier and the importer are not the value declared in the invoices. • He has seen the sheet marked with No. 59 titled "Down Payment Vs. Invoices" [Annexure-G/Pg.21 of SCN] pertaining to the month of March 2008, cont....
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.... rate of USD 890 per M.T. was the actual price at which the material was transacted between the seller M/s. Jemasco Utama,PT and M/s. Vaishali Wax Products of Muzaffarpur out of which an amount of USD 8771 was received by the seller as advance (down payment) from the buyer and the balance amount of USD 7160 was to be paid against documents by the buyer and therefore another invoice was issued by M/s. Jemasco Utama,PT to enable the buyer send remittance of the amount of USD 7160 through Bank. • For the consignment of M/s. Barasat Wax refiner also, the actual price at which the material was transacted was USD 890 per M.T., though the parallel invoice as the one in the case of Vaishali Wax above is not available in the bunch for the Barasat consignment. Even in absence of a parallel invoice as such, he could very well prove the higher transaction value of the Barasat consignment in question by reference to the statement of 'DOWN PAYMENT VS. INVOICES' issued by M/s. Jemasco Utama, copy of which is available in the afore-said bunch recovered from Kavya International during search, wherein the rates and amounts of actual transaction value and down-payment have been categoric....
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....munication contained in the said bunch of papers shown to him, he confirmed that those were excerpts from email communication between him and Mr. Rakesh Parekh, whereby Shri Rakesh Parekh in turn had forwarded the e-mail received from Jemasco Utama to him (Sandeep Gupta). As stated, he had signed each copy of the said bunch of 9(nine) Xeroxed pages as token of having seen them and as confirmation of their genuineness. • He would also state that similar system of the total transaction amount being bi-furcated into down payment amount paid in advance and balance amount to be paid against document was followed in relation to supplies made by M/s. M. K. Synergy of Malaysia, from whom also he had sourced a few consignments for his client importers including M/s. Barasat Wax Refiner of Kolkata and M/s. Vaishali Wax Products of Muzaffarpur. • He remembered that in one such series of contracts where the agreed price for supply of SPO grade Slack Wax of Indonesia origin (manufactured by Pertamina Oil Refinery) in ISO tank was USD 790 per M.T., the contract was entered at the price of USD 400 per M.T. (being M/s. M. K. Synergy's Contract Nos. MKS/37-01/08 for 40 M.T....
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.... 19. Shri Sandeep Gupta, further stated that in one such series of contracts, the agreed price for supply of SPO grade Slack Wax of Indonesia origin in ISO tank was USD 790 per M.T., and that commission to be paid to his firm was at the rate of USD 25 per M. T. in rupee equivalent in India, on further scrutiny of records of the transaction recovered from Kavya International during the search, the written record thereof was spotted, as endorsed by Shri Sandeep Gupta himself in his own hand-writing, marked page 45 and referred to in foregoing sections, wherefrom it is seen that the price agreed earlier was USD 780 per M.T. and the commission rate for Kavya International was USD 15 per M.T. The remaining amount anyway works out to be the same, i.e. USD 365 per M.T. (i.e. USD 780 -400 -15 = 365), to be sent to the supplier as down payment against the contracted three consignments as above. 20. In view of above, an inquiry was conducted by the jurisdictional Patna Regional Unit of DRI with M/s. Vaishali Wax Products (IEC- 2102000630), Bairia, Muzaffarpur and in that course a statement dated 07.11.2012 of the proprietor Shri Raj Kumar Goenka was recorded under section 1....
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....ntervention by DRI, Mumbai Zonal Unit (MZU), Shri Rakesh Parekh appeared in Mumbai on 21.01.13 and his statement under section 108 of the Customs Act 1962 was recorded before the Senior Intelligence Officer of DRI-MZU, wherein Shri Rakesh Parekh stated inter alia that: • He started his career as a broker in local market in trade for chemicals and later started his proprietorship firm M/s. Universal Traders at address 51, Daryasthan Street, 1st Floor, Room No. 14A, Masjid Bunder, Mumbai 400003. • He came into the business of indenting for international trading of chemicals and allied products from the year 2006-07 and he had been doing indenting for various suppliers of Indonesia. • In the year 2007-2008, he had been indenting for the Indonesian supplier of Slack Wax by the name M/s. Jemasco Utama and in that relation, he came into contact with Shri Sandeep Gupta who also had been doing indenting business for certain foreign suppliers through his indenting firm by the name M/s. Kavya International in Delhi. • In 2007-08 he had supplied through Sandeep Gupta to his client (importers) in 6-7 cases of import of slack wax from Indonesi....
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.... and others through his e-mail account '[email protected]', duly authenticated by him with his signature bearing date 21.01.2013. The bunch attached as ANNEXURE-GG (pages 1-31) to the SCN included the following: • Letter dated 24.12.2007 from Sandeep Gupta to Rakesh Parekh asking the latter to send details of shipments of two buyers', namely: 1 SHYAM PETRO : 4 FCL SPO : CIF COCHIN PORT 2 TECHNO WAX : 4 FCL SPO CIF NHAVA SHEVA • E-mail dated 09.01.2008 from Sandeep Gupta to Rakesh Parekh requesting the latter to confirm load of 10FCL of Slack wax SPO grade from Jemasco Utama in drums as the prices were accepted as per the given price list. It was also mentioned that e-mail would be sent soon to issue the P.Invoices (Proforma Invoices ) for which the buyers details and the place of delivery were being sent and that as agreed for X and Y all done, they could talk on phone. • E-mail dated 10.01.2008 from Sandeep Gupta to Rakesh Parekh intimating sale already done for 10FCL as per Price List given by the latter and requesting to send the "P. Invoice" for all the buyers soon and to ensure that the invoice for all was to be made by....
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....CL SPO : ISO : NHAVA SHEVA 07,695 -------------------------------------------------------------------------- ----------------------- TOTAL FUNDS USED : 42,993. "WE HAVE TO NOW PAY TO HIM" : USD 495. -------------------------------------------------------------------------- ----------------------- (I.E. 42993- 42500=493, to be exact) At the bottom of the e-mail, there is a request for Shri Rakesh Parekh to let him (Sandeep Gupta) know how to settle and to ask Mr. Thomas and revert. And, hence Shri Rakesh Parekh reverted vide the above-referred e-mail dated 12.03.08 bearing his proposal to settle the balance amounts of USD 495 as above and USD 380, another outstanding amount on account of M/s. Shyam in one go so that matter is better cleared. To this Shri Sandeep Gupta reverted to Shri Rakesh Parekh vide e-mail dated 12.03.08 clarifying that the amount of USD 493 is all (100%) to be paid as it was a part of the payments of advance he (Sandeep Gupta) had to make to the seller - PT Jemasco Utama for Techno Wax and so he could give that to Rakesh Parekh. Another clarification contained in the e-mail was that the amount of di....
