TaxTMI 
TaxTMI 
2024 (7) TMI 16
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....lity Chemicals, is a unit operating from the MEPZ, Special Economic Zone which is a wholly owned subsidiary of M/s Tokyo Chemical Industry Company Limited, Japan from whom products are imported and distributed in India. The Appellant was engaged in trading of these chemicals to Customers located in SEZ & 100% EOU Units and also into the Domestic Tariff Area (DTA). Before July 2018, the Appellant had supplied goods to its branch in DTA. However, from July 2018 onwards, the Appellant supplied goods to its wholly owned subsidiary Viz. Tokyo Chemical Industry (India) Private Limited, a DTA unit and also to SEZ & 100% EOU. The Appellant supplied goods to DTA unit at a value higher than the value of importation which appears to have been approved by SVB. 2.2 Since, the Appellant and their holding company i.e., Tokyo Chemical Industry (India) Private Limited holding 100% shares are related in terms of Customs Valuation Rules, 2007, they had applied to the Special Valuation Branch (SVB), Custom House, Chennai for determining the assessable value of the goods imported by the Appellant. The SVB vide Order-in-Original No. 22881/2013 dated 11.12.2013 held that the value declared by the Appe....
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....Appellant filed an appeal before Commissioner (Appeals) who vide Order-in-Appeal No. 152/2020 dated 22.06.2020 rejected the appeal on the principle of res judicata, mentioning the earlier Order-in-Appeal No. 82/2018 dated 18.06.2018. 2.5 Aggrieved, the Appellant came on appeal before this forum. 3. The Appellant's submissions as found in their Grounds of Appeal are summarized as follows :- (i) That the impugned order does not satisfy the provisions of the Customs Act,1962 read with Customs Valuation Rules, 2007 and that the assessing officer has to record reasons for rejecting the declared transaction value of imported goods before proceeding further in the light of the decisions in:- (a) Commissioner of Customs, Calcutta Vs. M/s. South India Television (P) Ltd. [2002 (145) ELT A159 (SC)] (b) Commissioner of Central Excise and Service Tax, Noida Vs. Sanjivani Non-Ferrous Trading (P) Ltd. [2018 (11) GSTL J84 (SC)] (c) Commissioner of Customs Vs Bayer Corp. Science Limited [2015 (324) ELT 17 (SC)] (d) Century Metal Recycling Pvt. Ltd. Vs. Union of India. (ii) It was pointed out that the Impugned Order is a cryptic and non-speaking Order....
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....als on record, nor the logical conclusions supported by reasons. The findings do not disclose consideration of all the relevant materials on record. The Commissioner (Appeals) having failed to do the required exercise in the matter in hand, his order cannot be sustained." (iii) The Appellant further averred that the Department erred in as much as it sought to adopt the price on the basis of price charged to a prospective customers for determination of assessable value of the imported goods. It was pointed out that the impugned order did not properly provide the evidence available for enhancement of assessable value by 90%. The impugned order does not provide the rule referred by the Specified Officer to arrive at the enhanced assessable value relying on the following case law. (a) Commissioner of Central Excise and Service Tax Noida v. M/s Sanjivani Non Ferrous Trading Pvt Ltd [2018 (11) G.S.T.L. J84 (S.C.)] (b) Anil Kumar Anand vs Commissioner of Customs [2018 (361) E.L.T. A233 (S.C.)] "Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules,....
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.... January 2020. For the earlier Bills of Entry on which duty was paid under protest, there is no speaking order issued. Section 17 of the Customs Act requires the importer to self-assess the duty. However, on verification, if the proper officer finds that the self-assessment is not done correctly, then he may re-assess the duty leviable on such import of goods. If the re-assessment is contrary to the self-assessment done by the importer, the proper officer is required to pass a speaking order on the re-assessment, within 15 days from the date of re-assessment of the Bills of Entry as per section 17(5) of the Customs Act. The adjudicating authority is under obligation to pass a speaking order disclosing the grounds for loading or enhancement in the declared value under section 17(5) of the Customs Act. The impugned order has erred by rejecting the appeal, stating it is barred by the period of limitation. Without issuance of speaking order the Specified Officer cannot assess the duty leviable on importation of goods. The limitation for filing appeal under Section 128 would start only from the date of communication of the decision or order to the petitioner. BOE is not a decision or or....
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....sion or order contemplated under Section 128. It can only be an order under Section 17(5) which has to be a speaking order". (c) Ingram Micro India (P) Ltd vs. Principal Commissioner of Customs, Chennai in [2017 (358) E.L.T. 125 (Mad.)]:- "27. The submission of the revenue that the petitioner should have filed an appeal after entering the BOE's does not impress me, as without a speaking order, the appeal, if any, preferred before the concerned authority under Section 128 of the Act, would clearly be inefficacious. A non-speaking order would present the appellate authority with a situation akin to, in a manner speech, "an inscrutable face of a sphinx" (d) Commissioner of Customs, Patparganj vs. M/s Artex Textile Private Limited [2018 (360) E.L.T. 382 (Tri. - Chan.)] "The assessment of imported goods have to be done as per transaction value in view of Rule 3 read with Rule 12 of Customs Valuation Rules and adjusted in accordance with the provisions of Rule 10. Unless the particular transaction falls within the exceptions in Rule 3(2) of CVR, the Customs authorities are bound to assess the duty on the transaction values. The adjudicatin....
