TaxTMI 
TaxTMI 
2024 (7) TMI 121
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....both Basic Customs Duty (BCD) as well as Additional Duty of Customs (CVD). 1.2 On the basis of such intelligence, the officers of DRI searched the office premises of the appellants and seized certain import documents and files etc., under panchanama dated 03.05.2018. On scrutiny of the seized documents/files, they observed that the appellants had imported 47 consignments of perfumes and deodorants of Rasasi brand of Dubai during the period October' 2013 to November' 2015; that out of those 47 imports, in respect of 44 imports, the appellants had filed the Bills of Entry (B/Es), declaring their products in rupee terms per dozen, instead of declaring the MRP per piece; and that with regard to the remaining 3 B/Es, the appellants had declared the MRP per piece of the product. During the course of investigation, the department had recorded the statements of Shri Abdul Hafiz Reshamwala, Partner of the appellants firm; Shri Rajendra Kumar Tripathy of M/s Chitalia Logistics Pvt. Ltd. and Shri Vidyadhar M. Thatte, country Head of M/s Rasasi Perfumers Pvt. Ltd. under Section 108 of the Customs Act, 1962. 1.3 Based on the seized records and the statements recorded from various persons,....
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....ion of penalties on the appellants. 1.5 In support of the above proposals made in the SCN, the DRI investigation had provided the following grounds: (i) That a conspiracy was hatched by Shri Abdul Hafiz Reshamwala, Partner of M/s. Goodwill International with their overseas supplier M/s. Al Rasasi International for undervaluing the perfumes and deodorants supplied to them. (ii) On the basis of the understanding between Shri Abdul Hafiz Reshamwala Partner of M/s. Goodwill International with their overseas supplier, M/s. Al Rasasi International issued invoices showing a lesser value than the actual price for the perfumes and deodorants supplied by them to M/s. Goodwill International. (iii) The Invoice issued by M/s. Al Rasasi International bearing No. 388/13/CM dated 08.12.2013 filed along with B.E. No.4269739 dated 06.01.2014 and invoice No.428/14/CM dated 16.12.2014 filed along with B.E. No. 8027305 dated 19.01.2015 showed the actual value of the perfumes and deodorants supplied by them to the appellants M/s. Goodwill International and the MRP for the said products said to have been declared by the supplier in the said two bills ....
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.... is contended that the value declared in the B/Es, which are based on the invoices issued by the overseas supplier, should be considered as the 'transaction value' in terms of Section 14 ibid for payment of the Customs duty, which had been properly discharged by the appellants and also accepted by the proper officer at the time of assessment of the B/Es. 2.2 Learned Advocate has strenuously argued that reference made on the B/Es Nos. 4269739 dated 06.01.2014 and 8027305 dated 18.01.2015 in the impugned order to conclude that the value declared therein has to be considered as the proper value for the purpose of duty assessment is not in conformity with the statutory provisions. He submitted that the goods imported by the appellants through Nhava Sheva Port (44 nos. of consignments) were not in retail packaging, but were imported in packages, containing one dozen pieces each, meant for sale to various wholesalers. Further, it has also been stated that the quantities imported by the appellants were enormous and were absolutely incomparable with the minuscule quantities imported in the above referred B/Es. In this connection, learned Advocate submitted that total units importe....
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....the appellants were not selling the said products in retail, but were selling the entire package in the condition, in which these were imported. Thus, he stated that the provisions of Drugs and Cosmetics Act, 1940 and the rules framed thereunder should be applicable to the goods imported by the appellants, and not the Legal Metrology (Packaged Commodities) Rules, 2011. 3. Shri Adeeb Pathan, learned Authorised Representative (AR) appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that the department's action in re-determination of the RSP is justified, where ever it is noticed that there is under valuation of the goods. Learned AR also submitted that affixation of MRP/RSP is a statutory requirement to be complied by the importer dealing in packaged commodities in terms of Legal Metrology (Packaged Commodities) Rules, 2011; since, the appellants had not complied with the requirements contained therein, confirmation of the adjudged demands in the impugned order is in conformity with the statutory provisions. 4. Heard Shri Zubin Sheth, learned Advocate for the appellants and Shri. Adeeb Pathan, learned AR for Revenue and e....
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....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 some 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 10 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) below. (3)(a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely a....
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....ifferences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods." Rule 12. (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is h....
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....cker, of the packer; (b) the identity of the commodity contained in the package; and (c) the total number of retail package contained in such wholesale package or the net quantity in terms of standard units of weight, measures or number of the commodity contained in wholesale package: Provided that nothing in this rule shall apply in relation to a wholesale package if a declaration similar to the declarations specified in this rule, is required to be made on such wholesale packages by or under any other law for the time being in force." Drugs and Cosmetics Rules, 1945. "129H. Labeling and Packing of Cosmetics.- No cosmetic shall be imported unless it is packed and labeled in conformity with the rules in Parts XV. Further the label of imported cosmetics shall bear registration certificate number of the product and the name and address of the registration certificate holder for marketing the said product in India. PARTXV LABELLING, PACKING AND STANDARDS OF COSMETICS 148. Manner of labelling.-Subject to other provisions of the rules, a cosmetic shall carry-(1) on both the inner and outer labels: (a)....
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.... which had not been objected to by the department by taking recourse to sub-section (4) of Section 17 ibid, ordering for re-assessment of the same. We find that the learned adjudicating authority has revised the assessable value in respect of the disputed 44 B/Es on the basis of the MRP/RSP mentioned in the balance 3 nos. of B/Es (used by M/s Al Rasasi for their retail store), and not on the basis of transaction value as defined in Section 14 ibid. 7.3 We find that the learned adjudicating authority has not analyzed the provisions contained in Section 14 ibid read with Rule 3(1) ibid in their proper prospective with regard to determination of the transaction value on the goods imported by the appellants into the territorial waters of India. In context with determination of transaction value, the law is well settled by the Hon'ble Supreme Court, in the case of Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai - 2000 (122) E.L.T. 321 (S.C.) that if the transaction value cannot be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), then there is no question of determining the value under subsequent rules. Though, the said judgement was....