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....2010 to 2012 was obtained and the price trend was analysed. The analysis revealed that the prices of Slack Wax and Residue Wax of Iran origin have normally been at par with those of UAE origin, the differences in the prices hardly ever exceeding the range of 5-20 US dollars per M.T. An exceptional trend of price of Iran-origin Residue Wax shooting high above the price of UAE origin Residue Wax was noticed in the year 2011. With broadening of the difference between the said prices from USD 15 in December 2011 to USD 35 in January 2011, the trend continued all through the year taking the difference to its peak of about USD 140-145 PMT in the few mid-year months of 2011, where after again the prices of Iran origin product came down gradually and heavily. From April 2012 onwards till the end of 2012, the prices of Iran origin Residue Wax was seen to be consistently less by 5-10 US dollars than the UAE origin Residue Wax. On further analysis of the data, it was also seen that the prices of Residue Wax have gradually increased from USD 590 /MT (FOB UAE/Iran) in July 2010 to USD 770 /MT in December 2010 and further remained in the range of USD 765-810/MT (FOB UAE/Iran) during 2011. This t....
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.... seen to continue till March 2012. 26. Investigation also revealed that Slack Wax and Residue Wax of Iran/UAE origin were grossly under-valued and actual Invoices had been wilfully substituted to serve the purpose of mis-declaration of value and thus evading huge Customs duty. Due to steep rise in petroleum prices globally around close of the year 2007, there appeared to have evolved a pattern of underinvoicing in supply of Slack Wax and Residue Wax from Iran/UAE and Indonesia, thereby restraining reflection of the global price rise to very little impacts on Invoice prices of different categories of Waxes supplied to Indian importers. On similar lines a number of consignments of Slack Wax and Residue Wax appeared to have been imported through Kolkata/Haldia port by M/s. Chowdhary Udyog of Kolkata from several suppliers of Iran/UAE/Indonesia. Among the suppliers are included such common names in the trade as M/s. Golden Way General Trading LLC (UAE), Harmony Impex FZE (UAE) and M/s. Fajr Tabandeh (Iran), M/s. Behran Oil Company, Sun Impex FZE, M/s. Remel International FZE, M/s. Asia Crown General Trading L.l.C., M/s Jemasco Utama Pt, M/s PT. Kimia Yasa, etc. 27. As....
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....ocuring the material, viz. Slack Wax from M/s. Pertamina (Persero) Menara, Cakrawala, lt. 11 Jl. MH. Thamrin No.9, Jakarta 10340, the Indonesian state-owned nodal oil refinery and energy producing company doing production and sale of Slack Wax in Indonesia. It has also been evident from e-mail communications from the suppliers and their agents to the importers that when any price revision was to be done, reference was made to price hike by the Pertamina refinery and the trader suppliers being under constraints to revise the price accordingly in consequence. The suppliers were supposed to incur lot more expenditures over the price of procurement of the material from Pertamina (Persero) refinery, e.g. on transportation, storage, documentation, shipment, commission to indenters in India and the like, apart from keeping a profit for themselves. Investigation revealed evidences of supplies of Slack Wax made directly to importers at different ports in India at much higher prices by the Indonesian Government owned refinery, M/s. Pertamina (Persero) itself or by M/s. Pertamina Energy Services Pte. Limited (PES), the wholly owned subsidiary of M/s. Pertamina Energy Trading Limited (PETRAL),....
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....k wax LMO 932.50 CIF 58.08 Niku Exim Int'L Pte Ltd. INNSA1 839007 22.05. 2008 Slack wax LMO 958.23 CIF 19.92 Amex Global Trade Pte Ltd. INMAA1 662091 04.02. 2008 Slack wax in ISO tank Unspecified (as on B/E) 710 CIF 39.21 Jemasco Utama PT. INMAA1 662093 04.02. 2008 Slack wax in ISO tank -do- 710 CIF 59.46 Jemasco Utama PT. INMAA1 671272 15.02. 2008 Slack wax in ISO tank -do- 710 CIF 39.87 Jemasco Utama PT. INMAA1 680079 26.02. 2008 Slack wax in ISO tank DAO 710 CIF 39.93 Jemasco Utama PT. INMAA1 682992 04.03. 2008 Slack wax in ISO tank DAO 788 CIF 40.65 Jemasco Utama PT. INSBI6 649393 21.07. 2008 Slack wax in Drums Unspecified (as on B/E) 1135 CIF 17.79 Jemasco Utama PT. • As for difference in the grades in Indonesian slack wax, it may be mentioned that Pertamina refinery of Indonesia produces three grades of slack wax, namely SPO, LMO and DAO. The prices for the said three grades are usually at par. There is no categorization of one grade being superior to the others.....
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....ssions on the line that no incriminating material was recovered from his premises/possession or control did not appear to hold good because he too has been declaring lower prices for subject goods at par with prices of those importers from whose possession incriminating materials have been recovered. It is seen that the value of Slack Wax of Iran/UAE/Indonesia origin and Residue Wax of Iran/UAE origin imported by M/s. Chowdhary Udyog over the period of about 4 years in question has been in the afore-said lower price-range at par with prices declared by several importers, evidences of corresponding higher prices of which have been recovered. The afore-said lower price range had also been followed for declaration of value over the period by other importers including Shri Amit Agarwal, like Shri Srikant Bagla, Shri Bajranglal Agarwal, Shri Rakesh Agarwal of Kolkata, whose association with Shri Ramdev Purba of the said M/s. AI and SAI in arrangements related to supply of Slack Wax and Residue Wax of Iran/UAE origin has come to light in the context of the statement of the schedule for shipments effected for each party being forwarded by e-mail from M/s. Fajr Tabandeh International Tradi....
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.... phenomena at several ports. The investigation conducted tends to lead to prima facie confirmation of the intelligence and revelation of various methods applied by the importer and/or the supplier and their agents to cause under-declaration of value and suppression of the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, with a purpose to evade duty. The importvalue data-base of the contemporaneous period, therefore, contains in abundance data of imports of comparable goods at such mis-declared low value, which themselves have either been already subjected to or have to be subjected to the scanner under the ongoing process of investigation relating to imports made by other importers. On the contrary, there are also evidences of imports effected at higher value, but comparably not a plenty owing to the rampant under-invoicing as aforesaid. The value, therefore, cannot be determined by applying provisions of rule 4 of CVR'07 with subrule 3 of the said rule providing that 'in applying this rule (rule 4), if more than one transaction value of identical goods is found, the lowest such value shall be used to dete....
