TaxTMI 
TaxTMI 
2022 (7) TMI 152
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....t (CIU) as per the instructions contained in letter dated 23.09.2009. The Bill of Entry in question was provisionally assessed for want of the relevant import documents. During the course of investigation, the appellant had submitted the detailed import documents including the certificate and catalogue of the imported yacht. The Customs department had recorded statement of various persons under Section 108 of the Customs Act, 1962 in respect of importation of the subject goods. Based on detailed investigation into the matter, the department had concluded that the importer (the appellant herein) had mis-declared the description of the imported goods in respect of its model as well as actual value, which resulted in evasion of legitimate customs duty payable on higher import price for the actually imported goods i.e. yacht of model 'Azimut 68 Evolution', instead of model 'Azimut68', as declared in the subject Bill of Entry. Further, it had also been concluded that the declared import price of Euro 1400000.00 does not seem to be actual value for levying of customs duty inasmuch as the said price had been arrived at by the importer-appellant after availing/claiming discount of ap....
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....ct, 1962. (ii) Re-determined the value of Yacht at Rs.17,74,67,817/- taking the transaction value of Euro 2485300.00 CIF on the basis of initial price quoted by supplier for Azimut 68/156 2 x MAN 1360 HP of Euro 2410300.00 FOB and Freight+ Insurance of Euro 75000.00 under Rule 9 of the Customs Valuation Rules, 2007. (iii) Determined the value of 'V-SAT connection with dish antenna' which has not been declared in the subject Import Invoice and the Bill of Entry as Rs.14,78,125/- under the provisions of Rule 9 of the Customs Valuation Rules, 2007 at the CIF Value of Euro 20700.00 which was the quoted price of these goods by supplier manufacturer M/s. Azimut Benetti SPA, Italy and accepted by the importer in its purchase order. (iv) Confirmed and demanded the total differential duty amounting to Rs.1, 91, 14,774/- (Rupees One Crore Ninety One Lakhs Fourteen Thousands Seven Hundred Seventy Four only) under proviso to then Section 28(1) of the Customs Act, 1962 (now section 28(4) of the Customs Act, 1962) along with due interest under erstwhile Section 11AB ibid (now section 28AA of the Customs Act, 1962). (v) Ordered for appropriation of an amount of Rs.76,00,000/- already paid....
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.... the Provisional Duty (PD) Bond and Bank Guarantee of Rs.50 Lakhs executed by the importer for the provisional release of the subject vessel is adjusted towards differential customs duty, applicable interest, fine and penalty. 2.3. Learned Commissioner, inter alia, observed that the goods declared and goods imported by the appellants are two different products inasmuch as the value declared by the importer in the Bill of Entry was for the yacht 'Azimut 68' and not of the imported product i.e. 'Azimut 68 Evolution' ; thus, there is mis-declaration of the goods and therefore, value declared under Section 14 ibid by the importer cannot be considered as the transaction value and as such, the same is liable to be rejected as per Rule 12 of the Customs Valuation Rules, 2007; arguments placed by the appellant that during the relevant period stating that there was sudden dip of price in ship building industry; therefore, the importer was able to negotiate a much lower price were not acceptable as the same was just a verbal one and no documentary evidence for the same was placed by the importer; there is 'connivance' between the overseas manufacturer and the appellant, which resulted in mi....
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....acht. * It was incorrect to observe that the argument on deep of in international prices was only the oral argument and there was no documentary evidence as necessary documents were also supplied. * It was erroneous to find that the initial price list was the primary evidence; Learned Commissioner fails to understand the market dynamics of negotiation of the price initially quoted; there is no whisper of extra commercial consideration if any, by the Department; no justification given for rejection of declared value under section 12 ibid and therefore, no ground for redetermination of the value under Rule 9 of Custom Valuation Rules, 2007. * It is in correct to assess the V-Sat separately; the director of the appellant as categorically stated that the same was purchase in India and therefore, it is not important goods. * No penalty is imposable as no malafide conduct for evident on the part of the company and the individuals. 4. On the other hand, Shri R.K. Dwivedy, learned A.R. appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that since the appellants are instrumental in mis-declaration of the goods and connived with th....
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....g the phrase "E' or 'Evolution' in the name of the model of yacht imported by them, but such submission was brushed aside in the impugned order, without assigning any plausible reason. Thus, it is clear that all material facts have been declared to the department. Particularly, the capacity '2xMAN 1360mHP' applicable for evolution type, was specifically indicated in the bill of entry. Mere non-mentioning of the words/Phrase 'E' or 'Evolution' would in no way constitute the suppression of a material fact more so, the details are available in the documents submitted along with the Bill of Entry. Thus, under the circumstances of the case and more particularly, the documentary evidences submitted by the appellant, we have no hesitation in holding that non-mentioning the code or word 'E' or 'Evolution' in the above documents is inconsequential and had no effect on the aspect of valuation of imported goods for the purpose of assessment of the correct duty liability. Thus, in our considered opinion, there is no question of any mis-declaration on the part of the appellants and that they have not connived with the overseas manufacturer in defrauding the legitimate dues of the government, as....
