TaxTMI 
TaxTMI 
2023 (8) TMI 265
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....0 and 50020010. Covering these imports, invoices were raised by M/s. Oingdao Yijia E.T.I.I./E Co., Ltd., Qingdao, China, K-Sun International Trade Co, Limited, Hongkong, M/s. Guangdong Silique International Group Gold Silk Co. Ltd., Guangzhou, China and M/s. Avanti Trading Co. Ltd., Jordan, Kowloon, Hong Kong with recorded unit price and declared country of origin as shown in the table below: SL. NO. Bill of Entry No & Date Value decl. USD Country of Origin 1 795925/ 03.03.2011 795926/ 03.03.2011 797816/ 04.03.2011 30/Kg China 2 3274284/ 21.04.2011 3325340/ 26.04.2011 21/kg Vietnam 3 732617/ 29.12.2010 771868/ 07.02.2011 768972/ 03.02.2011 21 & 21.35/kg Vietnam 4 731809/ 28.12.2010 15.30/kg Uzbekistan 5 722015/17.12.2010 723260/20.12.2010 21/kg Vietnam 3. As the Revenue noticed the contemporaneous import of same goods of same description were assessed at higher values and on the presumption that the importer had undervalued the goods to evade payment of appropriate duty the importer was requested to justify the values declared. Aggrieved by the above, the importer filed W.P No. 1879 of 2011, 3325 of 2011, 33....
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....r the purpose of assessment of duty. Similarly identical goods were imported for USD 40(CIF) per kg from China, the value of USD 40(CIF) per kg was to be adopted under Rule 4 of CVR, 2007 for the subject goods for the purpose of assessment of duty and similarly identical goods were imported for USD 28.50(CIF) per kg from Uzbekistan, the value of USD 28.5(CIF) per kg was to be adopted under Rule 4 of CVR, 2007 for the subject goods for the purpose of assessment of duty. 8. Based on the contemporaneous prices, the assessments were finalized by issuance of Orders- in- Original where in the values were arrived at as detailed in table below : O- in-O Bill of Entry No. & Date Actual Ass. value Declared Ass. Value Duty on Enhanced Value Declared Duty Short Payment of Duty Fine amt. In Rs. Penalty Amt. in Rs. 18037/12 795925/ 03.03.2011 795926/ 03.03.2011 797816/ 04.03.2011 87,97,210 77,29,692 97,80,705 65,97,908 57,97,269 73,35,529 4,53,056 3,98,079 5,03,706 3,39,792 2,98,559 3,77,780 1,13,264 99,520 1,25,927 2,00,000 1,00,000 18040/12 3274284/ 21.04.2011 3325340/ 26.04.2011 39,81,390 40,98,489 28,34,210 29,17,568 ....
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....as not imported. The details are as shown in table below:- O-in-O Nos. Bill of Entry No. & Date Contract No. & Date Name of Supplier Quantity In Kgs. Value decl. USD Re-determined @ USD 18044/12 722015/ 17.12.10 723260/ 20.12.10 10ZS2255 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18041/12 732617/ 29.12.10 768972/ 03.02.11 10ZS2255 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18043/12 731809/ 28.12.10 Avanti/005/10 02.09.10 M/s Avanti Trading Co. Ltd. 1,00,000 15.3 Per Kg 28.5 Per Kg 18040/12 3274284/ 21.04.11 3325340/ 26.04.11 10ZS2255 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18037/12 795925/ 03.03.11 795926/ 03.03.11 797816/ 04.03.11 2010FD 091778 25.05.10 M/s. Guangdong Silique Internatinal Group Goldsilk Co. Ltd., 3,00,000 ....
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....ng table will make it amply clear about the contemporaneous import prices for import of silk from Uzbekistan origin through Chennai port at the relevant time. Bill of Entry No. and Date Importer name Value declared /accepted by Department 516453/20.05.2012 Mahalakshmi Silk Trading 13.00 $ per kg. 521894/26.05.2012 Kaveri Silk & Jute P. Ltd. 14.10 $ per kg. 528258/02.06.2010 Mahalakshmi Silk Trading 13.00 $ per kg. 553892/30.06.2010 Mahalakshmi Silk Trading 13.00 $ per kg. 617198/03.09.2010 Kaveri Silk & Jute P. Ltd. 14.10 $ per kg. 633933/20.09.2010 Kaveri Silk & Jute P. Ltd. 14.10 $ per kg. 696414/22.11.2010 Kaveri Silk & Jute P. Ltd. 13.75 $ per kg. 704225/30.11.2010 Kaveri Silk & Jute P. Ltd. 13.75 $ per kg. 11.4 The importer have contracted for import of huge quantity of silk and so the department's reliance on the Bill of Entry No. 699388 dated 25.11.2010 as mentioned in the Show Cause Notice for a value at $ 28.50 cannot be considered relevant as the quantity and quality of the imports are different. 11.5 There is no allegation in the Show Cause Notice that there was any flow of money i....