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....sons for the same. This would give an opportunity to the importer to explain why the proposed variation in the BOE is uncalled for. If the explanation of the importer is accepted then the BOE would be assessed in accordance with the claim made by the importer or even if not accepted, the authority would be required to give reasons in support of its conclusion. This would undoubtedly curtail/reduce unwarranted litigation. The above process of natural justice is only in compliance with elementary principles of Rule of law. The above process may not be elaborate but must meet the essence of fair play so that no person is left with a feeling of being a target of arbitrary and unfair behavior on the part of the authorities". even after having finalized the said BOE there is no communication from the Assessing officer indicating the reasons for enhancing the duty payable on final assessment. In case reasons are given, it is likely that the petitioner/importer may see merit in the same and accept it. However, in the absence of reasons, the party does not know why its contention/explanation was not acceptable. This alone prevents the authority from exercising unbridled powers in arbitrary ....
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....oms (Appeals) erred that the principle of res-judicata can be invoked when the first judgment was not passed on merits. The Appellant's earlier appeal in the given case was rejected vide Order-in-Appeal C.Cus. I No. 82/2018 dated 18 June 2018, on the ground that the appeal filed was time barred. In this regard reliance was placed on the following decisions:- (a) Tilokchand Motichand & Ors. Vs. H.B. Munshi & An [1970 AIR 898 (SC)] held that if a petition under Art. 226 is dismissed not on merits but because an alternative remedy was available to the petitioner or that the petition was dismissed in limine without a speaking order such dismissal is not a bar to the subsequent petition under Art. (b) Apex court in Virudhunagar Steel Rolling Milis vs The Government Of Madras [1968 AIR 1196, 1968 SCR (2) 740] held that while negativing the contention on the facts of the case this Court reaffirmed that if the petition is dismissed in limine without passing a speaking order then such a dismissal cannot be treated as creating a bar of res judicata. (ix) It was submitted that the SVB had confirmed in the Order-in-Original No. 22881/2013 dt. 11 December 2013 and also ....
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....rovision under Section 27(1) requires a refund claim to be filled within six months from the date of payment of duty. The second proviso to Section 27 (1) states that the limitation of Six month shall not apply where any duty has been paid under protest. Subsequently the forth proviso states that where the duty becomes refundable as a consequence of any judgement, degree, order or direction of the Appellate Authority, Appellate Tribunal or any Court, the limitation of six months shall be computed from the date of such judgement, decree, order or direction. Both these provisions require to be read harmoniously. It was held that the dispute in assessment came to finality once the matter was decided in favour of the appellants by the lower appellant authority and the department choose not to file any further appeal against the same. Once the very cause of the protest came to an end by the resolution of the assessment dispute at the hands of the Lower Appellate Authority, it cannot be held that the protest would survive beyond the date of the order passed by the lower appellate authority in favour of the appellants. Thereafter, it was the duty of the appellants to take steps to file ne....
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....ulated in clause (a) of Rule 3(3) of the valuation Rules is satisfied. The interpretative notes also clarified that the Department is not required to investigate relationship if there no doubts about the acceptability of the price. It was pointed out that the department neither provided reasonable grounds for enhancement of value nor they have raised any doubts about the acceptability of the price. Accordingly, the declared price should have been accepted as the transaction value. Reliance was placed on the following decisions in support of this contention:- (a) Commissioner of Customs (Import), Mumbai Vs. Viacom Electronics Pvt. Ltd. [2017 (357) ELT 754 (Tri-Mumbai)]:- "4. We have carefully considered the submissions made by ld. AR and perused the records. It is observed from the original order that except the allegation that the respondent has not submitted any documents, no reason was given for enhancement of 20%. Even there is no whisper of relationship between the importer and the foreign supplier. Since no material was available, even though the appellant has not produced any documents, the adjudicating authority could not have enhanced 20%. The Commissioner....
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....d the goods are not liable for confiscation as well. 13. Since the charges of misdeclaration & undervaluation are not sustainable in law, the differential duty demand is liable to be set aside along with penalties imposed and redemption fine imposed." (b) Sanjivani Non-ferrous Trading Pvt. Ltd. Vs. CCE & ST, Noida [2017 (7) GSTL 82 (Tri.-All.) (c) Commissioner of Customs, Mumbai Vs. Clariant (India) Limited [2007 (210) ELT 481 (SC)] "11. In the present case that is not so. The respondent here had conceded before the appellate authority that the two companies are related. We make it clear that merely because the two parties are related to each other will not amount to undervaluation per se. It will depend on the facts and circumstances of each individual case." 5. The Ld. Authorised representative Sh. Anoop Singh representing the department justified the enhancement of value of import clearances to a related DTA Unit and prayed for dismissal of appeal filed by the Appellant. 6. Heard both sides and carefully considered the submissions and evidences on record. 7. The following issues arise for decision in this appeal:- i. Whether ....
