TaxTMI 
TaxTMI 
2024 (5) TMI 683
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.... China and Zhejiang Jinyuan Flax Co. Ltd., 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....
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.... 5052822.00 N.A 7 6870732 dt 20.06.2018 4854797.00 N.A 8 6969562 dt 27.06.2018 4984264.00 N.A 9 8331416 dt 05.10.2018 5874750.00 N.A 6. The Notice was adjudicated by the Ld. Commissioner of Customs (Port) vide the impugned order dated 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 de....
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....tion of fabricated invoices submitted by them to avail lower ADD @0.50 US$ per Kg. The contents of the letter are contrary to the statutory documents such as bills of lading and the country of origin certificates submitted them. These documents are presumed to be true under Commercial Document 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....
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....ver, the ld. adjudicating authority has accepted those documents and treated them as representing the transaction value. Thus, the appellants argued that the rejection of transaction value is bad in law. 9.2. It is further submitted that the valuation dispute has been raised not on the basis 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....
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....d within the time-period prescribed in Section 28(9) of the Customs Act; 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 and liable to be set aside on this 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....
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....es arise for consideration in these appeals: - (1) Whether the appellants are liable to pay differential Anti-Dumping Duty in respect of the 7 Bills-of-Entry or not. (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 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 ....
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....dated 29.03.2019 contains information on invoices issued in the months of September 2019 and November 2019, we agree with the contention raised by the appellants that there is suspicion about the genuineness and veracity of the said letter. 15.5. Accordingly, we hold that the demand cannot be raised on the basis of the letter dated 29.03.2019 or the documents said to have been attached along with the said letter. 15.6. 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 delive....
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.... in the instant case, the Assessing Officer has collected ADD at the rate of 0.50 USD per kg. by mistake. The differential duty short paid by the appellant can be collected within the normal period, as there is no mis-declaration or suppression fact involved. 16.2. For ready reference, the said Bills-of-Entry are reproduced hereinbelow: - These Bills-of-Entry were filed by the appellants on 31.01.2019 and 09.03.2019. 16.3. The demand, if 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. Sin....
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....blished. Hence, the demand of differential customs duty confirmed in the impugned order on account of undervaluation is not sustainable and hence we set aside the same. 18.4. We observe that the value declared by the appellant has been rejected on the basis of the documents submitted by a third-party. The evidences submitted by the Department alleging that the documents submitted by the appellants were forged are not supported by any evidence. The evidence in 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....
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....that any amount over and above the contracted price was paid by the importer to the supplier. Further, there is no allegation that the importer is related to the suppliers other than being a contracted party or the price paid was influenced by any other consideration. ... .... .... 22. The impugned goods in all these appeals are imported in terms of various contracts entered into with the suppliers abroad. If any condition of the contract is contravened, it is for the contracting 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. .... ....
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....en to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularized under Rule 4(2). The special circumstances particularized under Rule 4(2) were also reproduced in the Apex Court's judgment and the same are asunder :- "(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (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....
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....goods imported by the assessee. This, however, had nothing to do with the Customs Valuation Rules, 1988 as rightly noted by learned Member (Technical) of the regular bench. There is no parallel between the instant case and the case of Rajkumar Knitting Mills (supra) insofar as the valuation issue is concerned. Hence, in my considered view, the Apex Court's decision in Rajkumar Knitting Mills (supra) is of no aid to the Revenue in the present case. As regards the Supreme Court's judgment in Punjab Processors (supra) cited by ld. SDR, I note their lordships' observation that, while the Customs authorities, 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 val....
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....ustoms Act, 1962. (ii) Out of the 7 Bills of Entry where differential ADD has been confirmed in the impugned order, the differential ADD confirmed in respect of the 5 Bills-of-Entry in the impugned order is not sustainable, as there is no evidence available to substantiate the allegation. The differential ADD confirmed in respect of the remaining 2 Bills-of-Entry in the impugned order, is not sustainable on the ground of limitation. Accordingly, the ADD confirmed in the impugned order is set aside. (iii) The demand of differential customs duty confirmed in the impugned order on account of undervaluation is not sustainable and hence we set aside the same. (iv) Penalties imposed on all the four appellants is set aside. 24. In the result, the appeals filed by all the four appellants are allowed, with consequential relief, if any, as per law. (Order pronounced in the open court on 09.05.2024) ============= Document 1 G æ±å˜‰éº»æ£‰(常州)有é™å…¬å¸ 55 TUNG GA LINEN & COTTON (CHANG ZHOU) CO.,LTD. March 29, 2019 To, 1. Pr. Director General, By Hand-Delivery/Post/Email Directorate of Revenu....
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....g Ga Linen & Cotton Changzhou Co. Ltd." which is deceptively similar to the name of our Company. On a reading of the invoice it appears that the invoices are dated 28 September 2019, 30 September 2019 and 15 November 2019 and the shipment of goods against these invoice were on 28 September 2019, 9th November 2019 and 21 November 2019 respectively. Also there appears to be another shipment of goods under the name of our Company on 13 December 2018 against an invoice dated 7th December 2018. As mentioned above our last shipment to India was on 13 July 2018 and since September 2018 a commercial decision was made by us to stop exporting to India. Given the circumstances it is apparent that these shipments/exports against the above mentioned invoices and their corresponding bills of entry have not been done by us. A copy of these documents (" false documents") have been enclosed herewith as Annexure "C" for ready reference . These false documents are in circulation in the Chinese linen yarn market. Further, a comparison of the Company's documents and the false documents referred to above issued by unknown miscreants sh....
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....ion procedure to and from Kingdom. 2. Whether Imports by you are only through Arshiya FTZ or otherwise - We import majorly from FTWZ, very limited quantities through Direct shipment 3)Whether the invoices in the attachment were issued by your Principals, if yes copies of the same - Attached above Regards, Siddharth Mehta Partner Texventures LLP (Formerly known as Sundarams Texventures LLP) 804, ECO STAR, Vishveshwar Nagar,Off Aarey Road, Behind Udipi Hotel, Goregaon (E), MUMBAI-400 063, Mob: 91 9768764174/9867335490 Email: [email protected] Website: www.texventures.in KINGDOM TEX/ENTURES LLP Document 5 Duplicate (Importer eepys Experts vs Spa HOUSE KOLKATA 7000 Indian Customs EDE Syste 15/3 STRAND ROAD, CUSTO DELL OF ENTRY FOR HOME CONSUMPTIO Custon St INCCUs). CHA SELFSUBRITCHOS FILED BY TEC HERSELF AD Code 6330224 Ixporter Detail 10214003752 PAN AMACE89206T091 AANANA COMMERCE PRIVATE LIMITED 13: WOODBURN PARK, HALAYALAY, UNET NO.ZA(S), 2ND FLOOR, KOLKATA,.. 700020 Payment Hethed 12221134/03/04/2019 08/04/2019 Pere or Leading Ningbo ry of orgn. CHINA GOSUZA03765 199/03 Entry of C....