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....on of value in terms of Rule 7 of CVR'07, or for that matter under Rule 7(3) of CVR'07, as those appeared to be fudged, unrealistic and cautiously aligned with the declared prices of import instead of reflecting the actual transaction value of the post-import deals. The statement of Mr. Noor Muhammed, Proprietor of M/s. Bilal Match Works, Sivakasi, stood testimony to the kind of arrangement the importers have among themselves as well as with their customers in associated industries. Value of subject imported goods, therefore, cannot be determined under rule 7, and for that matter under rule 7(3), ibid . Data in respect of cost or value of materials and fabrication or other processing employed in producing the imported material in question in Iran and UAE is neither available nor have been provided, by or on behalf of the importer, and, therefore, value of the imported goods cannot be determined under Rule 8 ibid either. 30.4 Recourse, therefore, has to be taken to Rule 9 of CVR'07 using reasonable means under 'Residual Method' to determine value of imported Slack Wax of Iran/UAE/Indonesia origin and Residue Wax of Iran/UAE origin of subject importer since F.Y 2008-09 onwar....
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....ents at this price by the based importer M/s. Shri Hari Wax-O-Chem under Bill Nos. 446784 and 446785 both dated 16.12.2008. 2) As per the Proforma Invoice (No. 083102009 31.08.2009) of M/s. GFEC sent in e-mail by Mr. Massoud Moussighi and recovered from e-mail account of Shri Purba during investigation at DRI-TTN, the said Proforma Invoice being relatable to Commercial invoice no. A1809 22.09.2009 and B/E No. 471613 dated 21.10.2009, filed AI at TTN-port (ref. para 3.2.8/9 of SCN), the actual residue wax supplied appeared to be USD 520 PMT CF. as per the intercepted account statement of Mr. Massoud Moussighi the actual value of residue wax supplied Invoice No. A1801, corresponding to BE No.- 466814 19.08.09 of Tuticorin port (ref. para 3.2.17 of SCN), appeared be USD 535 PMT C&F. These reflect that the prevalent Iran/UAE origin Residue Wax during the period 2008-09 excess of USD 500 PMT, which as per the general pricing of subject commodities happens to be 20-30% less than contemporaneously prevalent price of Slack Wax. This declaration of USD 760 PMT CF by M/s. Shri Hari Waxas the genuine transaction value of Slack Wax at that time. October 14, 2009 to November 24, 2009 N....
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....N) was USD 1015 PMT C&F, which substantial rise in the then prevalent price. 2) Two items namely Abadan Heavy Slack Wax and Iranol Slack Wax imported contemporaneously by M/s. SPPPL Bill of Entry No. 4778991 dated 28.09.2011, filed against No. A2073 of M/s. Harmony Impex F.Z.E. were respectively priced USD 1020 and USD 1040 PMT (C&F). (ref. para 5.1.iv of SCN) 2) Price of US$ 1080 PMT was shown in the Proforma No. RI-YT/2/1390 dated 30.07.2011, recovered from computer of M/s. Yash Trading, on search of their premises Kolkata, relatable to Bill of Entry No. 5087297 dated 02.11.2011 filed by the said importer at much lower value (ref. para of SCN). Sept. 5, 2011 to December 31, 2011 430-500 975 As per the recovered Remel International's Price List, effective from 05.09.2011, the minimum value among different categories in Slack Wax in C&F Haldia terms is indicated as USD 975/that signifies a slight scaling down of the earlier prevalent (ref. para 5.1.ii of SCN). 30.6 On similar lines, but for a major difference that the evidences of actual import at prices as proposed to be determined are either not available or are meager in the valuation data-base of impo....
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....y 4535849 dated 03.09.2011 from Tuticorin port (ref. para of SCN) appeared to be USD 765 PMT C&F, which signifies another rise in price over the period. October 12, 2011 to November 29, 2011 No B/E 870 The rising trend in the price of residue wax continues. the recovered accounts statement of Massoud Moussighi, transacted price of residue Wax, supplied vide Invoice A2055, and imported under Bill of Entry No. 4895987 12.10.2011 from Tuticorin port (ref. para 3.2.3, 3.2.17 appeared to be USD 870 PMT C&F, which signifies a substantial rise in price again. November 30, 2011 to February 17, 2012 415 840 As per the recovered accounts statement of Massoud Moussighi, the transacted price of residue Wax, supplied vide Invoice A2087 dated 02.11.2011, and imported under Bill of Entry 5345063 dated 30.11.2011 from Tuticorin port (ref. para 3.2.10 of SCN), appeared to be USD 840 PMT C&F, signifies not only arrest of the rising trend in price, but little decline. SLACK WAX(Indonesia-origin) 30.7 Similarly on the basis of afore-cited recoveries vis-à-vis the analyses of 'Petrosilicon' data (subject to the period of its availability, as discussed supra ) and th....
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....ignment imported by M/s. Barasat Wax Refiner was covered under bill of entry no. 402793 dated 08.04.2008, filed prima-facie by suppressing the above transaction value and mis-declaring the same at USD 400 PMT CIF [ref. para 4.2.1/x &xiv of SCN]. (ii) Conforming to the gradual price-rise during 2008, the customs import valuation databse is replete with evidences of supplies of Indonesia origin slack wax made at prices in excess of USD 1000 & 1100 PMT CIF during the later half of the year 2008 by suppliers none other than M/s. Jemasco Utama and M/s. Niku Exim Int'l Pte Ltd. June 2008 to December 2008 No B/E 1115 (i) As per the series of incriminating evidences, including recoveries from the Delhi-based agent M/s. Kavya International's premises comprising among others Price quotations for a few months by M/s. Jemasco Utama, for SPO grade Indonesian slack wax to Haldia port at USD 1115 PMT in June and 1120 July 2008 [ref. para 4.2.1/xvi of SCN]. (ii) Evidences of even higher prices for imports actually effected during this later half of the year are available in the customs import valuation database, as mentioned in the above box. (i) A downtrend in imports by trad....
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....& 5) above, appeared liable to be determined as value of items 'Slack Wax' and 'Residue Wax' respectively with reference to the periods indicated there against under rule 9 of CVR'07 read with section 14 of the Customs Act, 1962. 30.9 The ascertained value after re-determination of the value of the imported goods covered under 18 Bills of Entry filed by the importer in the subject case comes to Rs. 64,72,6904/- (Rupees sixty four crore seventy two lakhs six thousand nine hundred four only) The duty liability is calculated as Rs. 18,23,71,76/-(Rupees one crore twenty three lakhs seven thousand one hundred seventy six only) .The summary is given in table below. TABLE-6 Name of the importer Country of origin of the goods No. of EDI Bills of Entry of SLACK WAX of 2008 or later, assessed with P.D.Test Bonds No. of EDI Bills of Entry of RESIDUE WAX of 2008 or later, assessed with P.D.Test Bonds Assessable Value at the time of Assessment and as determined on Final Assessment under section 18(2) of The Customs Act, 1962 [IN RUPEES] Total amount of Duty paid and/or debited at the time of assessment [IN RUPEES] Assessable Value as proposed to be determined under ru....
