TaxTMI 
TaxTMI 
2024 (5) TMI 1065
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....us countries. Accordingly, after detailed investigation, show cause notices were issued to many parties including the present appellants wherein the value was proposed to be enhanced and consequential duty demand was proposed along with penalty and interest. The import were made at Kandla Port as well as Mundra Port however the Adjudication order was passed by a common adjudicating authority. The show cause notices were adjudicated and the undervaluation was confirmed and consequently the differential custom duty demand, interest thereon and penalties were imposed on the importer as well as on the persons involved in the importer firm, therefore, the present appeals filed by the appellants. 2. Shri Amit Laddha, learned counsel appearing on behalf of the appellants, at the outset, submits that in the present appeals there is no need of elaborated arguments for the reason that under a same investigation and the documents which are basis for the demand raised are common in all the present appeals as well as in the case of Beena Sales Corporation. He submits that the case of Beena Sales Corporation has been decided by this Tribunal vide Final Order No. A/10376/2019 dated 26.02.2019 ....
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.... on the basis of contemporaneous imports by others. The contemporaneous imports referred to in such annexure were said to have been found by the investigating authority from the premises of Shri Rajendra Agrawal and Shri Avinash Jindal at the time of search in respect of other importers. Also statement of Shri Deepak Maloo of Appellant concern has also been relied upon. 7.1. As far as documents seized from Shri Rajendra Agarwal and Shri Avinash Jindal are concerned, preliminary we find that the said persons has refused the veracity of such documents. Also both of these persons in their cross examination has retracted from their statements. They refused that they maintained any accounts or ledger of the appellant on behalf of the suppliers or the importers. Shri Rajendra Agarwal, in his cross examination in respect of data / e-mails retrieved from the hard disc stated that he did not know how to operate the computer and he never made any handwritten entries over the documents. With regard to his signing the seized documents, he stated that he had signed the documents without seeing the contents on the insistence of the officers. Shri Avinash Jindal, in his cross examination....
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....the same has to be proved by tangible evidence. The statements of Shri Avinash Jindal and Shri Rajendra Agarwal and Shri Vineet Jha , Accounts Asst. of Shri Rajendra Agarwal are not corroborated by any evidence and thus cannot form the basis for alleging under-valuation as held in case of Akshay Exports Vs Commissioner 2003 (156) ELT 268 and Galaxy Funworld 2006 (206) ELT 800. Further the statement of Shri Vineet Jha cannot be relied upon as he was not cross examined. In case of KARAN TRADERS 2016 (339) E.L.T. 249 (Mad.), the Hon'ble High Court of Madras has held that if a person is not made available for cross examination his statement cannot be relied upon. 7.3. We find from the tender documents of M/s Prime Timbers and M/s Janki Exports, who were awarded the tender by the Tanzanian Govt, that the tenders were awarded @ $ 95 to $ 120 per CBM. After cutting and processing, the average cost of yielded material comes to $ 160 to $ 200 per CBM, thus, enhancing the value by 60% . Considering the ocean freight and other charges and transportation of goods to India, the price would be around $ 300 per CBM. Adding 10% profit margin, the price of the goods would be around $ 330 p....
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....009, reliance has been placed by the Revenue on account statement named "A/c Export Trading" located in file path "live data/01/Account 26.01.10" report located in file path "live data/01/Accounts/Ambrish Bhai" and import bill located in the file path "live data/02/Agarwal-Teak 19.01.2010" found in hard disk recovered from Shri Rajendra Agarwal. It is alleged that the actual value of imported timber was found to be higher than the declared valued and relied upon the statement of Shri Rajendra Agarwal and Shri Deepak Maloo. 7.5. We find that the statement of Shri Rajendra Agarwal has been denied by him. In respect of "A/c Export Trading", the document does not show the rates at which the goods were purchased nor the Appellant was questioned about the same during investigation. The billed quantity and amount in the document located in file path "live data/01/Agarwal-Teak 19.01.2010 and "livedata/01/Accounts/Ambrish Bhai" does not match. The quality mentioned in file path "live data/02/Agarwal-Teak 19.01.2010" is for "Ripper" quality timber whereas the show cause notice alleged that it is "Repla" quality. Even though the aforesaid records are in respect of 12 containers but t....
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.... Maloo. However we are of the view that the statements cannot be basis of alleging undervaluation. Further, statement of Shri Rajendra Agarwal stands retracted. The statement of proprietor of the Appellant concern Shri Deepak Maloo, who accepted under-valuation cannot be the basis to conclude that the goods were under-valued as it is not corroborated with any independent evidence. 7.7. It is also a fact that at the time of importation the goods were reassessed by the Customs Authorities after examination and the value was enhanced. In case of Bill of Entry No. 155709 dated 02.07.2010, reliance was placed upon emails of Shri Avinash Jindal to allege that the values and quantities declared in the said e-mails were correct and that the values declared by the Appellant were much lower. We find that the enhancement of value is not proper as the said document is not corroborated by any independent evidence. No evidence is forthcoming that the value and quantity of goods mentioned in the invoice are final or agreed upon or it was not changed subsequent to sending of the invoice. Even the quantity shown in all the containers are same, which is not possible. Further, the quantity m....
