TaxTMI 
TaxTMI 
2024 (9) TMI 170
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....le Mr. Justice Dilip Gupta, President And Hon'ble Mr. P.V. Subba Rao, Member (Technical) For the Department : Shri S.K. Rahman, Authorized Representative. For the Respondents : Shri K. Krishnamohan Menon, Ms. Parul Sachdeva & Ms. Priya, Advocates. ORDER JUSTICE DILIP GUPTA: M/s Century Metal Recycling Pvt. Ltd. [Century Metal] imported aluminum scrap of various grades and filed 28 Bills of Entry for clearing the consignment on the basis of self-assessment of duty on the transaction value. The Assessing Officer doubted the correctness of the value declared by Century Metal in the Bills of Entry and when confronted with contemporaneous data by the Assessing Officer, Century Metal not only submitted letters stating that the value declared in the Bills of Entry should be rejected, but also accepted the value proposed by the Assessing Officer. The value was, accordingly, enhanced by the Assessing Officer and Century Metal paid the differential duty of customs. The goods were also cleared after the out of charge order was issued by the Assessing Officer. Thereafter, Century Metal filed 28 appeals before the Commissioner (Appeals), Central Excise and CGST, Jaipur [the Commissioner (....
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....er rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [the 2007 Valuation Rules] and re-determined. On being confronted with such data, Century Metal submitted the following letter to the Assessing Officer in respect of one such Bill of Entry No. 8175381 dated 24.09.2018: "CENTURY METAL RECYCLING LIMITED To, The Assistant Commissioner of Customs, ICD Kanakpura Jaipur (Rajasthan) Subject: Enhancement of value of goods covered under Bill of Entry No. 8175381 dated 24/09/18 Proposing re determination of value and consequential reassessment of duty, in this regard it is submitted that we have been informed about grounds or rejection of our declared value under the provisions of Rule 12 of Customs Valuation (Determination of Value of Imported Goods) rules, 2017 read with Section 14 of Customs Act, 1962. We have also gone through and understood the details of contemporaneous imports of similar/identical goods, as informed by the Customs Department and we accept that the value declared by us is lower than the value at which identical/similar goods have been imported at or about the same time in comparable quantities and in comparable commer....
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....ect of Bill of Entry No. 8175381 dated 24.09.2018, it was specifically stated that the value of the goods imported should be enhanced on the basis of the contemporaneous data of similar/identical goods from US$ 940 to US$ 1628 under rule 9 of the 2007 Valuation Rules read with section 14 of the Customs Act in terms of the provisions of the section 17 (5) of the Customs Act. In the remaining 56 letters that were submitted by Century Metal and CMR Nikkei before the Assistant Commissioner of Customs, similar statements were also made. It also needs to be noted that both Century Metal and CMR Nikkei also stated that they were "in agreement and not aggrieved with the proposed enhancement of value". They also stated that in view of their acceptance of the said value, personal hearing may not be provided to them nor a speaking order should be passed in the matter. They also requested the Assessing Officer to re-determine the value and re-assess the Bills of Entry in accordance with the value proposed by them. 7. The Assessing Officer, in view of the categorical statements made by Century Metal and CMR Nikkei, re-assessed the 57 Bills of Entry in terms of the consent letters given by them....
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....Shri, S.K. Rahman, learned authorized representative appearing for the department made the following submissions: (i) The Assessing Officer had reason to doubt the accuracy of the value declared in the Bills of Entry submitted by the importers as they were grossly undervalued as compared to the contemporaneous import data and since the importers had submitted letters clearly stating that they accepted that the value declared by them in the Bills of Entry was on the lower side and, therefore, liable to be rejected under rule 12 of the 2007 Valuation Rules, and they also accepted the value of goods indicated by the Assessing Officer on the basis of data of contemporaneous import of similar/identical goods, and also stated that they did not want any personal hearing to be provided or a speaking order to be passed in the matter, and that the Assessing Officer should redetermine the value and re-assess the duty in accordance with the value proposed, the Assessing Officer committed no illegality in re-determining the value in terms of the value accepted by the importers. Subsequently, the goods were also cleared by the importers on payment of duty on the enhanced value after the out of....