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....Industries Ltd. [2008-TIOL-1580-CESTAT-MUM] wherein the Hon'ble Tribunal Mumbai held that:- "5. After hearing both sides and perusal of case records and the cited case laws, we find that the appellant have imported goods of Chinese origin from traders in U.A.E. Ordinarily the price of Chinese goods brought from U.A.E. should be more than goods imported directly on account of the traders margin and higher freight compared to similar goods imported from Chine directly. On the contrary, the price declared is equivalent to US $ 500 only as against contemporaneous imports of comparable goods imported from China in the price range of US $1860 to US $ 1950. It is not the case of the appellants that the impugned goods are akin to the kind of goods dealt in the case of Eicher Tractors (supra) where 77% discount was allowed by the manufacturer on one time sale of five years old sock. As such, the present appeals are clearly distinguishable from the case dealt in Eicher Tractors (supra). Moreover, the decision of the three Member Bench of the Hon'ble Supreme Court in the case of Rajkumar Knitting Mills (supra) interpreting Section 14(1) of the Customs Act, 1962 is binding on us in vi....
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....the simple reason that the transaction value method may not be proper in all cases and the customs authorities cannot be forced to accept the declared value in every case notwithstanding how ridiculously low these are. It may also not be possible in every doubtful case for the customs officers to establish payments made over and above the invoice price without information from the originating and intermediate countries which may not always be forthcoming. When the extra payments can be established, the transaction value method itself can be used, otherwise one of the other methods can be used. Therefore, the precedent decisions of the Tribunal cited by the learned SDR approving valuation on the basis of comparable value of contemporaneous imports are sound and the same fully support the basis of valuation adopted in this case. Moreover, the different methods of valuation, whether based on transaction value, or comparable value (of identical/similar goods), or deducting value based on resale price, or computed value based on cost and profit etc, are designed to arrive at an equitable customs value for the purpose of charging customs duty. The importers can not have a grievance so lo....
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....ontract is the relevant date. We are unable to agree. The words "ordinarily sold or offered for sale" have to be read along with the words which precede and the words that follow these words. If thus read these words mean that for the purpose of assessing the value it is necessary to ascertain the price at which the said or like goods are sold or offered for sale for delivery at the time and place is importation and exportation in the cases of international trade. The words "ordinarily sold or offered for sale" do not refer to the contract between the supplier and the importer, but to the prevailing price in the market on the date of importation or exportation. We are, therefore, unable to accept the contention urged by Shri Mehta that the Tribunal has committed any error in proceeding on the basis that value has to be assessed according to the price as on the date of importation and not on the basis of the date of contract. 8. Shri Mehta has placed reliance on the decision of the Calcutta High Court in Sneha Traders (Pvt.) Ltd. v. Collector of Customs, 1992 (60) E.L.T. 43 (Cal.), wherein the learned judges have expressed the view that assessable value has to be determined....
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....id or payable as costs and services like commission, brokerage, engineering, design work, cost of transportation, etc., as may be specified in the rules made in this behalf. These amounts are to be added to the declared transactional value. Accordingly, in terms of Rule 10 of the 2007 Rules, the value and price of costs and services are added to the price actually paid or payable for the imported goods for determining the transaction value. 10. Sub-section (2) of Section 14 is a non obstante provision, which applies notwithstanding sub-section (1), i.e. when the Board has issued a notification in the Official Gazette fixing tariff values for any class of imported or exported goods. The Board has been authorised to issue notifications under Section 14(2) of the Act when it is satisfied that it is necessary or expedient. Thus, whenever tariff has been fixed vide notification issued by the Board under Section 14(2) of the Act, then notwithstanding the transactional value of the imported goods under subsection (1) to Section 14 of the Act, as per sub-section (2) to Section 14 of the Act the customs duty is payable as per the tariff value so fixed. In the present case, the Boar....