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....es in the e-mail corresponding to the actual rate at which the materials were purchased. The e-mails contained table having heading of Sl. No., container no., PIC, CBM, invoice, rate US$ and size. The remaining two columns do not have heading. For enhancing the value, figures mentioned in one of the un-named columns has been used without ascertaining as to what this figure actual meant. Shri Avinash Jindal was never questioned or was asked to clarify as to what the unnamed figures represent. It is also found that the goods at the time of importation was re-assessed and the value was enhanced from US$ 350 to US$ 375. In view of such circumstances, there is no reason to enhance the value. 7.9. In case of Bill of Entry No. 4794 dated 30.09.2010, the Revenue has relied upon the e-mails from Shri Avinash Jindal to Leo Timbers. The e-mail contains information regarding container number, number of pieces, CBM, average rate and amount that has been alleged to be corresponding to the materials imported by the Appellant. On the basis of such e-mails and statement of Shri Deepak Maloo, it was held that the goods were under-valued. We find that the material mentioned in e-mail was not....
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....official payments in cash. Only by showing the name of the Appellant in the account statement and that too of a third party, it cannot be concluded that the payment was actually made to Shri Avinash Jindal or even if the payment was made, it was on what account . In absence of any confirmation from Shri Avinash jindal or from Shri Deepak Maloo about the authenticity of such papers, no allegation can be made against the Appellant. A hand-written page from the made-up file of Shri Avinash Jindal has been made as basis for alleging that the Appellant imported Tanzanian timber from Shri Avinash Jindal through one container of 1" material of 14.556 CBM at US$ 391 per CBM, one container of "silli" material of 22.329 CBM at US$ 785 per CBM. We find that there is no evidence that the material mentioned was imported by the Appellant as there is no corresponding bill of entry. The only evidence is the statement of Shri Avinash Jindal, however, the same has been retracted in cross examination and , thus, cannot be relied upon. 8. In some cases for alleging undervaluation, reliance has been made upon the e-mail between Shri Avinash Jindal and Shri Sunil Gupta on account of Timber alle....
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.... import documents. The Appellant has also stated that the packing lists relied upon by the Revenue are not related to the import by the Appellant. In spite of search of the premises of the Appellant, no incriminating document was found. 10. Similarly in case of packing lists of containers of Tanzanian timber found in the hard disk of Shri Rajendra Agarwal, on the basis of which the demand was made against the Appellant, we find that the Appellants were never shown the above records nor their statement was recorded. It has been alleged that the accounts statement found from the hard disk of Shri Rajendra Agarwal indicates the rates at which he purchased the material from one Shri Ambrish Bhai. However, we find that these transactions are of private documents of Shri Rajendra Agarwal with no corroboration from the Appellant. Further the transactions in respect of Appellants were listed under the sub-heading "Through Bank", which even the investigating authority stated as official payment. The name of the Appellant does not appear in sub-heading "Cash", which clearly shows that the imported material was not undervalued by the Appellant. Shri Deepak Maloo, proprietor of the ap....
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....made-up files. It is emanating from the records that the Appellant imported Timber from various suppliers, who were well- recognized and there is no direct evidence that the Appellant had connivance with them so as to undervalue or mis-declare the imported goods. 12. Further, the Appellant have imported Timber even after the disputed period more or less at the same price at which the Appellant imported the goods in disputed period, as we find from the data submitted by the Appellant, there is no specific evidence that the prices were influenced by non-commercial consideration. In case of M/s Oswal Fats & Oils - 2007 (220) ELT 795, the Tribunal has held that the price of the goods would not remain same for the imported goods when the prices fluctuate and the prices in a particular situation can be rejected only when there is information or evidence that the transaction was not a commercial transaction. We find that the Appellant has given the import data of Timbers from the same country and same size and similar period, which shows that there are a number of instances and evidences of contemporaneous imports which are of the same price as declared by the Appellant. In terms....
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....d in the case of M/s. Truwoods Pvt. Ltd. by CESTAT, Delhi and the appeal was allowed. The ratio of the above decision is squarely applicable to the facts of the present case. We also do not find any reason for rejection of the transaction value in terms of Rule 4(2) of the Customs Valuation Rules, 1988. The case-laws cited by the appellants are relevant. It is not the case of the Revenue that the appellants had paid more than what has been reflected in the invoices. Investigations have not brought out any evidence against the appellants in this manner. It is further seen that the insurance covers the value of the goods enhanced by 10% as per the international practice. Further, we find that reliance has been placed on photocopies without proper signature or official seal of the foreign Customs officers. It has already been held in M/s. Truwoods Pvt. Ltd. case, cited supra, that such documents cannot be relied on to enhance the declared value. Further, we have seen that the appellants have given enormous evidence to show that the value of contemporaneous imports in respect of other importers is more or less the same as those of the appellants. In these circumstances, we do not find ....
