TaxTMI 
TaxTMI 
2022 (8) TMI 113
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....f Shri Suryaprakash Agarwal proprietor of the respondents, Shri Gopal Singh manager sales of M/s. Shri Ram Granite, Shri Vishal Vora a private person and others were recorded; on conclusion of the investigation it was alleged that the respondents have undervalued the imported diamonds segments and saw blanks; invoices showing lesser value were prepared by the supplier for submitting to the customs; difference in the value and the actual value was being limited to the overseas suppliers through illegal channels; M/s Shambhav Rocks, another importer also imported from the same overseas suppliers and the case of undervaluation was registered against the importer by DRI, Bangalore; M/s Shri Ram Granite and M/s Stones Shippers Ltd. have imported identical goods at higher price which can be used for re-determining the value of the goods imported by the respondents. On completion of the investigation the respondents were issued a show cause notice dated 13.03.2019 seeking to confiscate the imported goods; re-determination of the declared value of the goods imported by the respondents from 261,71,24,488/- to 414,03,08,884/-; recovery of differential duty of Rs. 35,36,19,477/- along with in....
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....) E.L.T. 1546(S.C.), reasons identified in the SCN are to be joined together like dots and this provides adequate material for retaining the reasonable doubt about the truthfulness of the values declared to Customs; Adjudicating authority failed to identify earlier incident of, use of parallel invoicing established and admitted, undervaluation of the imports of the item 'Industrial Diamond Segment/Cutter' from overseas supplier M/s. Fujian Wanlong Diamond Tools Co Ltd. (same as in the present case); the importer approached Settlement Commission; Adjudicating authority failed to take note of Settlement Commission's order dated 24.03.2014; Adjudicating authority has grossly erred in rejecting the parallel invoice retrieved in the present investigation. 3.1. He submits that parallel invoices both with the No. WX 143069-2 dated 21.11.2014, from the same China based supplier M/s. HXF Saw Co. Ltd, both showing M/s. Granite India as consignee and declared to be Commercial Invoice, one showing the value of USD 80100 and the second showing USD 44152 were found; the lower value invoice was used by the importer to file the Bill of Entry No. 7966010 dated 12.01.15; Adjudicatin....
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....nite, Jalore; Adjudicating authority rejected the value of goods, which are similar, imported by M/s Shree Ram Granites from the same supplier M/s Fujian Wanglong Diamond Tool Co. Ltd, on the superficial reason that description mentioned on all invoices and Bills of entry filed by the importer M/s Shree Ram Granite are "Consumable for Granite Cutting & Polishing Machines" with CTH 84649000 whereas the respondents have been importing the impugned goods "Segments and Blades"; the Adjudicating authority ignored the statement dated 18.12.2018, of Shri Gopal Singh, Sales Operation Manager of M/s Shree Ram Granite, Jalore, Rajasthan, wherein he confirmed that the imported goods were segments. 3.4. He also submits that the Adjudicating authority failed to appreciate inconsistencies in the importer's statement for doubting the truthfulness of the declared values; Shri S.P. Agarwal stated that number of visits to china was to ensure quality of the product and discounts; no such discounting factor due to supply of inferior quality was reflected in any of the invoices; Shri S.P. Agarwal further stated that the value of the goods has not changed since 2012 and that they were impor....
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....uoted the price of per piece whereas the invoice submitted quoted price per kg; whereas the invoice submitted to customs had all the details of bank, swift code, beneficiary address and account no. etc., a so called parallel invoice did not have any such particulars; therefore, the adjudicating authority has rightly held that the so called parallel invoice was in the nature of a Proforma invoice; there was no evidence of any payment over and above the price declared in the invoice submitted to the customs. He submits that though the department was in the possession of a so called parallel invoice, did not raise any objection and cleared the live consignments at the rate of USD 2 per kg; even the so called parallel invoice was only in respect of one bill of entry dated 12.01.2015 and in respect of all other imports of saw blanks from different supplier there is no such parallel invoice; it is pertaining to note that even for the period subsequent to the show cause notice department has assess the imported saw blanks at the rates ranging from USD 1.449 - USD 2.30 per kg. 5. Learned Counsel for the respondent submits that in respect of "Segments (MS with synthetic diamond pow....