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....de the following submissions: (i) The so-called 'consent/acceptance letters' which have been relied upon heavily by the Assessing Officer to adopt the enhanced value in terms of the 2007 Valuation Rules cannot be considered as consent letters as the same have been obtained under pressure to clear the goods to avoid any further delay; (ii) The value that has been enhanced by the Assessing Officer is exactly the value arrived at on the basis of London Metal Exchange [LME] price minus the discount given in the Director General of Valuation Circular. This clearly shows that the enhancement of value is not on the basis of contemporaneous import data, but is based on Director General of Valuation Circular, irrespective of the mention made in the consent letter by the importers that they have gone through the contemporaneous import data; (iii) Due to urgency of the matter and to mitigate losses, including demurrage charges, the importers had accepted the enhanced value. The importers, being regular importers, were left with no choice but to issue coerced letters; (iv) The importers were not furnished with NIDB/LME data documents relied upon for enhancement of the value. This viola....
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.... be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf: Provided *****" 14. It would be seen that section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. 15. Section 17 of the Customs Act deals with assessment of duty. It is reproduced below: "Section 17. Assessment of duty.- (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty....
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....ccepted: Provided that - (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 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) ***** (4) If the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9." 18. Rule 12 deals with rejection of the declared value and it is reproduced....
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....nts." 19. Sub-rule (1) of rule 3 provides that subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with rule 10. Sub-rule (4) of rule 3 provides that if the value cannot be determined under sun-rule (1), the value shall be determined sequentially through rules 4 to 9. 20. Rule 12 provides that 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 rule 3(1). Explanation (iii) to rule 12 provides that the proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons, which may include any of the six reasons contained therein, one of which is that there is a significantly higher value at whi....
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....in these appeals pertains to the transaction value/assessable value in respect of imported Aluminum Scrap, which was imported by the respondent herein. The respondent had imported various varieties of the said Aluminum scrap during the period 27th August, 2013 to 29th December, 2014 and filed 843 Bills of Entry along with invoices and purchase orders in respect therein declaring the transaction value of the imported goods for the purpose of paying Customs duty. The declared value was not accepted by the Assessing Officer who found the same to be low. Accordingly, the said declared value was rejected and reassessment was done by increasing the assessable value. ***** 3. The assessment order dated 25th March, 2015 passed by the Assessing Officer was challenged by filing appeals before the Commissioner (Appeals), Central Excise and Customs, Noida. All these appeals were dismissed. Challenging the order of the Commissioner (Appeals), the respondent approached the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the "Tribunal"). By the impugned common judgment dated 17th January, 2017 [2017 (7) G.S.T.L. 82 (Tri.-All.)], the appeals of the respondent wer....
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....n the Bills of Entry, Order-in-Original was, therefore, clearly erroneous. 14. In Commissioner of Customs v. Prabhu Dayal Prem Chand, (2010) 13 SCC 535 = 2010 (253) E.L.T. 353 (S.C.), this Court was confronted with almost same kind of fact situation. On the basis of the information received subsequently from the London Metal Exchange (for short, 'LME') to the effect that the price of the two metals, viz., brass scrap and copper scrap, in LME as on the date of import was more than the price declared by the respondent, demanded additional duty amounting to Rs. 90,248/- and Rs. 1,94,035 respectively, from the assessee on the said two Bills of Entry. This order was set aside by the Tribunal and appeals there against by the Customs were dismissed by this Court. The Court noted, while accepting the plea of the assessee, that they were not confronted with any contemporaneous material relied upon by the Revenue for enhancing the price declared by them in the Bills of Entry. It also noted the following remarks of the Tribunal: "In the present case as mentioned above, even though there is a reference to contemporaneous import in the order passed by the Deputy Commissioner no material r....