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....h final assessment was taken to be "deemed"; that there was no final order of assessment. The Court vide the said Order dated 12.08.2014 enjoined the department to pass formal order of assessment and expressed that section 28 of the act would apply to the writ petitioner accordingly. The Judge inter alia further observed that he found no reason to set aside and quash the show cause notice dated 25th June, 2013 and directed the appropriate authorities to adjudicate upon the said show cause notice, following the observation made therein in accordance with law within a period of three months from date upon giving hearing to the writ petitioner and by a reasoned order; that it would be open for the petitioner to agitate before the Authorities that the demand under Section 28 does not lie. 33. In compliance, action was initiated for issuance of formal order of finalization of provisional assessment under section 18(2) of the Customs Act, 1962, also under effort to comply with the other direction of the High Court to adjudicate upon the show cause notice within the stipulated period. A Final Order of Assessment under Section 18(2) of the Customs Act, 1962, bearing S202-Gr.I(P)-2....
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.... ) thus had a situation where there exists a show cause notice issued under, inter alia, Section 28 of the said Act which preceded the final order of assessment issued subsequently on 15th September, 2014; that they (The Division Bench ) record the consent of the petitioner rendered through Mr. Mehta, the learned advocate (for the petitioner/appellant ) that the petitioner accepts the final order of assessment dated 15th September, 2014 both as it being an order of final assessment as well as its contents; that the contents of the said final order are a repetition of the stand of the customs that the provisional assessment earlier made stood accepted causing discharge of the PD Test Bonds which the petitioner acknowledged and never disputed. Taking into account the pleadings made from both the sides The Division Bench passed order setting aside the show cause notice dated 25th June, 2013 which as it stood was issued before the order of final assessment which had been admitted by the parties to have been duly made. The Division Bench also clarified that in the circumstances, the parties are at liberty to take such steps in consequence of the order they feel necessary, in accordance ....
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....oup-1Z & 7Z, Mini Custom House, West Bengal against certain provisionally assessed Bills of Entry of M/s. Chowdhary Udyog has the effect of finalization of provisional assessment in respect 4(four) Bills of Entry (Bs/E) of Slack Wax of Iran/UAE origin and 1(one) B/E of Slack Wax of Indonesia origin. 37. The facts incorporated in the said Final Orders of Assessment dated 15.09.2014 are that to ascertain whether the imported goods are Slack Wax and/or Residue Wax, representative samples drawn from the respective consignments were sent to Custom House laboratory for testing; that the Bills of Entry were assessed provisionally under section 18(1) of the Customs Act, 1962 against P.D. Test Bonds and clearance was allowed pending receipt of test reports; that subsequently, test reports in respect of all the respective consignments were received from the Custom House Laboratory which confirmed the declaration Slack Wax/Residue Wax, as made in the respective Bills of Entry; that accordingly the PD Test Bonds were cancelled and finalization of provisional assessment effected without any change in any respect whatsoever. It further contained inter alia that although no final order o....
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....tigation, therefore, has to be ascribed to them as a wilful act on their part. Hence this appeared to be a fit situation for invoking Section 28(4) read with 28(7) and clause (b) of "Explanation 1" attached to Section 28, and, the erstwhile Proviso to Section 28(1) read with the "Explanation" attached to it read with clause (b) to Section 28(3), under the Customs Act, 1962, as applicable during the material period of their currency since April 2008 and demanding the amount of duty short-levied along with interest applicable thereupon. Hence the differential duty amounting to Rs. 86,04,692/-(Rupees eighty-six lakh four thousand six hundred ninety-two) appeared recoverable from the importer under Section 28(4) of the Customs Act, 1962 along with applicable interest. 39. The declaration of value from the importer's side had been final in all respects. The Bills of Entry were originally assessed under provisions of section 18(1) of the Customs Act, 1962 for the purposes of P.D.Test Bonds as the imported consignment required to be released provisionally pending chemical testing of the material imported. The aspect of value vis-à-vis the declared description of the materi....
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....ar Chowdhary vide SCN DRI. F. No. 33/KOL/APP/2012/Pt.II dated 06.11.2015 were called upon under provisions of section 28 and/or section 124 of the Customs Act, 1962 to show cause in writing within 30 days from the date of receipt of this notice to the Principal Commissioner of Customs (Port), Custom House, Kolkata, as under:- 42. M/s. Chowdhary Udyog, the importer, with reference to TABLE-I of the subject Show Cause Notice, were called upon under provisions of section 28 and section 124 of the Customs Act, 1962 to show cause in writing within 30 days from the date of receipt of this notice to the adjudicating authority as to why: I. The declared value for the goods imported vide impugned 18 EDI bills of entry filed at Custom House Kolkata, amounting together to a total assessable value of Rs. 3,40,12,883/- (Rupees three crore forty lakh twelve thousand eight hundred eighty three), which stood finally assessed at that value vide the Final Orders of Assessment dated 15.09.2014, should not be rejected under rule 12 of CVR'07 and the value of the said goods should not be determined as Rs. 6,47,26,904/- (Rupees six crore forty-seven lakh twenty-six thousand nine hundre....
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.... facts and circumstances all the allegations made in the show cause notice dated 25.06.2013 were laid at rest and stood finally adjudicated. The show cause notice dated 6th November 2015 is in verbatim the same allegations which were made in the show cause notice dated 25th June, 2013. The same relied upon documents are also part of the show cause notice which was previously issued. Therefore, this show cause notice has been issued to them on the selfsame allegations and charges which were concluded and the Department having not filed any cross objection and/or revision under section 129D of the Customs Act in the appeal filed by them before the Commissioner of Customs (Appeals) and the dispute having become res judicata , it was not open for the Department to pursue the same allegations as a second round of litigation or a second bite of cherry after the matter was stood concluded and accepted by all sides before the Division Bench of Hon'ble Calcutta High Court. 43.2 That the subject show cause notice is also not permissible in view of the finality of the issues arrived at in the final proceedings under section 18(2) of the Customs Act, 1962. 43.3 It has been fu....
