TaxTMI 
TaxTMI 
2024 (5) TMI 683
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...., Grand Dignity Industrial Co limited, Star Enterprises (H.K.) Limited, Zhejiang Jiaxin Silk Corpn. Limited and others through its indenting agents. 2. Flax yarn attracts Anti-Dumping Duty by a Notification No. 53/2018 dated 18th October 2018 which have different rates of Anti-Dumping Duty on the basis of the manufacturer and supplier mentioned therein. 3. The goods supplied by Tung Ga Linen & Cotton Changzhou Co. Ltd . attracts antidumping duty of 0.50 US$ per M.T. and goods supplied by Zhejiang Jainyon Flax Co. Ltd. attracts Anti-Dumping Duty of 2.42 US $ per M.T. and for all others rate of Anti-Dumping Duty is 4.883 US$ per M.T. 4. Directorate of Revenue Intelligence, Pune initiated an investigation against all the three appellants on the basis of the intelligence that the appellants have undervalued the Flax yarn imported by them and not paid appropriate Anti-Dumping Duty. On the basis the investigation, a Show Cause Notice dated 22.11.2021 under Section 28(4) of the Customs Act, 1962 was issued to all the appellants demanding Anti-Dumping Duty and Customs duty aggregating to Rs. 2.65 Crores along with interest and penalty. 5. The subject Show Cause Notice altogether covers....
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....ed 18.08.2023, wherein he has confirmed differential ADD and differential customs duty on account of undervaluation totally amounting to Rs. 2.65 Crores along with interest and penalty on the Appellant importers. Penalty of Rs.10,00,000/- under Section 112(a) and Rs.5,00,000/- under Section 114AA has been imposed on the common Director Shri Aditya Sarda. Aggrieved against the confirmation of the above demands and imposition of penalties, all the four appellants have filed these appeals. 7. At the outset, the appellant submits that in the Show cause Notice e-mails were relied upon without being certified under Section 65 of the Indian Evidence Act and Information Technology Act, 2000, which mandatorily required certification of documents. Similar provisions are also embodied under Section 138C of the Customs Act, 1962. 7.1. The appellant also raised another preliminary objection that the Notice was not decided within the time-period prescribed in Section 28(9) of the Customs Act and there was no extension granted by any Officer senior in rank to the Proper Officer as mandated in Section 28(9) of the Customs Act. Accordingly, he submits that the impugned order is not maintainable a....
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....ocument Evidence Act, 1939. The appellants made payment to Tung Ga which were used for discharge of Bills of Lading. The shipping Company would deliver the goods on the instructions of Tung Ga, who was the consignor. Without release order of Tung Ga, delivery order could not have been issued. There is no evidence from the shipping company that delivery instructions were not given by Tung Ga. These are factual situations from which inescapable conclusion can be drawn that alleged complaint by Tung Ga was not actually issued by Tung Ga. The appellants have placed this suspicion before the adjudicating authority, but he did not contradict their submissions which amounts to admission by the adjudicating authority. It is a settled principal of law that facts pleaded but not denied amounts to admission. The presumption under the Commercial Document Evidence Act, 1939 could not be rebutted by non-admissible and hearsay evidences of e-mail, etc. which were neither true nor authenticated. The Bills of Lading are certified by the competent authority wherein it has been categorically stated that the goods were of Chinese origin manufactured by Tung Ga. They have filed the Invoices issued by T....
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....is of any comparable contemporaneous imports but on the basis of selectively picked up data which is not permissible for challenging the transaction value; the goods are not comparable without histograms of yarn which were part of the import documents which show the strength and quality of the product. Only size is not a marker. It is submitted that the ld. adjudicating authority has accepted the markers such as breaking force, elongation, speed, tensil test, etc., required for comparing the goods and he fairly conceded that he has no data except "description of goods" (paragraph 29 of the order); the description of the goods alone would not be sufficient for comparison; without any contemporaneous import of similar goods the transaction value cannot be rejected. 9.3. The appellants further submits that they had submitted import data where the imports have been made by other importers at the same and near rate; the ld. adjudicating authority rejected those data by holding that supplier's name is not mentioned therein but the learned adjudicating authority has applied the value wherein only the description matches. Thus, the ld. adjudicating authority has erred in not applying the ....
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....is ground alone. 12.2. The contention of the appellants is that the Notice has not been decided within the time-period prescribed in Section 28(9) of the Customs Act. For the sake of ready reference, the said Section 28(9) of the Customs Act, 1962 is reproduced below: - "SECTION 28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - ... .... ..... (9) The proper officer shall determine the amount of duty or interest under sub-section (8), - (a) within six months from the date of notice, in respect of cases falling under clause (a) of sub-section (1); (b) within one year from the date of notice, in respect of cases falling under sub-section (4). Provided that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under sub-section (8), extend the period specified in clause (a) to a further period of six months and the period specified in clause (b) to a further period of one year : Provided further that where the prop....
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....ailable of similar goods in the NIDB data is acceptable in the facts and circumstances of the case or not. (3) Whether or not the penalty imposed on the appellants is sustainable. Issue (1): Whether the appellants are liable to pay differential Anti-Dumping Duty in respect of the 7 Bills-of-Entry or not. 14. Regarding the demand of ADD in the impugned order, we observe that ADD has been demanded vide Notification No. 53/2018-Cus.(ADD) dated 18.10.2018. This Notification fixed different rates of ADD on the basis of manufacturers and suppliers from China. Out of the 26 Bills-of-Entry filed by the appellants, ADD has been demanded in respect of 7 Bills-of-Entry. We observe that out of these 7 Bills-of-Entry, the appellants claimed that they imported Flax Yarn from Tung Ga in respect of 5 Bills-of-Entry and in respect of the other 2 Bills-of-Entry, they imported Flax Yarn from Zhejiang. 15. The Department has demanded ADD at the rate of 4.83 USD per kg. in respect of the 5 Bills-of-Entry filed where the goods have been claimed to be imported from Tung Ga, on the allegation that the letter dated 29.03.2019 was written by the manufacturers to DRI, Pune informing that they have not m....