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....imported at or about the same time in comparable quantities and in comparable commercial transactions and so the value declared by them in the Bills of Entry should be rejected under rule 12 of the 2007 Valuation Rules and re-determined under rule 9 on the price made known to them by the Assessing Officer, which price they were accepting. The importers also specifically stated that because of the acceptance of the enhanced value, they did not want any personal hearing to be provided or a speaking order to be passed and that the value should be re-determined in accordance with the value as proposed by the Assessing Officer, and accepted by them. The Assessing Officer was, therefore, not required to give reasons for rejection of the transaction value and determination of the assessable value. 26. The judgment of the Supreme Court in Sanjivani Non-Ferrous Trading is, therefore, clearly distinguishable and would not be applicable to the facts of the present case. 27. The judgment of the Supreme Court in Commissioner of Customs vs. Prabhu Dayal Prem Chand [2010 (253) E.L.T. 353 (S.C.)] has been referred to in the aforesaid decision of the Supreme Court Sanjivani Non-Ferrous Trading. T....
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....ng order to be passed on the Bills of Entry, except in a case where the importers confirm acceptance of the value in writing. 30. It is no doubt true that the value of the imported goods shall be the transaction value of such goods when the buyer and the seller of goods are not related and the price is the sole consideration, but this is subject to such conditions as may be specified in the rules to be made in this behalf. The 2007 Valuation Rules have been framed. A perusal of rule 12(1) indicates that when the proper officer has reason to doubt the truth or accuracy of the value of the imported goods, he may ask the importer to furnish further information. Rule 12(2) stipulates that it is only if an importer makes a request that the proper officer shall, before taking a final decision, intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared and provide a reasonable opportunity of being heard. To remove all doubts, Explanation 1(iii)(a) provides that the proper officer can have doubts regarding the truth or accuracy of the declared value if the goods of a comparable nature were assessed at a significantly higher value at about the sam....
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....ression grounds for doubting the truth or accuracy of the value declared has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the reason to doubt exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared." (emphasis supplied) 33. The Commissioner (Appeals) completely failed to consider the consequences and impact of the letters that were submitted by Century Metal and CMR Nikkei to the Assistant Commissioner. Despite specific acceptance to the proposed enhancement of the value, it was sought to be contended by the importers in the appeals before the Commissioner (Appeals) that the transaction value of the imported goods alone should be treated to be the value of the goods and it could not be enhanced without following the procedure contemplated under the 2007 Valuation Rules. 34. As noticed above, both Century Metal and CMR Nikkei had specifically stated that the value of the goods declared by them in the Bills of Entry should be rejected under rul....
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....hout protest. By consenting to enhancement of value and thereby voluntarily foregoing the need for a Show Cause Notice, the appellant made it unnecessary for Revenue to establish the valuation any further as the consented value in effect becomes the declared transaction value requiring no further investigation or justification. To allow the appellant to contest the consented value now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no Show Cause Notice, could/would have invited allegation of harassment and delay in clearance of goods. When Show Cause Notice is expressly foregone and the valuation is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per ....
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....voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly." (emphasis supplied) 38. In Guardian Plasticote Ltd., the Tribunal after placing reliance on the decision of the Tribunal in Vikas Spinners, also observed as follows: "4. The learned Advocate also cites the decision of the Tribunal in the case of M/s. Vikas Spinners v. C.C., Lucknow - 2001 (128) E.L.T. 143 (Tri.- Del.) in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is estopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had lodged any protest and on the contrary their letter dated 21-4-1999 clearly points to acceptance of the enhanced value by them, the cited decision advances the cause of the department rather tha....
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....ng any export goods under Section 50, shall, save as otherwise provided in Section 85, self-assess the duty, if any, leviable on such goods. Sub-section (2) of Section 17 provides for verification of entries and self-assessment of goods referred to in sub-section (1) by the proper officer. Sub-section (4) of Section 17 provides for reassessment of duty by the proper officer where the self-assessment is not done correctly. Sub-section (5) provides that the proper officer shall pass a speaking order on the reassessment in matters other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing. 7. From the facts as stated in afore quoted Paragraph 2 and its sub-paragraphs of the counter affidavit, and the own documents of the petitioner filed as Annexure-1 to the counter affidavit, leave no manner of doubt that the petitioner himself has confirmed in writing his acceptance of reassessment. Therefore, there exists no occasion to pass a speaking order on the reassessment." (emphasis supplied) 43. Learned counsel for the respondents, however, submitted that the consent/acceptance letters relied upon by the Assessing O....
