TaxTMI 
TaxTMI 
TaxTMI 
2024 (3) TMI 698
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.... No. 50820 of 2020. 2. The imposition of penalty of Rs. 40 lakhs on the proprietor of Ajit Kumar Jain, proprietor of M/s. Vardhman Automobiles has been assailed in Customs Appeal No. 50821 of 2020. 3. The imposition of penalty of Rs. 40 lakhs on the proprietor of Ms. Aakruti Impex has been assailed in Customs Appeal No. 51111 of 2020. 4. The adjudication of the three show cause notices is described in the following chart: Sl. No. Date of show cause notice Allegation Differential Customs Duty Demand Impugned order 1. 24.01.2019 Mis-classification Rs. 1,05,657/- in respect of Bill of Entry No. 8337245 dated 27.01.2017 Drops the demand 2. 15.03.2019 Mis-classification Rs. 2,92,436/- in respect of Bill of Entry Nos. 8928322 dated 17.03.2017 and 8879961 dated 14.03.2017 Drops the demand 3. 29.05.2019 Mis-classification and Undervaluation Rs. 1,17,34,066/- in respect of 7 Bills of Entry (i) Drops the demand with respect to Classification. (ii) upholds the demand with respect to undervaluation. 5. The demand is based on the observation of the Audit that the imported goods i.e. items declared as „pre-sensitized positive offset aluminium plates‟ the impor....
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....biguous details of the modus operandi of the appellant firm to undervalue the subject imports and show the undisclosed over and above payments made in RMB/USD to the overseas suppliers; (vi) that apart from the payment of Rs. 4,03,24,796/- to Bocica, China and Bocica, Hong Kong through their bank accounts with HDFC bank and YES bank, the appellant also made payment of Rs. 4,35,81,595/- through unauthorized banking/non-banking channels which is within the exclusive knowledge of Sourabh Jain, his father Ajit Kumar Jain and the beneficial owner of the impugned goods Rakesh Lal Shah, proprietor of M/s Aakruti Impex; 9. Based on the entries found in the aforesaid documents, it was further alleged that the appellant had made a total payment of Rs. 8,39,06,391/- to the overseas suppliers, M/s Bocica China and M/s Bocica Hong Kong, against the subject import. It was, therefore, alleged that the appellant had mis-declared the value by submitting fake invoice, having less value than actual and thus the declared value was liable for rejection under rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007 the 2007 Valuation Rules read with section 14 of the Cus....
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.... (ii) The imported goods (CtCP) attract Anti-dumping duty and the declared value is comparable with the finding dated 15.05.2020 recorded by the designated authority in Anti-dumping matters; (iii) The notebook and diaries resumed from the residential premises are merely rough estimates/target discussions/rough profit and loss analysis having no evidentiary value; (iv) The declared transaction value is correct in terms of the 2007 Valuation Rules since no transactions other than by banks are made; and (v) The Principal Commissioner committed an error in passing the impugned order and considering the submissions made by the appellant. 14. Shri Dhanashekharan, learned special counsel appearing for the department made the following submissions: (i) The assessable values are based on the documents recovered during the investigation from the proprietor of the company Saurabh Jain and his father Ajit Kumar Jain; (ii) The appellant connived with the sole buyer of imported goods and resorted to gross undervaluation of goods imported to avoid payment of appropriate custom duty; (iii) The charge of undervaluation was proved with documentary evidence i.e notebooks and diaries with....
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....e in this behalf: Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on ....
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....lue after the said enquiry in consultation with the importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents." 20. Rule 3 of the 2007 Valuation Rules is also reproduced below: "Rule 3. Determination of the method of valuation.- (1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted:....
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.... of 3 USD per plate in September 2017. The average price works out to 2.52 USD. After adding the landing charges and customs duty, the value works out to Rs. 210/- per plate, which is comparable to Rs. 231/- per plate. The enhanced value, as proposed by the department, works out to Rs. 330/- per plate and if the applicable duties are added, it will work out to Rs. 423 per plate. This value is much higher than the value determined in the Final Finding Notification dated 15.05.2020. 24. It is, therefore, the contention of the learned counsel for the appellant that the value of USD 2.05 to USD 3 per plate as declared by the appellant and also assessed by the department in other matters is comparable. 25. These are important factors which have to be taken into consideration while examining the issue as to whether the entries in the notebook/ diaries can be considered for determining the transaction value. 26. Learned counsel for the appellant has submitted that the notebook/diaries resumed from the residential premises are merely rough estimates/target discussions/rough profit and loss analysis which have no evidentiary value. In this connection, learned counsel also pointed out tha....
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....he effect that entries made in the private note book cannot be considered as conclusive evidence unless the entries are fully corroborated. One such judgment of the Tribunal is in the case of CCE, Chennai v. Dhanavilas (Madras) Snuff Co. reported in 2003 (153) E.L.T. 437 (Tri. - Chennai) = 2003 (54) RLT 336. 30. Civil Appeal No. D8636 of 2004 filed by the Commissioner of Central Excise, Patna against the aforesaid order of the Tribunal in Woodmen Industries was dismissed by the Supreme Court on 18.09.2003 and the decision is reported in Commissioner vs. Woodmen Industries 2004 (170) E.L.T. A307 (S.C.). 31. What has been remarked by the Tribunal in connection with clandestine removal of goods will also apply for valuation under the Customs Act. 32. In the present case, the corroborative evidence, as noted above, indicates that the value mentioned by the appellant in the Bills of Entry is comparable to the assesseed value of the good imported by other importers at the same time. The value is also comparable to the value determined by the designated authority in the Final Notification in anti-dumping matter. 33. It also needs to be stated that when Sourabh Jain was confronted wit....