TaxTMI 
TaxTMI 
2009 (5) TMI 12
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....foresaid order passed by the Tribunal, a fine of Rs. 5 lacs in lieu of confiscation of the goods and penalty of Rs. 10 lacs was imposed on the appellant firm, and also a penalty of Rs. 5 lacs imposed on Ratanlal under the provision of Section 112(a) of the Customs Act imposed by the Commissioner of Customs (Adjudication) was upheld. 2. The entire proceeding arises out of a contract of importation of cloves of the bulk quantity of 300 MTs at US Dollars 2600 PMT CIF, Mumbai. It was alleged that the appellants herein entered into a contract with M/s. Ketan Trading Company, Singapore on 23.11.2000 for import of cloves. The goods were described as `cloves-Zanzibar/Indonesia' meaning thereby cloves of Zanzibar/Indonesian origin of the bulk quantity of 300 MTs at US Dollars 2600 PMT CIF Mumbai. 3. The aforesaid contract dated 23.11.2000 for the above-mentioned quantity of cloves was registered with the Customs Department by the appellants in the course of which three bills of entry were filed by appellants for clearance of part shipment declaring the contract price as the invoice price. Again, for further imports seven more bills of entry were filed by the appellants in terms of the....
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.... November, 2000 and that he was having only a photocopy of the said contract. He stated that the international market price of cloves in the beginning of 2001 was only US Dollars 2900 to US Dollars 3000 and that in February, March-April the price went up to US Dollars 5000 depending upon the quality. As regards the invoice bearing No. 624/2K- 01 dated 7.2.2001 issued M/s. IJIM ASIA in the name of M/s. Ketan Trading Co. showing consignment of 24.538 MTs of cloves at the rate of US Dollars 5600, he stated that one consignment was imported by him under bill of entry dated 24.2.2001, which was the same consignment mentioned and shown against invoice dated 7.2.2001. 8. It was also stated that while seeking clearance the quantity declared was 23.488 MTs, but on actual examination the consignment was found to be in excess by 1.05 MTs confirming the correctness of the quantity mentioned as per invoice dated 7.2.2001 i.e. 24.538 MTs. 9. It was therefore submitted by the department that there is foolproof evidence to suggest undervaluation in the import of cloves by the appellant with intent to evade customs duty. A Show Cause Notice was issued by the Department on 27.2.2002 to which r....
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....reliance could and should be placed on the said document to arrive at a finding that in fact the appellant had supplied the aforesaid cloves for Ketan Trading Company at US Dollars 2600 PMT. He also submitted that the findings and conclusions arrived at by the Commissioner of Customs (Adjudication) as well as by the Tribunal are findings of fact and the same should not be interfered with by this Court. 15. In the light of the aforesaid submissions we have perused the documents on record. A perusal of the relevant documents would indicate that the issue that arises for our consideration is as to how the value of the goods, in question, was to be computed. In other words whether the price of goods at the time of computation should be the deciding factor in arriving at the value of the goods or it is the price agreed upon by the parties. 16. In order to substantiate the claims and the rejection of the said claims, reference was made to the provisions of Sections 14(1) (a) of the Customs Act, 1962 and Rule 4 and Rule 5 and Rule 10A of the Customs Valuation Rules, 1988. The said provisions being relevant, material part thereof are extracted herein below. Section 14: Valuatio....
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.... (iii) do not substantially affect the value of the goods; (f) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (g) no part of the proceeds of any subsequent resale,disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (h) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Rule 5. Transaction value of identical goods. -- (1)(a) Subject to the provisions of Rule 3 of these rules, 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. (b) In applying this rule, the transaction value of identical goods in a sale at the same commercial level and in substantially the same quantity as ....
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....valuation of goods for the purpose of assessment and inter alia provides that the value of any goods chargeable to duty of customs would be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other or one of them has no interest in the business of the other and the price is the sole consideration for the sale or offer for sale. By inserting sub-Section (1A) of Section 14 which was inserted with effect from 16.8.1988, it was provided that subject to the provisions of sub-Section (1) of Section 14, the price referred to in the sub-Section in respect of imported goods would be determined in accordance with the rules made in this behalf. 20. Further, Rule 4 deals with the transaction value which is required to be determined under aforesaid rule. Under Rule 4 of the Valuation Rules, the transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India. In accordance with the provisions of Rule 9, such transaction value is required t....
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....e Weekly Bulletin of Spices Market published by the Trade Information Services of the Spices Board of the Ministry of Commerce and Industry, Government of India indicated that the price of Indonesian cloves on 24.11.2000 was US$ 4765 PMT and that of Zanzibar cloves was US$ 4650 PMT. Such bulletin also indicates that by 23.12.2001 the price of Zanzibar cloves had reached Rs.6100/- PMT. The Public Ledger which is also considered as International Publication of Report indicates that the price of cloves in the international market on 27.11.2000 was US Dollars 4700 which reached US Dollars 6300 on 26.3.2001. 23. We are also satisfied with the records produced before us that the nature of business of M/s. Ketan Trading Co. is primarily dealing with sport goods and not cloves. There is also a reference of the document on record particularly the relevant bill of lading which indicates that cloves were imported by the appellants from IJIMASIA Pvt. Ltd. through M/s. Ketan Trading Co. at the price of US Dollars 5600 PMT through bill of entry dated 7.2.2001. The value of the said Zanzibar cloves were shown as US Dollars 5600 PMT. It has also come in evidence that 9.5648 MTs cloves of Indone....