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.... letter of subrogation which was on a stamp paper, accepting Rs. 5,96,08,179 in full and final settlement of its claim under the policy and the relevant portion of the said letter dated 11-3-2011 was to the following effect: To, New India Assurance Co. Ltd. Regional Office Nehru Place, Tonk Road, Jaipur Dear Sir, That in consideration of claim amount of Rs. 5,96,08,179 (Rupees five crores ninety-six lakhs eight thousand one hundred seventy-nine only) (hereinafter referred as "claim amount") as full and final settlement amount of our Claim No. 330203/11/10/01/00100001 arising under Policy No. 330203/11/09/11/00000018 (hereinafter referred as "policy") covering fire loss of my/our factory situated on Plot No. SPL 3, Sitapur, Industrial Area, Jaipur (hereinafter referred as "factory premises") due to fire that took place in IOC Terminal on 29-10-2009, we hereby subrogate our rights on behalf of M/s. Genus Power Infrastructures Limited, Jaipur (hereinafter referred as "insured") in favour of New India Assurance Co. Ltd. (hereinafter referred as "insurer") ***** ***** 4. After nearly three weeks i.e. on 31-3-2011 the respondent issued a notice to the appellant stating ....
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....id amount in full and final or the Respondent Company will not pay any amount toward the fire policy. It was under such compelling circumstances that the Petitioner company was forced and under duress was made to sign the acceptance letter." 10. In our considered view, the plea raised by the Respondent is bereft of any details and particulars, and cannot be anything but a bald assertion. Given the fact that there was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice dated 31.03.2011 itself was nearly after three weeks and that the financial condition of the Respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence. Such discharge and signing of letter of subrogation was voluntary and free from any coercion or undue influence. In the circumstances, we hold that upon execution of the letter of subrogation, there was full and final settlement of the claim. Since our answer to the question, whether there was really accord and....
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.... 10.10.2012 and after 12 days thereafter, i.e., only on 24.10.2012, the contractee-Company withdrew letter dated 21.09.2012 issuing "No Dues/No Claim Certificate". Apart from it, we also find that the Final Bill has been mutually signed by both the parties to the Contract accepting the quantum of work done, conducting final measurements as per the Contract, arriving at final value of work, the payments made and the final payment that was required to be made. The contractee-Company accepted the final payment in full and final satisfaction of all its claims. We are of the considered opinion that in the presents facts and circumstances, the raising of the Final Bill and mutual agreement of the parties in that regard, all claims, rights and obligation of the parties merge with the Final Bill and nothing further remains to be done. Further, the appellant-Contractor issued the Completion Certificate dated 19.06.2013 pursuant to which the appellant-Contractor has been discharged of all the liabilities. With regard to the issue that the "No- Dues Certificate" had been given under duress and coercion, we are of the opinion that there is nothing on record to prove that the said Certificate h....
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..... The contention of the learned counsel for the respondents that the importers had been coerced to submit letters has to be examined in the light of the principles enunciated by the Supreme Court in the aforesaid decisions. 50. In the present case, there is nothing on the record which may even remotely suggest that the importers had been coerced into submitting the letters. The importers had not made any grievance before any higher authority of the department that they had been coerced to give the consent/acceptance letters. It is only after the clearance of the goods that the importers filed appeals before the Commissioner (Appeals) challenging the enhancement of the value alleging that they had been coerced into giving consent letters. Statements made by the importers are mere bald statements without any material to substantiate the same. 51. All that has been stated by the importers is that due to urgency of the matter and to mitigate losses, including demurrage charges, they had accepted the enhanced value in the letters. These are mere statements without any specific details. They do not even give the names of the officers of the department who coerced them to submit letters....