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....deals with cases when the buyer and seller are related. We would not dilate on the said sub-rule for this is not required for the purpose of the present decision. As per sub-rule (4), where the value cannot be determined under sub-rule (1) to Rule 3, the transaction is to be valued by step wise applying Rules 4 to 9. Rule 4 deals with transaction value based on identical goods. Rule 5 deals with transaction value based on similar goods. Rule 6 deals with the determination of value where the transactional value cannot be determined under Rules 3, 4 and 5. Rules 7 and 8 deal with deductive value and computed value respectively. Rule 9 prescribes the residual method for computing the transaction value. What is important to note is that Rules 4 to 9 are subject to the provisions of Rule 3 thereby giving primacy to Rule 3 which in turn gives primacy to Rule 12 of the 2007 Rules. 14. Rule 12, which as noticed above enjoys primacy and pivotal position, applies where the proper officer has reason to doubt the truth 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 ....
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.... of Rule 12, therefore, can be summarised as under : (a) The proper officer should have reasonable doubt as to the transactional value on account of truth or accuracy of the value declared in relation to the imported goods. (b) Proper officer must ask the importer of such goods further information which may include documents or evidence; (c) On receiving such information or in the absence of response from the importer, the proper officer has to apply his mind and decide whether or not reasonable doubt as to the truth or accuracy of the value so declared persists. (d) When the proper officer does not have reasonable doubt, the goods are cleared on the declared value. (e) When the doubt persists, sub-rule (1) to Rule 3 is not applicable and transaction value is determined in terms of Rules 4 to 9 of the 2007 Rules. (f) The proper officer can raise doubts as to the truth or accuracy of the declared value on 'certain reasons' which could include the grounds specified in 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 importe....
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....s under : "24. Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than the truth. To constitute reasonable doubt, it must be free from an overemotional response. Doubts must be actual and substantial doubts as to the guilt of the accused persons arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an imaginary, trivial or a merely possible doubt; but a fair doubt based upon reason and common sense. It must grow out of the evidence in the case." Proof beyond 'reasonable doubt' is certainly not the requirement under proviso to Section 14 of the Act and Rule 12 of the 2007 Rules, albeit the above quote draws a distinction between a simple doubt and a doubt which is reasonable. In the context of the proviso to Section 14 read with Rule 12 and clause (iii) of Explanation to the 2007 Rules, the doubt must be reasonable and based on 'certain reasons'. The proper officer 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 t....
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....iod where the assessed prices were noticed to be higher in comparison to the declared prices by the respondent. The main ground of the Revenue is that the price of silk tends to vary being a price sensitive commodity and the declared value of imported goods under a contract may not represent the correct transaction value being spread over a long period. The second contention is that the importer though has contracted for import of huge quantities of raw silk from these suppliers but has failed in importing the contracted quantities thus contravening the conditions of the contract. The contracts are to be treated as invalid and extraneous to the transactions. 17. On perusal of the order of the lower adjudicating authority, it is clear that reliance is placed on the values of imports effected in certain Bills of Entry during the relevant time mainly depending upon general description of the goods and the country of origin. Crucial commercial details of these consignments on which reliance is placed to determine contemporaneous prices as to the type, quality, quantity imported whether under any contract or whether any advance paid or whether the supply from the manufacturer or trad....
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....ejecting the transaction value is on account of noticing higher values of the contemporaneous imports. However, while determining a particular import to be considered as a contemporaneous import for enhancement, it is necessary to match all commercial level details like quality, quantity, type, whether under a contract, physical characteristics, brand, reputation, country of origin, time of import, stock lot sale, manufacturers sale, etc. This is a necessary requirement. Merely giving the details of the Bills of Entry may be of identical / similar goods or of same country of origin and may be at the same time would not be sufficient because the transaction values are affected by various commercial factors like the quantity imported, the quality differences, reputation and relationship between the supplier and the importer, whether any advance paid or not, etc. In the absence of all the details of the imports whose values have been relied upon as contemporaneous prices by the lower adjudicating authority it is not possible to decide whether the decision of enhancement is reasonable or whether it is in accordance with the valuation provisions or not. 22. The impugned goods in all ....