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....d by Actual are not on the same commercial level as bulk imports by a Trader and that therefore, the two are incomparable and the price of the latter cannot be enhanced by comparison with the price of the former. He submits that Rule 4 (b) of the Customs Valuation Rules 2007, clearly provides that comparison can only be made with identical goods which are at the same commercial level and in substantially the same quantity as the goods being valued; in the instant case, the imports by the said Actual users are neither at the same commercial level nor in comparable quantity as the imports of the Respondent. 7. Learned Counsel submits that the Hon'ble Supreme Court in the case of Basant Industries -1996 (81) ELT 195 (SC) held that by mere comparison of two invoices, without anything more, it would not be correct to proceed on the premise that there is undervaluation; it is a matter of common knowledge that price which is offered to an old customer may be different from a price which same supplier offers to a totally new customer; in the present case, the Respondent has been over the years regularly importing the goods in question from the supplier in bulk quantities; therefor....
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....st the respondents is substantiated by the evidence that has been put forth by the investigation. We find that, as observed in the impugned order, are as follows. • Parallel set of invoices (both having No WX 143069 -2 and both dated 29.11.2014 from the supplier M/s. HXF Saw co Ltd) retrieved from the e-mail id of Shri SP Agarwal; one invoice showing the value of 80100 $and the second one 44152$ (filed with Bill of Entry No. 7966010 dated 12.01 15). • invoices showing contemporaneous imports by M/s Stone shippers Ltd, Kota, Rajasthan and M/s. Shree Ram Granite, Mumbai; invoices are for import of segments from same suppliers M/s. Fujian Quanzhou Wanglong Stone Co Ltd., China and Fujian Wanlong Diamond Tools, Co Ltd China at higher value of USD 21.75/Kg and USD 30/Kg respectively as against USD 9/Kg declared by the noticee; invoices submitted by these importers had signature of the supplier whereas the invoices submitted by the notice at the time of imports did not; • Imports of segments at a higher value by M/s. Sambhav rocks Ltd, from the same supplier, as evidenced during investigation conducted by DRI, Bangalore; • A case of, un....
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....dervaluation and therefore the invoice value is required be accepted and the transaction value itself and hence could not have been discarded, as held by various judgements of the Hon'ble Supreme Court like CCE Vs Sanjivani Non- Ferrous Trading Pvt. Ltd. MANU/SC/1456/2018 : (2019) 2 SCC 378 and CC Vs South India Television Pvt. Ltd. MANU/SC/2966/2007 : (2007) 6 SCC 373. We find that there is no allegation or finding that the buyer and seller being related or of any extra payment to the supplier beyond the normal authorized banking channels and thus undervaluation is not established as held by this tribunal in Kelvin Infotech Pvt. Ltd. (supra). 12. On the issue of considering the value at which M/s Shree Ram Granites and others imported the goods, Learned Commissioner finds that the description mentioned on all the invoices and bills of entry are 'consumables for granite cutting & polishing machines with CTH 84649000, where as the respondents were importing goods under Chapter; this difference was not noticed by the investigation team; M/s Shree Ram Granites is a 100% EOU and has not paid import duty on these item; the volume of imports by Shree Ram Granites are mea....
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....n in a logical manner and on the basis of legally tenable reasons. Learned commissioner has rightly found that the imports of others cannot be considered as contemporaneous prices for valuing the imports in question by the respondents. 15. We find that in the case of Global Industries Vs. Commissioner of Customs, Cochin [2011(272)ELT724 (Tri. bang)] it was held that in the absence of data relating to the imports of goods of same quality, quantity and commercial level with higher transaction value, contemporaneous import cannot be accepted. In this instant case, Revenue has not placed any data to evidence contemporaneous imports; rather the Adjudicating Authority found that there are no contemporaneous imports. We find that Apex Court, in the case of Basant Industries 1996 (81) ELT 195 (SC) held that 3. Ordinarily, this Court would not like to interfere in a matter of price fixation, but at the same time it seems necessary to impress upon the Department that by a mere comparison of two invoices without anything more, it may not be correct to proceed on the premise that there is undervaluation. The relationship between the supplier and importer has also to be kept i....
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....at the findings of the commissioner are correct. Antecedents cannot be an evidence for the alleged undervaluation of the goods. At best antecedents may be a reason for creating a suspicion and be a reason for causing an enquiry or Investigation. Mere propensity of the respondent is not enough proof of undervaluation. Therefore, we hold that antecedents of an importer or their propensity to violations cannot be in itself an evidence prove a contravention in a completely different proceedings. 19. Regarding the evidence relied upon in the Show Cause Notice on the V-Chat by a private person with the supplier, learned Commissioner observed that he refrains from discussing the evidence gathered by a private investigator by the name Vishal Vora as it is not legally sustainable and such engagement is not permitted under any provision of the Customs Act, 1962 or any rule made under it; the Government of India is sovereign in the matter of revenue and depends upon its own personnel for gathering information and intelligence unless a private person approaches as informer as per established procedure for giving information, which is not the case here; the mode and manner of his worki....