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..... The appellant submitted that after October 2018, there were many importers who filed Bills-of-Entry claiming that the goods have been imported from Tung Ga. They have submitted these details before the ld. adjudicating authority but the same were not taken into consideration by the ld. adjudicating authority while passing the impugned order. 15.7. Regarding the genuineness of the invoices submitted by them, they stated that they have enclosed the manufacturer's invoice sent to them by the indenting agents; they have enclosed the Bill-of-Lading certifying the country of origin and the manufacturer as "Tung Ga Linen & Cotton Changzhou Co. Ltd.". They made payments to Tung Ga, which were used for discharge of Bills-of-Lading. Their shipping company would deliver the goods on the instruction of Tung Ga and without the release order from Tung Ga, delivery order of the goods could not have been issued. It was contended that there is no evidence from the shipping company that delivery instructions were not given by Tung Ga in this regard; the ld. adjudicating authority has not given any finding regarding the above said submissions made by them. We also find that the manufacturer's invo....
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....f any, for the short-paid ADD could have been issued within a period of one year from the date of payment of ADD. However, in this case, the Notice has been issued on 22.11.2021 which is much beyond the normal period of limitation. As no suppression of fact with intent to evade payment of duty exists in this case, we hold that the demand of ADD by invoking the extended period of limitation is not sustainable. 16.4. Accordingly, we hold that the ADD demanded in respect of the 2 Bills-of-Entry is also not sustainable, on the ground of limitation. 17. In view of the above, we hold that the differential ADD confirmed in the impugned order in respect of all the 7 Bills of Entry are not sustainable and accordingly, we set aside the same. Since the demand of differential ADD is not sustainable, the question of demanding interest and imposing penalty on the same does not arise. Issue (2): Whether the values declared by the appellants in all the 26 Bills-of-Entry is liable to be rejected and the values re-determined by the ld. adjudicating authority in the impugned order based on the price available of similar goods in the NIDB data is acceptable in the facts and circumstances of the cas....
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....n the form of email dated 08.07.2019 submitted by the Department has suspicious contents and thus the same cannot be relied upon to reject the invoice value as declared. 18.5. Thus, we observe that the values declared by the appellants in the Bills of Entry were rejected without any cogent material; there was no document to show that there was a contemporaneous import of identical or similar goods; without comparison of histogram of the yarn it was not possible to say whether goods are identical or similar. 18.6. There is no evidence available on the record to reject the genuineness of the invoices submitted by the appellants. The value declared by the importers in other Bills-of-Entry are not comparable as the quantity of goods or quality of goods imported cannot be ascertained to conclude as to whether the comparable import qualifies as identical goods or not. 18.7. Accordingly, we hold that the transaction value declared by other importers cannot be treated as the correct transaction value in respect of the goods imported by the appellants herein .The transaction value declared by the appellants cannot be rejected on the basis of a mere allegation by a third-party on the grou....
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....cting parties to settle among themselves and raising a doubt about the validity of the contract is not proper in the absence of any evidence that such a contract is entered into with any ulterior motive affecting the price. Further, revenue has discredited the contract prices as the respondent has not reportedly imported the entire contracted quantities. From the Show Cause Notice, the Order-in-Original and records, contract numbers and the quantity contracted for import are only mentioned as detailed in Paragraph 10(b) supra. Actual total quantity imported and how much is the shortfall and how it is to affect the transaction prices declared is not forthcoming. .... 25. The Ld. Authorised Representative and Ld. Advocate have referred to many judicial decisions as detailed in the above paragraphs. But, the facts obtaining in these appeals are clearly distinguishable. There is nothing illegal or improper in suspecting the declared values of imported silk by the appellant. But, under valuation has not been conclusively proved by the Revenue. We agree with the decision of the lower appellate authority that there was no clinching evidence for rejecting the transaction values declare....
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.... (iii) do not substantially affect the value of the goods; (b) 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; (c) 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 (d) 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)" On going through the impugned order of the Commissioner (Appeals), I have not come across any clear finding as to which of the above circumstances existed in relation to the goods imported by the appellants. Though the impugned order says that the subject import falls within the exception contained in clause (b) above, there is no discussion on the point. In other words, ld. Commissioner (Appeals) has not established that any of the aforesaid exceptions/special circumstances did exist in relation to the subject import. Consequently, one has....
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....thorities, in assessing the value of import, are not bound by the figure mentioned in the invoice, they can rely on contemporaneous evidence to show that the invoice price is not the correct value. In the instant case, it was not the invoice alone but also the contract between the appellants and their supplier that provided the transaction value of the subject goods and the Customs authorities had no reason whatsoever to reject this value. Thus the Revenue cannot claim effective support from Punjab Processors (supra). 14. For the reasons already noted, I hold that the transaction value of the subject goods requires to be accepted, in this case, for the purpose of assessment to Customs duty. Accordingly, the appeal is allowed." 21. In view of the discussions above and by relying on the decisions cited above, we hold that the assessable values declared by the appellants in the 26 Bills of Entry cannot be rejected. Accordingly, we hold that the differential duty confirmed on the basis of the re-determined assessable value is not sustainable. Issue (3): Whether or not the penalty imposed on the appellants is sustainable. 22. We observe that penalties have been imposed on the appel....