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....alue of Imported Goods) Rules, 2007. 4. The importer shall make annual declaration to the undersigned regarding any change in mode of invoicing or terms of agreements and relationship with the Foreign Supplier. 5. This decision will remain in force till present method of invoicing remains unchanged. Any changes, affecting the invoice value materially, shall be informed to this SVB suo moto by the importer without delay. 6. If there is any change in the method of invoicing, terms of relationship or any other material facts affecting the valuation of goods under Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14(1) of the Customs Act, the importer of the concerned assessing Group shall inform the same to SVB immediately so as to enable the review of the decision in force. The imported goods thereafter will be assessed provisionally with Extra Duty Deposit (EDD) equivalent to 1% of the Assessable Value. In case, there is any factual error or omission, the same shall be brought to the notice of this office suomoto by the importer without delay. 7. This order does not take into account any su....
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....16. It appears that the enhancement in the values was based on the Cost Sheet provided by the Appellant. We find that the SVB have not communicated to the Appellant the outcome of filing of Annexure-I to Circular dated 46/2016 for renewal of SVB order. 10. No speaking order was issued by the specified officer, MEPZ-SEZ for nearly a year despite many request letters and the Appellant filed an appeal before the Appellate Authority in respect of duty payment covering the Bill of Entry No. 18514 dated 05.10.2016 for clearance to their own branch. The Appellate Authority, prima facie, without going into the merits of the case, dismissed the appeal on the ground of limitation where no speaking order was issued by the Assessing Authority. The Appellant inadvertently failed to exercise the option of "Duty Payment under Protest" and discharged the duty on the said Bill of Entry dated 05.10.2016 on self-assessment basis. In spite of the Appellant intimating the assessing authority of MEPZ-SEZ vide letter dated 05.10.2016 that they are not in agreement with the valuation determined by the department and are discharging duty on higher value only to service their customers, the Specified Off....
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.....06.2020 on the principle of res judicata, being aware that the appeal preferred previously was with reference to clearances to the branch Unit on 05.10.2016 whereas the subject clearances against which appeal was filed before the authority was in respect of clearances during 24th to 29th January 2020 to their subsidiary company. Hence, we find that the impugned order is not legal or logical and requires to be set aside. 13. We find that Section 17 of the Customs Act, 1962 requires the importer to self-assess the duty. However, on verification, if the proper officer finds that the self-assessment is not done correctly, then he may re-assess the duty leviable on such import of goods. If the re-assessment is contrary to the self-assessment done by the importer, the proper officer is required to pass a speaking order on the re-assessment, within 15 days from the date of re-assessment of the Bills of Entry as per section 17(5) of the Customs Act. The adjudicating authority is under obligation to pass a speaking order disclosing the grounds for loading or enhancement in the declared value which was never complied with. We also find that the Instruction No. 07/2018-Customs dated 05 Ap....
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....ese cases on hand. Therefore, we reject the enhancement of assessable value in respect of the Bills of Entry which are involved in all the appeals being decided and we restore the assessable value as declared by the appellant in said Bills of Entry. 8. In result, we set aside all the impugned Orders-in-Appeal and allow all the appeals. The appellant shall be entitled for consequential relief, if any, in accordance with law." 15. We find that the Appellant had been discharging the duty on the enhanced values since 05 October 2016. As many Letters were addressed asking for a Speaking Order, which was not issued, we order that all the payments made since 05.10.2016 at enhanced values are to be treated as having been made under protest and the time limit prescribed under Section 27 of the Act will not be applicable and the refund application cannot be considered as time barred. CESTAT Bangalore in the case of Commissioner of Cus, C. Ex. & ST., Guntur Vs. Fairway Trading Company Pvt. Ltd. [2014 (10) TMI 506 - CESTAT Bangalore] held as follows:- "2. The facts in this case are very peculiar. The assessment is contrary to the law and the declaration filed was not accep....
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...., the impugned order dated 22.06.2020 of Commissioner of Customs (Appeals), Chennai deserves to be set aside, as there was no discussion in regard to blatant violation of principles of natural justice by the specified officer, MEPZ-SEZ in enhancement of the value unilaterally without intimating the reasons therefor. The appellant was forced to clear the goods to their DTA Unit at enhanced rates where the Special Valuation Branch, Chennai Customs after detailed investigation accepted the declared value as the transaction value. In case, there is any change in the method of invoicing or if any contemporary goods are imported at higher prices or for any other reason, the specified officer must have taken it up with the SVB, Chennai for review. 17. In view of the aforesaid discussion and appreciating the above case laws unilaterally enhancing the assessable value without issuing any speaking order though repeatedly asked for is in blatant violation of the procedures and absolutely bad in law. As such, the impugned order dated 22.06.2020 issue by the Lower Appellate Authority is devoid of any merits and is required to be set aside. We are of the considered view that the entire issue ....