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.... the Act. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. The Customs Valuation Rules, 1988 have been framed only in respect of imported goods. There are no rules governing the valuation of export goods. That must be done based on Section 14 itself. In the present case, the Department has charged the respondent-importer alleging mis-declaration regarding the price. There is no allegation of mis-declaration in the context of the description of the goods. In the present case, the allegation is of under-invoicing. The charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared in the Bill of Entry is the value referred to above and not merely the invoice price. On a plain reading of Section 14(1) and Section 14(1A), it envisages that the value of any goods chargeable to ad valorem duty has to be deemed price as referred to in....
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....rify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts" proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of under-valuation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore, the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is whe....
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....ng of the export value by the foreign supplier in order to obtain incentives from his Government. For the aforestated reasons, we find no infirmity in the impugned judgment of the Tribunal. 8. Before concluding, we may point out that in the present case at the stage of show cause notice, the Department invoked Rule 8 on the ground that the invoice submitted by the importer was incorrect. In Eicher Tractors (supra) this Court observed that Rule 4(1) of the Customs Valuation Rules refers to the transaction value. Utilization of the word „the" as definite article indicated that what should be accepted as the transaction value for the purpose of assessment under the Customs Act is the price actually paid by the importer for the particular transaction, unless it is unacceptable for the reasons set out in Rule 4(2). In the said judgment, it has been further held that, the word „payable" in Rule 4(1) also refers to the "transaction value" and payability in respect of the transaction envisaged a situation where payment of price stood deferred. Therefore, this decision of the Supreme Court directs the Revenue to decide the validity of the particular value instead of rej....
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.... 15. From the quantity of imports, we find that more than 60% of the imports were of rejected quality Timber. Also, we find that out of 161 bills of entry involved in this case, the value of 83 bills of entry declared by the Appellant was initially rejected by the Revenue and were enhanced in comparison with the contemporaneous imports after physical inspection and examination of the goods. In such case, there is no reason to doubt the declared value as the goods were permitted to be cleared after physical examination. The Appellant has made payments through letters of credit and there is no evidence of having made payments to Shri Rajendra Agarwal or Shri Avinash Jindal on behalf of the suppliers. In such case, the value cannot be discarded. The Appellant has also annexed the prices of imported goods in the domestic market and we do not find any major difference between the declared price and the sales price in local market. There is no evidence acquired from the Appellant such as private records or records of any payment made in cash or recovery of any unaccounted cash which can be supported the cases that the Appellant has indulged in under-valuation. From the difference....
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..... It is not in dispute that by its very nature Vitamin Mixes imported at different times from different sources are having different composition. Therefore, prices at which identical goods have been imported may not be available. It is also not disputed that in view of this what the department seeks to do is to apply the price of comparable or similar goods as per the Customs Valuation Rules. However, the dispute arises on the sole ground that the chemical composition of such comparable goods relied upon by the department as contemporaneous imports was so widely different from the chemical composition of the goods imported in these cases by the appellants that it would not be correct to hold the two sets of goods as comparable. We find that ld. Advocate has in detail submitted the chemical composition as per the Analysis Certificate on record which have not been disputed. Comparison of these show that whereas any cost of imports relied upon by the department the concentration of major Vitamins was many times lower in the goods imported from both Pingtai as well as Zuelling when compared to the concentration of similar Vitamins in the products imported by these appellants. We have s....
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....enalties imposed against Appellant are not sustainable. We, therefore, set aside the impugned order and allow the appeal with consequential reliefs." From the above decision of this Tribunal in the case of Beena Sales Corporation, it can be seen that all the documents and evidences are common which have been relied upon in the present cases also, therefore, the above decision in Beena Sales Corporation, is directly applicable in the present appeals also. Moreover, the decision of Beena Sales Corporation has been upheld by the Hon'ble Supreme Court consisting the Bench of Hon'ble Chief Justice, the said order is reproduced below : 5. Since the Hon'ble Supreme Court has upheld the order of Beena Sales Corporation by dismissing the Civil Appeal of the Revenue, in the present case, following the Beena Sales Corporation decision, the impugned orders are not sustainable. Accordingly, the impugned orders are set aside. All the appeals are allowed with consequential relief. ( Order pronounced in the open court on 16. 05. 2024 ) ============= Document 1 ITEM NO.14 7 SECTION XVII-A COURT NO.7 SUPREME COURT OF RECORD OF PROCEEDINGS INDIA CIVIL APPEAL Diary No(s....