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....ion was made on the basis of certain investigation done by the DRI at Tuticorin and at other places where search and seizure was made by the Custom Authorities at the premises of one M/s. Abhisekh India and on the basis of documents seized from the office of M/s. Abhisekh India which included its Statement of Account with the foreign supplier. In the respective show cause notice on the basis of value and price mentioned in the Statement of Account seized from M/s. Abhisekh India, transaction value of the appellant's import were sought to be rejected on the basis of third party documents. The show cause notice referred to few bills of entries filed by M/s. Abhisekh India and certain stray import by others. The appellant challenged the show cause notice by filing a writ petition in the Hon'ble High Court contending that without completion of final assessment under Section 18 (2) of the Customs Act, 1962 the show cause notice under Section 28 of the Customs Act were premature and without jurisdiction inasmuch as without completion ofre-assessment under section 18(2) of the Customs Act 1962 charge of short levy under Section 28 could not be tenable. The writ petitions filed by the appe....
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....mports mentioned in the show cause notice were not available in the Custom's Data. Dates were fixed for cross examination on 08.03.2017, 18.04.2017 and 09.05.2017 but none turned up. On 26.07.2017 new adjudicating authority assumed office and proceeded for hearing. Before the new adjudicating authority the appellants brought to his attention that the notice for cross examination could again be issued to the aforesaid persons but the adjudicating authority who passed the impugned order denied to issue any notice for cross examination by its communication dated 17th October 2017 made to the appellant. The appellant filed additional submissions questioning admissibility of the documents on the basis of which the transaction value were sought to be rejected or questioned in the facts and circumstances of the case. No hearing notice was given there after. On 29th December 2017 the adjudicating authority passed the respective impugned order of adjudication without further notice. The appellants preferred appeal which were allowed by the Tribunal on 3rd May 2019 by setting aside the respective order of the adjudicating authority. The respondent preferred appeals to the Hon'ble Supreme Cou....
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....already subjected in the re-assessment proceeding.. The appellant cited the following judgements. Caprihans India Ltd. -Vs- Commissioner of Central Excise reported in 324 ELT page 8 (SC)Nizam Sugar Factory -Vs- Commissioner of Central Excise reported in 197 ELT page 465 (SC), ECE Industries Ltd. -Vs- Commissioner of Central Excise reported in 164 ELT page 236 (SC). The appellant next submitted that the transaction value was sought to be rejected on the basis of document seized from M/s. Abhisekh India at Tuticorin which has no relationship with the appellant's import. Further none of the original documents could be provided for inspection. No test report of the bills of entry on which reliance were placed for rejecting the transaction value were part of the relied upon document. Referring to certain stray imports without corresponding test report of oil content of the goods would have no relevancy inasmuch as comparability of the goods cannot be found. The appellant cited the following cases- Basant Industries -Vs-Additional Collector of Customs, Bombay 81 ELT page 195 (SC), Commissioner of Customs, Kandla -Vs- Mira Impex reported in 167 ELT page 446, Spi....
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....f Sanjivani Non-Ferrus Trading Pvt. Ltd. reported in 355 ELT page 3 (SC) and Century Metal Re-cycling Industry -Vs- Union of India reported in 367 ELT page 3 (SC) has held that in the event contemporaneous import of identical or similar goods are not available in that case transaction value cannot be rejected. In the show cause notice as well as in the adjudication order it is admitted that there is no data available under Rule 3 to Rule 8 to reject the transaction value of imports made by the appellant. The appellant further submits that transaction value has been rejected relying on the uncertified publication of a private magazine known as Petrosilicon. No details of the publisher and no detail of any actual transaction having taken place is shown. A page from Petrosilicon Journal has been picked up in the show cause notice which does not show any import or any transaction on the price given. Source of price has also not been given from where it is being taken. The publication price was not reliable at all which could be demonstrated from the page itself which include price of paraffin wax. Price of slack wax is half of paraffin wax. Paraffin wax at the materia....
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....t also relies upon the judgement of the Tribunal in case of Sheel Chand Industries -Vs- Commissioner of Customs, New Delhi reported in 2011(274) ELT Page 579 (Tr. Delhi) in which it has been held that inabsence of any evidence of any payment over and above the declared value the challenge to transaction value cannot be lawfully done. The appellant submits that the rejection of transaction value and the loading is bad in law. The adjudicating authority has not given any reason for loading the value. The appellant submits that it was wholly unjustifiable on the part of the adjudicating authority without discussing comparability of the goods to reject the transaction value. The adjudicating authority was bound by the statutory rules. He has rejected DOV data all over India by alleging a cartel which was outside the show cause notice. No allegation and evidence of cartel was demonstrated either in the show cause notice or in the order. The allegation of cartel was made outside the show cause notice. The Adjudicating Authority being bound by the statutory rules has to follow the Valuation Rules. There is no material and charges in the show cause notic....
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....d buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods : Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurred by the seller in sales in which he and the buyer are not related; (c) substitute values shall not be established under the provisions of clause (b) of this sub-rule, (4) If the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9. RULE 4. Transaction value of identical goods. - (1) (a) Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued : Provided that such transaction value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962. (b) In applying this rule, the tra....
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....- (1) Subject to the provisions of rule 3, if the goods being valued or identical or similar imported goods are sold in India, in the condition as imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on the unit price at which the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deductions : - (i) either the commission usually paid or agreed to be paid or the additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind; (ii) the usual costs of transport and insurance and associated costs incurred within India; (iii) the customs duties and other taxes payable in India by reason of importation or sale of the goods. (2) If neither the imported goods nor identical nor similar imported goods are sold at or about the same time of importation of the goods being valued, the value of imported goods shall, subject otherwise to the provisions of sub-rule (1), be based on th....
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....ntry of exportation; (iv) the cost of production other than computed values which have been determined for identical or similar goods in accordance with the provisions of rule 8; (v) the price of the goods for the export to a country other than India; (vi) minimum customs values; or (vii) arbitrary or fictitious values. The appellant submits that in view of the judgement of the Hon'ble Supreme Court in the case of Century Metal Recycling Pvt. Ltd. rejection of transaction value was not proper and value could not be loaded by applying Rule 9 by taking recourse to certain stray evidences without any comparability. The order of confiscation of the goods were not tenable in fact and in law. The appellant further submits that the show cause notice is based on the stray evidences without any comparability and without any document showing comparability the subject import. The appellant cited judgement in the case of - Basant Industries -Vs- Additional Collector of Customs, Bombay reported in 81 ELT page 195 SC. Commissioner of Customs, Kandla -Vs- Mira Impex reported in 167 ELT page 446. Spice Trading Corporation -Vs ....