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.... where the declared value is rejected, then the value shall be determined by proceeding subsequently in accordance with rules 4 to 9 ibid. 9. In this case, the facts are not in dispute that the EURO 1400000.00 paid by the appellant to the overseas supplier of goods is full and final in respect of the importation of the subject goods and that over and above such amount; no additional payments were made by the appellant for such goods. Further, it is an admitted fact on record that the payment was made by the appellant through approved banking channel and to such effect, had submitted the accounts statement and other particulars before the department at the time of filing the Bill of Entry. Furthermore, it is also an admitted fact that the appellant is no way related in any manner with the overseas supplier of goods. Thus, under such circumstances, the valuation provisions contained in Section 14 ibid read with Rule 3(1) ibid have the application in this case for determination of the transaction value and the provisions of Rule 12 ibid read with Rule 9 ibid would have no application for rejection of the declared value and redetermination of the same by resorting to the provisi....
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....2. Benetti Italy 3. Princess, UK; * They have received offers for new as well as pre-owned motor yachts where in the offers for pre-owned models were not having the quality equivalent to the price at which they were being offered; among the offers received for new yachts, they have found Mix Feretti was under financial troubles and up for sale and the price offered by M/s. Princess was high; Ms. Azimut response was positive for new and willing to supply the yacht in shorter time; * They received initial price list showing the total price of the boat yacht) at Euro 2,410,300.00 FOB (including accessories, transport to savona and launching and rigging charges); they have started negotiating with them and when M/s. Azimut found that we were seriously interested in the yacht they started negotiation with us and made an initial offer vide Proforma invoice no. Azimut/006/2008-09 dated 23/03/2009 for a value of Euro 1,724,600/-(CIF) (CIF price of Euro 1,400,000 plus Accessories of Euro 324,600); the components of transport to Savona Eur. 28,850.00; launching and rigging charges Euro 14,850.00 and insurance and freight to Mumbai Euro 75,000.00; all these elements totaling to Euro 11070....
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....ease of the purchase order was handled by him on behalf of Ms. My dreams Properties Pvt. Ltd, however, the financial transactions had been carried out by Shri Vinay P. Karve, Director of Ms. My dreams Properties Pvt. Ltd". * On being asked as to whether they have paid any commission brokerage to any agent in India or abroad in the purchase of the said yacht, he replied that they have not paid any commission/brokerage to any agent in India or abroad in the purchase of the yacht in question" 11. From the facts of the case, the records and submissions of the appellant that it was categorically indicated in the import documents that the impugned yacht was of an engine capacity of 1360 HP which pertains to evolution category. Therefore, the fact of finding the same from the ship manual present in the ship has no bearing on the facts of the case. This aspect has been totally ignored by the learned adjudicating authority. Moreover, the adjudicating authority has rejected the declared price on the basis of the assumption that the initial quote was the finally agreed price ignoring totally the commercial practice of negotiation and discounting. We find from the statement of Shri Manivann....
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....price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4(2). As per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value". 12.2 Hon'ble Apex Court in case of Commissioner of Customs, Calcutta vs. South India Television P. Ltd., reported in MANU/SC/2966/2007 : 2007 (214) ELT 3 (SC) wherein, by paragraphs 6, 7 and 8 it has been laid down as under:- "6. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Se....
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....nt 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(1A) 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. Under-valuation has to be proved. If the charge of undervaluation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries; collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under-valuation, if the Department relies on declaration made in th....
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.... undervaluation is not established as held by this tribunal in Kelvin Infotech Pvt. Ltd. (supra). 12.4 In the case of M/s Century Metal Recycling Pvt. Ltd. V. Union of India and Ors. [2019(367) ELT 1(S.C.)], Hon'ble Supreme Court held that - "a doubt to justify detailed enquiry under the proviso to Section 14 read with Rule 12 should not be based on initial apprehension, be imaginary or a mere prediction on grounds and material in the form of 'certain reasons' and not mere ipse dixit. Subjecting imports to enquiry on mere suspicion because one is distrustful and unsure, without reasonable and certain reasons, would be contrary to the scheme and purpose behind the provisions which ensure quick and expeditious clearance of goods." 12.5 In the case of NPT Papers Pvt. Ltd & Others V. C. C., Mundra & Others , (MANU/CS/0120/2021), the Tribunal by following the judgments in Bayer India Ltd. V. Commissioner Of Customs, Mumbai [2006 (198) ELT 240], upheld by Hon'ble Supreme Court [2015 (324) ELT 17 SC] and Tele Brands (India) Pvt. Ltd. V. Commissioner Of Customs (Import) Mumbai, reported in [2016 (336) ELT 97 (Tri. Mum.)], held that there should be evidence on record to show that the im....