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.... be issued or a speaking order to be passed and subsequently, when the Assessing Officer enhanced the value based on the consent letters given by the importers and the goods were cleared after the differential customs duty was paid and the out of charge order was issued, they filed appeals before the Commissioner (Appeals) raising a grievance that neither the Assessing Officer followed the procedure prescribed under the 2007 Valuation Rules nor was a speaking order passed, in which case the Commissioner (Appeals) would allow the appeal and after setting aside the order of the Assessing Officer enhancing the value, restore the transaction value indicated by the importers in the Bills of Entry. In this way the importers succeed in restoring the value mentioned in the Bill of Entry without any determination by the Assessing Officer of the assessable value. The allegation regarding coercion, therefore, appears to be a well thought of plan to preclude the Assessing Officer from determining the correct value of the imported goods in accordance with the procedure contemplated under the 2007 Valuation Rules. 54. Learned counsel for the respondents, however, placed emphasis on the judgment....
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....s on the basis of the evidence before the authorities and the material placed on record and the enquires conducted by the assessing authority. 55. This judgment of the Supreme Court in Century Metal Recycling would not be applicable to the facts of the present case. In the first instance, the letters submitted by the importers in the present case do not state that the importers were in urgent requirement and wanted clearance of the goods, nor any letters had been sent prior to the letters in issue. The finding recorded by the Supreme Court in Century Metal Recycling was based on the facts of that particular case, as has also been noted by the Supreme Court, namely that there was a delay by the customs officers after the submission of the Bills of Entry. 56. In the present case, the importers had very categorically stated that the value indicated in the Bills of Entry should be rejected under rule 12 of the 2007 Valuation Rules and the value indicated by them should be taken as the value determined under rule 9 of the 2007 Valuation Rules. The importers also specifically mentioned that for this reason, a show cause notice may not be issued to them nor a speaking order should be pa....
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..../52026/2019 05.11.2018 13.11.2018 52 C/52027/2019 06.11.2018 13.11.2018 53 C/52028/2019 06.11.2018 13.11.2018 54 C/52029/2019 06.11.2018 13.11.2018 55 C/52030/2019 02.11.2018 13.11.2018 56 C/52031/2019 05.11.2018 13.11.2018 57 C/52032/2019 05.11.2018 13.11.2018 58. It is, therefore, not possible to accept the submission made by the learned counsel for the respondent that the importers were coerced into giving their consent/acceptance. 59. Learned counsel for the respondents also contended that the value that has been arrived at is on the basis of LME price of prime metal minus the discount given in the Director General Valuation Circular and, therefore, it can said that the enhancement value is not on the basis of contemporaneous import data but on the basis of LME price. 60. This contention of learned counsel for the respondents cannot also be accepted. In the letters written by the importers, they clearly stated that the contemporaneous data was shown to them and they readily accepted the value proposed by the department. Once having accepted the value proposed by the Assessing Officer, it is not open to the importers to now contend that the value sho....
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....after having also mentioned that the re-determined value under rule 9 of the 2007 Valuation Rules was acceptable to them, can the importers raise this issue in the appeals. It is difficult to accept the contention of learned counsel for respondent that despite having accepted the enhanced value in very categorical terms in the letters, the importers can still challenge the enhancement of the value and contend that it has not been properly determined under the 2007 Valuation Rules. 66. It is well settled that what is admitted is not required to be proved by the department. This issue has been settled by the Supreme Court in Systems & Components and the relevant portion of the judgment of the Supreme Court is reproduced below: "5. The Appeal filed by the Department has been disposed of by the Tribunal by holding that the Department has not proved that these parts were specifically designed for manufacture of Water Chilling Plant in question. The Tribunal has noted the Technical details supplied by the Respondents and the letter of the Respondents dated 30th November, 1993 giving details of how these parts are used in the Chilling Plant. The Tribunal has still strangely held that t....