TaxTMI 
TaxTMI 
2024 (4) TMI 485
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....imported goods into domestic area by resorting to gross undervaluation and thereby defrauding the government exchequer by evading the payment of higher customs duty. As per SEZ Rules, 2006, if a SEZ (trading) unit clears the goods into Domestic Tariff Area (hereinafter referred to as "DTA" for the sake of brevity), the sale proceeds should be in Foreign Exchange only but intelligence indicated that M/s. ZZEPL was clearing the goods against payment of Indian rupees only and thus they were not earning any foreign exchange. Intelligence further suggested that all dealings with foreign suppliers were being done by the domestic buyers/actual importers only and M/ s. ZZEPL was facilitating the domestic buyers in getting the goods cleared through their SEZ Unit by resorting to gross undervaluation for which they were charging commission. 2. M/s. ZZEPL was importing Knitted Polyester Fabrics under Customs Tariff Heading 6006 and various other Electrical Goods such as Mosquito Bats, LED Rechargeable Search Lights, Fancy Mini Torches, Small Rechargeable Batteries, Decorative Disco LED Par Lights, Decorative Disco Focus Lights, Laser Lights, LED Rope Lights, Led Christmas Lights etc., of a....
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....of Value of Imported Goods) Rules, 2007 and the same was required to be re-determined to Rs.8,64,81,379/- (Rs. Eight Crore Sixty Four Lakh Eighty One Thousand Three Hundred and Seventy Nine only) as per the Show Cause Notices Gen/Adj/ADC / 146/2022 - Adjn (read with corrigendum dated 11.02.2022) dated 09.02.2022 & Gen/Adj/ADC/153/2022-Adjn (read with corrigendum dated 20.03.2023) dated 14.02.2022, under Section 14 of the Customs Act, 1962 read with Rule 3, Rule 9 and Rule 10 of the CVR, 2007. 7. Further, as per the department M/s. Jia Lighting and Audio Equipment hatched the conspiracy to import "Decorative LED Par Light 54L and "Decorative Disco LED Par Light Small", by declaring lower values than the actual transaction values of the said goods to evade the Customs Duty, as indicated in ANNEXURE-A to Show Cause Notices Gen/Adj/ADC / 146/2022 - Adjn (read with corrigendum dated 11.02.2022) (hereinafter 'second S.C.N') dated 09.02.2022 & Gen / Adj / ADC / 153 / 2022 -Adjn dated 14.02.2022 (hereinafter 'third S.C.N') . The firm had as per the department indulged in the activities relating to the said undervaluation and mis-declaration of actual price of said imports, which resulte....
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....) Differential Customs Duty amounting to Ra. 1,85,15,174/- (Rs. One Crore Eight Five Lakh Fifteen Thousand One Hundred and Seventy Four Only) on the goods imported l.e., Various Electrical Goods', under the Bills of Entry, valued (re-determined value) as detailed in ANNEXURE- A to Show Cause Notices, Gen/Adj/ADC/146/2022-Adjn (read with corrigendum dated 11.02.2022) dated 09.02.2022 Gen/Adj/ADC/153/2022-Adjn (read with corrigendum dated 20.03.2023) dated 14.02.2022, should not be demanded and recovered from them, under Section 28(4) of the Customs Act, 1962, along with applicable interest under Section 28AA of the Customs Act, 1962. (iii) The goods i.c. Various Electrical Goods' Imported by them under the said Bills of Entry and further valued (re- determined value) as mentioned in ANNEXURE-A to Show Cause Notices, Gen/Adj/ADC/146/2022-Adjn (read with corrigendum dated 11.02.2022) dated 09.02.2022 & Gen/Adj/ ADC / 153 / 2022- Adjn (read with corrigendum dated 20.03.2023) dated 14.02.2022, should not be held liable for confiscation under Section 111(m) and 111(d) of the Customs Act, 1962. (iv) Penalty should not be imposed upon them under Section 112(a) & (....
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....OM-14-23-24 dated 20.09.2023 without affording any opportunity of Personal Hearing to the Appellant by applying the said value as proposed in the SCN dated 08.09.2021 i.e. the first S.C.N to the subject Bills of Entry and accordingly, have confirmed the entire demand along with interest and have also imposed penalty equal to the confirmed duty. In addition, penalty under Section 114AA has also been imposed. 9.5 That DRI stated to have developed an intelligence to the effect that one M/s Zip Zap Exim Pvt. Limited (hereinafter referred to as "M/s ZZEPL"), a trading unit in Special Economic Zone, Kandla (Gujarat) (hereinafter referred to as "KASEZ" for the sake of brevity) was importing Knitted Polyester Fabrics and various other Electrical goods and subsequently, clearing the same into DTA to various DTA importers including the Appellant by resorting to gross undervaluation. On the basis of said purported intelligence, an investigation was conducted and after completion of the same, a show cause notice dated 08.09.2021 was issued to Mis ZZEPL. & other DTA buyers including the Appellant proposing rejection of value declared by said SEZ. Unit and demanding differential duty along wi....