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....9 (365) E.L.T. 3 (S.C.), wherein it has inter alia, been held that the normal rule was that the assessable value has to be arrived at on the basis of the price which was actually paid, and that mentioned in the B/Es. Thus, in the present case, there was no basis for rejection of the transaction value. The learned adjudicating authority has distinguished the above judgments, holding that the RSP declared by the appellants in those disputed B/Es was 10-20 times less than the actual RSP declared in the two nos. of B/Es (supra). Such findings of the adjudicating authority, in our considered view, are not in conformity with the statutory provisions inasmuch as the RSP at which M/s. Rasasi Perfumers Pvt. Ltd., intended to sell the goods from their retail outlets cannot possibly be the actual RSP, at which the appellants intended to sell the goods (wholesale packages) from their premises. 8.1 In the case in hand, the department has only considered the prices indicated in the invoice nos. 388/13/CM dated 08.12.2013 and 428/14/CM dated 16.12.2014 issued by M/s Al Rasasi International, Dubai (corresponding B/Es nos. 4269739 dated 06.01.2014 and 8027305 dated 19.01.2015) and the statements....
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....11552 9204 120756 21 320/14/cbm 16/09/2014 76260 32220 108480 22 343/14/cbm 28/09/2014 120756 - 120756 23 355/14/cbm 13/10/2014 63360 31260 94620 24 386/14/cbm 11-10-2014 50592 39444 90036 25 412/14/cbm 27/11/2014 121248 - 121248 26 431/14/cbm 17/12/2014 53436 47964 101400 27 007/15/cbm 15/01/2015 121800 - 121800 28 018/15/cbm 28/01/2015 43932 40332 84264 29 031/15/cbm 24/02/2015 121812 - 121812 30 035/15/cbm 03-01-2015 107724 2868 110592 31 043/15/cbm 16/03/2015 121800 - 121800 32 061/15/cbm 14/04/2015 128568 - 128568 33 071/15/cbm 26/04/2015 79872 26280 106152 34 081/15/cbm 05-12-2015 128508 - 128508 35 088/15/cbm 05-12-2015 125516 - 125516 36 112/15/cbm 16/06/2015 69660 30432 100092 37 136/15/cbm 07/08/2015 66156 29772 95928 38 155/15/cbm 26/07/2015 85296 15960 101256 39 198/15/cbm 09-10-2015 121836 - 121836 40 203/15/cbm 09-10-....
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.... Pvt. Ltd. was only 0.57%, as compared to the imports made by the appellants for their wholesale business during the disputed period. Further, the facts are not under dispute that the appellants had imported the goods for their wholesale business in India; where as, the overseas supplier had supplied the goods for exclusive sale in retail through its outlet(s) located in India, that too, in a minuscule quantity. The dealings of a wholesaler vis-à-vis a retailer cannot be considered at the same commercial level. Thus, determination of value under Rule 4 ibid cannot be resorted to by the department under the above factual matrix. 8.4 We find that Shri Abdul Hafiz Reshamwala, Partner of the appellants' firm in his statement recorded under summon, had inter alia, stated that M/s Rasasi could not sell the products at the MRP fixed by them and as a result, they made huge losses and shut down their retail business in India. We find support from such submissions through the audited Profit and Loss account of M/s Rasasi Perfumers Pvt. Ltd., prepared for the relevant period, showing the cumulative loss of Rs.2,45,90,606/- incurred by them. Thus, we are of the view that M/s Ra....
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.... Whether Rasasi Dubai issues invoices as per instruction of purchaser? Ans no. 6 No. Q. No. 17 Does Rasasi Dubai have different qualities/varieties of perfumes by the same name? Ans no. 17 Yes. Q. No. 18 What do you have to say about the DRI allegations that Rasasi Dubai sent incorrect invoices at lower value for the perfumes sold to Goodwill? Ans no.18 No. 8.6 In view of the fact that the statements recorded from the persons do not attribute any mala fides on the part of the appellants, we are of the view that placing reliance on such statements by the department cannot be a defensible ground for rejection of the transaction value and for re-determination of the same by taking recourse to Rule 4 ibid read with Rule 12 ibid. 9.1 We find that the learned adjudicating authority has confirmed the differential demand of Basic Customs Duty (BCD) by adopting to the deemed value based on MRP, for arriving at the transaction value. The valuation of goods for the purpose of computation of BCD amount has to be in accordance with Section 14(1) ibid and has thus, to be....
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....the intermediary and not directly to the consumers. In other words, the goods purchased in bulk by the intermediary from the appellants are subsequently sold to the consumer in smaller quantities. The appellants herein are exempted from complying with the provisions of Rule 24 ibid for furnishing declaration on the wholesale package in view of the proviso contained in the said rule. The proviso clause contained in Rule 24 ibid is applicable in the case, where the declarations have to be furnished in the wholesale package as per any other law applicable at the relevant point of time. 9.3 In respect of imported cosmetics, the Drugs and Cosmetics Act, 1940 and the rules framed there under are required to be complied with by the importer/dealer of such goods. Rule 129H of the Drugs and Cosmetic Rules, 1945 provides that no cosmetic shall be imported, unless it is packed and labelled in conformity with the rules provided in Part XV therein. The said provision also mandates that the label of imported cosmetics shall bear the registration certificate number of the product and the name and address of registration certificate holder, for marketing the said product in India. I....