TaxTMI 
TaxTMI 
TaxTMI 
2020 (6) TMI 735
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..... 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 said guideline. He submits that this tribunal in the appella....
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....om 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 importation were found to be zinc ash and permitted to be cleared after test....
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.... 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 perused the same. This has been overlooked by the adjudicating authority. We are of the....
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....ined 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 misdeclaration in respect of valuation of goods or description or where transaction value of the goods declared is....
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.... 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 contemporaneous material relied upon by the revenue for enhancing the price declared by them in the bills of entry, the Tr....
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....tion 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 that enhancement of the value is not justified in the present case and accordingly set aside the impugned order and allow the appeal. The above Tribunal judgment stands upheld....
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.... 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 Supreme Court held that the availability of evidence of contemporaneous import of the same goods obviously periods the best guide for determination of value of the import of goods. But in the absence of evidence of contemporaneous import, reference to foreign journals for finding out the....
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....ements 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, which showed price of Aluminium scrap as 80% of the LME price he had stated that the prevailing LME prices formed the basis of negotiation and that normally, the prices of Aluminium scrap were negotiated at 80% of the LME. However in his statement dated 23.04.2007, he has stated that the import price of Aluminium Scra....
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....il 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 highly erroneous since it cannot be assumed that the cross examination of a person would not bring any material not already available. Our views are based upon the judgment of the Hon'ble apex court in case of Andaman Timber Industries - 2015 (324) ELT 641 (SC) , wherein the apex court held as under : "6. According to u....
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....ibunal 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 proceedings which can have adverse consequence for them. The Adjudicating authority had allowed cross examination of indentors and even they were also issued notice, none of the indentor was made available for cross examination. In such circumstances when these persons could not be produced for cross examination, their statements could not have been relied upon. ....
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....espect 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, Shri Ram Agro Chemicals (P) Ltd vs UOI - 2009 (234) ELT 218 (P & H), CC vs L. Madanlal (Aluminium ) Ltd - 2010 (258) ELT 107, Karnataka Chemical IndusCorpn. Ltd vs CC - 2005 (183) ELT 207.The adjudicating authority also held that since the issue of non-payment of Additional duty was not raised at the time of assessment, hence cannot be raised i....
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....dings, 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 therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind. 5. As regard the issue on which the Learned Commissioner (Appeals) rejected the appeal that once the appellant have accepted the enhancement of the value at the time of rea....