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....ances, we set aside the impugned order and allow the appeals with consequential relief. The Hon'ble Supreme Court in the case of Union of India vs. Food Speciality Limited report in 97 ECT page 402 (SC), held : Shri Vellapally, learned senior Counsel for the respondent assessee states that this appeal arises out of a consequential order made pursuant to the decision reported in Dalmia Industries Limited vs. Collector of Central Excise - 1992 (61) CLT 295 pertaining to classification in respect of the same assessee. He submits that the question of classification was decided by the Tribunal in the assessee's favour and even though a caveat was filed in this Court by the asessee, there is no intimation of any appeal being filed by the Department against the Tribunal's decision pertaining to classification. He submits that irrespective of the merits of the Tribunal's decision on the question of classification, if the decision in the assessee's favour has become final, the question of the consequential order about quantum made by the Tribunal in favour of the assessee, cannot alone be challenged by the Department. He submits that this appeal must fail for this reason a....
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....rson who had misled the authorities or made any misstatement/misdeclaration. The appeal is allowed on this ground itself without going into the issue of classification setting aside the impugned order. As a result, the impugned orders passed by the authorities below are set aside. In case of Nizam Sugar -Vs- Collector of Central Excise, UP (197 ELT Page 465 (SC) it was held - Without going into the question regarding Classification and marketability andleaving same open we intend to dispose of the appeals on the point of limitation only. This Court in, case of P & B Pharmaceutical (P) Ltd. v. Collector of Central Excise reported in (2003) 3 SCC 599 = 2003 (153) E.LX..14 (S.C.) has taken the view that in a case in which a show cause. notice has been issued for the earlier period on certain set of facts, then, on the same set of facts another SCN based on the same/similar set of facts invoking the extended period of limitation on the plea of suppression of facts by the assessee cannot be issued as the facts were already in the knowledge of the department, It was observed in para 14 as follows: "14. We have indicated above the facts which make it clear that ....
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....2004 166) JLL.L._151 (S.C.)]. It was observed in para 6 : "......... On the ratio laid down in this judgment it must be held that once the earlier Show Cause Notice, on similar issue has been dropped, it can no longer be said that there Is any suppression. The extended period of limitation would thus not be available. We are unable to accept the submission that earlier Show Cause Notice was for a subsequent period and/or it cannot be taken into consideration as it is not known when that Show Cause Notice was dropped, If the Department wanted to take up such contentions it is for them to show that that Show Cause Notice was not relevant and was not applicable. The Department has not brought any of those facts on record. Therefore, the Department cannot now urge that findings of the Collector that that Show Cause Notice was on a similar issue and for an identical amount is not correct." 9. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as....
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.... Madras, Tuticorin which fact has not been disputed by the adjudicating authority. On the contrary the adjudicating authority admits such contemporaneous import at a lower value but does not accept the same by holding that there was an intelligence that goods were under invoiced. By such intelligence Valuation Rules cannot be discarded. The valuation can only be disputed on the basis of contemporaneous import of higher value and if there is no such material available in that case transaction value cannot be rejected. The Hon'ble Supreme Court in the case of Commissioner of Central Excise, Noida -Vs- Sanjivani Non Ferrous Trading Pvt. Ltd. reported in 365 ELT Page 3 (SC) it was held- 10) The law, thus, is clear. As per Sections 14(1) and 14(1-A), the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision. Section 14(1) is a deeming provision as it talks of 'deemed value' of such goods. Therefore, normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs ....
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.... is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared in the bill of entry is the value referred to above and not merely the invoice price. xxx xx xxx 12. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1-A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Undervaluation has to be proved. If the charge of undervaluation cannot be supported either by evidence o....
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....dia reported in 367 ELT page 3(SC) the Hon'ble Supreme Court held - Interestingly, the order in original also records that the imported foods being aluminium scrap was not a homogeneous commodity and therefore, cannot be evaluated on the 1 basis of the samples or lab testing. Further, the order holds that it was very difficult to find any identical/similar goods imported in India having same chemical and physical Composition and that the values of aluminium scrap identifical /similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd, (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports of other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared i....
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....ilable nor have been provided, by or on behalf of the importer, and, therefore, value of the imported goods cannot be determined under rule 8 ibid either". Adjudication order (Para 37.1) "Next important issue after rejection of declared value as transaction value is re-determination of the value. In terms of Rule 3 (4) of the CVR'07, the value has to be determined by proceeding sequentially through rule 4 to 9, Rule 4 of the CVR'07 provides for determination of the transaction value on the basis of identical goods sold for export to India and imported at or about the same time as the goods being valued. However, in instant case, I find that this is a case where importers formed a sort of cartelizatioin and resorted to undervaluation of imported goods to evade Customs duty. The scale of operation was massive enough to corrupt the entire import data base. Hence this corrupted data can not take as contemporaneous import value. The value, therefore, cannot be determined by applying provisions of rule 4 of CVR'07. For the self same reasons, the value of subject goods cannot be determined under provisions of rule 5 of CVR'07, with sub-rule (3) of rule 4 being applicable....
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....ences were relied upon without comparability of the goods. In the case of Basant Industries -Vs- Additional Collector of Customs reported in 81 ELT page 195 (SC); the court held : 4. It will, thus, be seen that the price of US $ 1.80 each for 40,000 pieces was fixed after considerable negotiations and was fixed after keeping in view that the importers were old and valued customers. It is not known whether the other Importer, namely, M/s. Ravi Agricultural Industries had the same relationship. There is also no reason why the instance pointed out by the importer that the very same commodity had been supplied by another supplier at the same price of US $ 1.80 GIF per piece should have been totally ignored and Instead the stray instance of Ravi Agricultural Industries should have been picked up for the purposes of fixation of price. IT is essential to bear in mind the fact that in the business world, considerations of relationship with the customer are also a relevant factor/In the circumstances, we are of the opinion that the Department was wrong in revising the price from US $1.80 to US $ 2.20 GIF per piece. We therefore, allow this appeal, set "aside the order of t....
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....s mentioned in Table 3 and Table 4. Without any discussion value proposed in the Table 3 and Table 4 is taken. Paragraph 37.4 of the adjudication order is set out herein below : "I also take into account the fact that over such a long period of time international oil prices cannot remain static. Taking into account above mentioned fact, I agree with the re-determined value of imported slack wax and residue wax as proposed by the investigation reflected in Table- 3 and Table-4 above and accordingly arrive at re-determined value of the imported slack wax and residue wax as reflected in Table-5 above". There is no reason given for adopting the value mentioned in Table 3 and Table 4. Therefore, the loading of value by the impugned order is liable to be set aside. Stray evidence instances cannot be used to challenge the declared value without even mentioning of comparability. Various judgement of the Hon'ble Supreme Court has been cited on theproposition that there was no contemporaneous import of identical and similar goods at higher value and therefore transaction value cannot be challenged. The Hon'ble Supreme Court in the case of Commissi....