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....ly assessed. The subject bills of entry were duly assessed by the customs officers at the time of clearance in accordance with law and the same has attained finality as none of them have ever been challenged. Now, it was not open for the department to raise demand by undoing the assessment attained finality. It was submitted that the assessment made by the officers at the time of clearance is an appealable order unless the said assessment is challenged by way of appeal by appropriate forum; reassessment cannot be done, as has been in the instant case. Reliance in this regard is placed upon the judgment of the Hon'ble Supreme Court in the case of ITC Limited vs. Commissioner of Central Excise, Kolkata-IV reported in 2019 (368) ELT 216 (S.C.), Priya Blue Industries vs. C.C. reported 2004 (172) ELT 145 (SC) and C.C.E., Kanpur vs. Flock India Pvt. Ltd. reported as 2000 (120) ELT 285 (SC). 9.9 It was further submitted that for rejection of value declared by the Appellant in the instant case, the Adjudicating Authority has relied upon the Chartered Engineer's report pertaining to SCN dated 08.09.2021 without taking into consideration the value of contemporaneous import which i....
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.... is evidence of contemporaneous import at higher price. There is catena of case laws where the Hon'ble Apex Court and Tribunals have held that allegation of undervaluation must be supported by price of contemporaneous imports. Reliance is placed upon the recent judgment dated 06.10.2023 of the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai vs. Ganpati Overseas] 2023 (10) TMI (364)]. Thus, confirmation of demand in the instant case without considering the contemporaneous data is arbitrary and legally not sustainable. 9.13 In the impugned order, some electronic data retrieved from one of the DTA buyers pertaining to SCN dated 08.09.2021 i.e the first S.C.N has been referred in para 15.3 to support the allegation of undervaluation in the instant case. Firstly, none of such data has been retrieved in relation the subject consignments pertaining to the instant case. In any case, The electronic data retrieved from Mobile phones and e-mails in the manner as had been done in the in the case of investigation leading to issuance of SCN dated 08.09.2021, are not admissible as evidences. It is pertinent to mention that Data from mobile phone of Manoj ....
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.... under Section 111(d) & 111(m) of the Customs Act 1962. Since, the subject goods are not physically available for confiscation, therefore, I refrain from imposing any redemption fine under Section 125 of the Customs Act, 1962. 39.41 impose a Penalty of Rs. 1,85,15,174/- (Rs. One Crore Eight Five Lakh Fifteen Thousand One Hundred and Seventy Four Only)on M/s. Jia Lighting and Audio Equipment, 1964, Outram Lines, Kingsway Camp, Delhi-110009 under Section 114A of the Customs Act, 1962. 39.5 I impose a Penalty of Rs. 30,00,000/- (Rupees Thirty lakhs only) on M/s. Jia Lighting and Audio Equipment, 1964, Outram Lines, Kingsway Camp, Delhi-110009 under Section 114AA of the Customs Act, 1962. This OIO is issued without prejudice to any other action that may be taken against the claimant under the provisions of the Customs Act, 1962 or rules made there under or under any other law for the time being in force." 11. Learned AR defended the findings and, inter alia emphasised that corrigendum did not change the character of the substantive contents of SCN and hence there was no time bar operating. Findings : - 12. Considered. We find that the present case pe....
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....osed. 13. It is further found that DRI has been stated to have developed an intelligence to the effect that one M/s Zip Zap Exim Pvt. Limited (hereinafter referred to as "M/s ZZEPL"), a trading unit in Special Economic Zone, Kandla (Gujarat) (hereinafter referred to as "KASEZ" for the sake of brevity) was importing Knitted Polyester Fabrics and various other Electrical goods and subsequently, clearing the same into DTA to various DTA importers including the Appellant by resorting to gross undervaluation. On the basis of said purported intelligence, an investigation was conducted and after completion of the same, a show cause notice dated 08.09.2021 was issued to M/s ZZEPL & other DTA buyers including the Appellant proposing rejection of value declared by said SEZ Unit and demanding differential duty along with interest from DTA buyers (including the appellant) with respect to respective imported goods. Said show cause notice dated 08.09.2021 is yet to be adjudicated as per verification got done through Authorized Representative, which has revealed that matter was still to be adjudicated in that show cause notice. 14. However, the learned Adjudicating Authority, in the instant....