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.... is liable to be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion. Inasmuch as no case of contemporaneous import of higher value has been shown the rejection of transaction value would not be tenable. There is no case of any clandestine remittance. In the case of case of Chand Industries -Vs- Commissioner of Customs, New Delhi reported in 274 ELT page 579 (7 RIB) it was held that there needs to evidence on record to show that importer had paid any consideration over and above value declared by the importer to the supplier. There is no allegation of any clandestine remittance. The adjudicating authority was bound by statutory rules. There was no allegation of cartel in the show cause notice. The adjudicating order held in paragraph 36.11 of the order - With regard to above contention, I find that the evidences gathered in course of investigation very clearly lays bare....
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.... the slack wax and residue wax as declared by the appellant. The goods were provisionally released on bonds, Bank Guarantees and securities. 31.05.2013 A combined show cause notice was issued to the Shri Hari Wax-O-Chem Pvt Ltd, Deep Jyoti Wax Traders Pvt. Ltd., Shiv Chemical Industries, Amit Kumar Agarwal alleging that there was a short levy in assessment of duty of the Bills of Entry on the basis of allegations made in the show cause notice and on 25th June 2013 a similar show cause notice was issued to Chowdhary Udyog, Pawan Kumar Chowdhary on the self same allegations mentioned above. 01.04.2014 Shri Hari Wax-O-Chem Pvt. Ltd., Shiv Chemical Industries, Deep Jyoti Wax Traders Pvt. Ltd. and Chowdhary Udyog challenged the proceedings under the show cause notice on the ground that since the Bills of Entry were provisionally assessed and final assessments were yet to be made the show cause notices were liable to be quashed. The Hon'ble Court stayed the proceedings under the show cause by its order dated 1st April, 2014. 12.08.2014: The writ petitions came up for final hearing before the Hon'ble Justice I. P. Mukherjee whereupon the Hon'ble Court directed the respon....
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....stries was finally assessed under Section 18(2) of the Customs Act confirming the provisional assessment order. 07.10.2016 The second show cause notice was issued to Shri Hari Wax-O-Cam Pvt. Ltd. and Shiv Chemical Industries on the self same allegations and cause of action covering the same Bills of Entry alleging short levy in respect the same Bills of Entry which were finally assessed after the issue of first show cause notice dated 31st May, 2013. 15.11.2016: All the parties filed their respective reply to the show cause notice raising objection on issue of a second show cause notice on the same cause of action which were alleged in the show cause notice dated 31st May 2013 / 25th June 2013 which were in verbatim same and that the show cause notice having been quashed in view of the final assessment made after the show cause notice on the self same facts issue of second show cause notice was barred by principle of resjudicata and/or constructive resjudicata amongst other points that there was no comparable imports and there is no document to challenge transaction value. 21.02.2017: The then adjudicating authority allowed cross examination of the various witness....
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....for de novo consideration. 7. We would also like to reproduce the various provisions of the Customs Act, which are relevant for the purpose of determination of the issue along with the Customs Valuation (Determination of the Price of Imported Goods), Rules, 2007. Section 14 of Customs Act. "Section 14 : Valuation of Goods. (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf : Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brok....
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.... "goods of the same class or kind", means imported goods that are within a group or range of imported goods produced by a particular industry or industrial sector and includes identical goods or similar goods; (d) "identical goods" means imported goods - (i) which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods; (ii) produced in the country in which the goods being valued were produced; and (iii) produced by the same person who produced the goods, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods; (e) "produced" includes grown, manufactured and mined (f) "similar goods" means imported goods - (i) which although not al....
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..../s Shree Hari Wax, Deep Jyoti Wax and Shri Amit Agarwal alleging that there were a short levy of the Customs duty in the provisional assessments on the basis of allegation made in the show cause notice. Similar show cause notices were issued to M/s Chowdhury Udyog and its Director Shri Pawan Kumar Chowdhary on the very same facts and the ground on 25 June, 2013. These show cause notices were challenged before the Hon'ble High Court of Kolkata which stayed the proceeding under the show cause notice, by its order dated 1 April, 2014 which was finally disposed of on 12.8.2014 by Hon'ble Justice Shri I.P. Mukherjee, who directed the Department to complete the final assessment first and then to adjudicate upon the show cause notice. This order of Hon''ble Single judge was appealed against by the appellants before the Division Bench. The Division Bench quashed the show cause notice dated 25.6.2013 and 31.5.2013 with liberty to the department to take legal recourse as consequence of the order as it felt necessary, in accordance with law. 9. During the intervening period of order of Hon'ble Single judge and Division Bench of Hon'ble High court of Kolkata, the Department finalized the pr....
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....ortunity to the appellant for the inspection of the original/copies of document relied upon by the department. 13. From the above narration, it is, thus, clear that the adjudicating authority has not permitted the cross examination of witnesses and also did not ask to permit the inspection of original or even photo copy of the document relied upon by the department. The reasons given by the adjudicating authority for not permitting the cross examination of the prosecution witnesses was that this will not lead to any conclusion of the case, is in complete disregard to the provisions of Section 138B of the Customs Act. The provisions of Section 138 B of the Customs Act will deals with relevancy of statements under the certain circumstances is reproduced herein under : "138B. Relevancy of statements under certain circumstances.- (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,- (a) when the person who made the statement is d....
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....wife of Shri Ramdeo Purba. Shri Ramdeo Purba was involved in import of sale of waxes in respect of both of the above units apart from being representative of some of the Dubai based manufacturers at Tuticorin port. The seized print out e.mail were downloaded for the computer of these two firms which indicated that the invoices which were produced to the Customs were of the lower value when compared to those one which were available in the computer printout and e-mail and email. The extracted e-mail showed the price as under: TABLE-2 Sl.No. Bill of Entry & Date Description Qty. (MT) Price (USD/ MT) (CF) Supplier 1 272322 23.06.2010 Slack Wax 13.18 740 Remel International, UAE 2 272641 29.06.2010 Light Slack Wax 17.15 750 Global Future Expander Corp.(GFEC) 3 272642 29.06.2010 Heavy Slack Wax 33.79 730 4 3192733 04.12.2011 Abadan Slack Wax 17.41 920 Harmony Impex FZE Iranol Slack Wax 35.03 950 5 4778991 28.09.2011 Residue Wax 17.02 870 Abadan heavy Slack Wax 17.02 1020 Iranol light Slack Wax 34.044 1040 16. During investigation, the statement of Shri R....
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.... which reads as under: These are reproduced as under: "SECTION 138C. Admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence. - (1) Notwithstanding anything contained in any other law for the time being in force, - (a) a micro film of a document or the reproduction of the image or images embodied in such micro film (whether enlarged or not); or (b) a facsimile copy of a document; or (c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a "computer printout"), if the conditions mentioned in sub-section (2) and the other provisions contained in this Section are satisfied in relation to the statement and the computer in question, shall be deemed to be also a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. (2) The conditions referred to in sub-section (1) in respect of a c....
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....ed in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. (5) For the purposes of this section, - (a) information shall be taken to be supplied to a computer if it is supplied thereto in any appropriate form and whether it is so supplied directly or (with or without human intervention) by means of any appropriate equipment; (b) whether in the course of activities carried on by any official, information is supplied with a view to its being stored or processed for the purposes of those activities by a computer operated otherwise than in the course of those activities....
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....ctronic devices, as required under the law. 9. The investigation is normally started after collecting the intelligence/information from various sources. The investigating officers are procuring the evidences in the nature of documents, statements, etc., to establish the truth. During the evolution of technology, the electronic devices were used as evidence. In this context, the law is framed to follow the procedure, while using the electronic devices as evidence for authenticity of the documents, which would be examined by the adjudicating authority during adjudication proceeding. In the instant case, it is found that the entire case proceeded on the basis of the electronic documents as evidence. But the investigating officers had not taken pain to comply with the provisions of the law to establish the truthfulness of the documents and merely proceeded on the basis of the statements. Hence, the evidence of electronic devices, as relied upon by the adjudicating authority cannot be accepted. 10. The Hon'ble Supreme Court in the case of Anvar P.V. (supra), while dealing with Section 65B of the Evidence Act, 1872 (Pari materia to Section 138C of the Act, 1962), observ....
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....ic records can lead to travesty of justice. 17. Only if the electronic record, is duly produced in terms of Section 65B of the Evidence Act, would the question arise as to the genuineness thereof and in that situation, resort can be made to Section 45A - opinion of Examiner of Electronic Evidence. 18. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements under Section 65B of the Evidence Act are not complied with, as the law now stands in India. ........................................... ........................................... "22. The evidence relating to electronic record, as noted hereinbefore, being a special provision, the general law on secondary evidence under Section 63 read with Section 65 of the Evidence Act shall yield to the same. Generalia specialibus non derogant, special law will always prevail over the general law. It appears, the Court omitted to take note of Sections 59 and 65A dealing with the admissibility of electronic record. Sections 63 and 65 have no application in the case of secondary evidence by way of electronic record; the same is wholly govern....
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....liable to be set aside. 12. The Ld. AR for Revenue relied upon the decision of the Tribunal in the case of M/s. Laxmi Enterprises (supra) in which the Tribunal upheld the charge of undervaluation and demand for differential duty. In the said decision, Tribunal overruled the objection of the appellant in connection with Section 138C, by holding that the documents printedout from laptop will be admissible as evidence in view of the fact that the truth of such documents stand admitted by the proprietor in his statement. We have gone through the said decision of the Tribunal and we note that the judgment of the Hon'ble Supreme Court in the case of Anvar P.V. (supra) has not been cited and was never brought to the notice of the Bench. Consequently, we are of the view that the decision in the case of Laxmi Enterprises is not applicable to the facts of the present case. 13. It is submitted by the Ld. Counsel for the appellant that the adjudicating authority had not examined the witnesses, as per the provisions of Section 138B of the Act, 1962. He has relied upon the decision of Hon'ble Delhi High Court, in the case of J&K Cigaratte v. Collector of Customs - 2009....
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....or accuracy of the value declared for the imported goods. It envisages a two-step verification and examination exercise. At the first instance, the proper officer must ask and call upon the importer to furnish further information including documents to justify the declared transactional value. The proper officer may thereafter accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on 'certain reasons' raise doubts about the truth or accuracy of declared value. 'Certain reasons' would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture....
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....n clauses (a) to (f) in clause (iii) of the Explanation. (g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the 'reason to doubt' exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instan....
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....must record 'certain reasons' specified in (a) to (f) or similar grounds in writing at the second stage before he proceeds to discard the declared value and decides to determine the same by proceeding sequentially in accordance with Rules 4 to 9 of the 2007 Rules. It refers to a doubt which the proper officer possesses even after the importer has been asked to furnish further information including documents and evidence during the preliminary enquiry to clear his doubt about the truth and accuracy of the value declared. Therefore, there has to be a preliminary enquiry by the proper officer in which the importer must be given an opportunity for clarification of the doubts of the officer by furnishing of documents and evidence as to the accuracy or truth of the value declared. It is only in case where the doubt of the proper officer persists after conducting examination of information including documents or on account of non-furnishing of information that the procedure for further investigation and determination of value in terms of Rules 4 to 9 would come into operation and would be applicable. Reasonable doubt will exist if the doubt is reasonable and for 'certain reasons' and not ....
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....neous commodity and therefore, cannot be evaluated on the basis of the samples or lab testing. Further, the order holds that it was very difficult to find any identical/similar goods imported in India having same chemical and physical composition and that the values of aluminium scrap identical/similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared in the bill of entry. We have also elaborated and explained the legal position with reference to Rule 12 of the 2007 Rules. 24. Therefore, in the facts and circumstances of the present c....
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....w cause notice the department has taken shelter of the decision of Hon'ble Division Bench of Kolkata High Court wherein liberty has been granted to the Department to take action as per law. We are in agreement with the submissions made by the learned Advocate that the right course would have been to file appeal against assessment order before Commissioner (Appeals) and contest the case later on issuing of new show cause notice on the identical similar ground in terms of the Customs Act. One show cause notice has been quashed another show cause notice cannot be issued on the same ground. In holding so, we place reliance on the Hon'ble Supreme Court decision in the case of Caprihans India Ltd. Vs. Commissioner of Central Excise, Surat - 2015 (324) ELT 8 (SC), wherein at para 3 and 4 it is held as under: "3. We are of the opinion that the present appeal warrants to be allowed only on the ground that the impugned show cause notice was time barred and it was not a case where the Revenue could invoke the provisions of proviso to Section 11A of the Central Excise Act and take benefit of the extended period of limitation. From the facts noted above, it becomes clear that the Depar....
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....& B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in [2003 (2) SCALE 390], the question was whether the extended period of limitation could be invoked where the Department has earlier issued show cause notices in respect of the same subject-matter. It has been held that in such circumstances, it could not be said that there was any wilful suppression or mis-statement and that therefore, the extended period under Section 11A could not be invoked. 5. In our view, the principles laid down in above case fully apply here. As earlier proceedings in respect of same subject matter were pending adjudication it could not be said that there was any suppression and the extended period under Section 11A was not available. 7. It must also be mentioned that as there is no suppression, penalty cannot be imposed." 24. Accordingly, we are of the view that the Department could not have issued the second show cause notice to the appellant for enhancing the valuation based on the data available in the computer printout recovered from M/s Abhishekh and Shree Abhishek India (supra) which we have legally held to be in inappropriate and illegal in terms of Section 13....