TaxTMI 
TaxTMI 
2025 (3) TMI 635
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....- was also imposed under Section 114AA of the Customs Act on M/s. S.K. Works and Vyapar Private Limited (hereinafter referred to as the "appellant"). A penalty of Rs.24,46,788/- under Section 114A and a penalty of Rs. 50,00,000/- under Section 114AA of the Act were also imposed on Shri Shalabh Jalan, Director of the appellant-company(one of the appellants herein). 2. Aggrieved by the confirmation of the demands and imposition of penalties and redemption fine, the appellants have filed these appeals. 3. The facts of the case are that the appellant-company, M/s. S.K. Works & Vyapar Pvt. Ltd., imported 3 consignments of different consumer goods such as bowl sets, buckle, elastic rope button cells, garment accessories, umbrella, bags, etc., in the month of February, 2014 from M/s. Lakshmi Overseas Hong Kong Limited, Hong Kong. The total value of these consignments was USD 33,293.48 (C&F). Accordingly, the appellant filed 3 Bills of Entry after adding insurance charge as 1.125%, as per norms. The details of the Bills of Entry, as submitted by the appellants, are furnished below: - Sl. No. Bill of Entry No. Date Declared Ass. Value (in Rs.) Admitted duty (in Rs.) ....
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.... in Table No. 4 & 5 at above) under the provisions of Rule 5 of the CVR, 2007 read with Section 14 of the Customs Act, 1962. 21.3. I order re-determination of MRP/RSP of the goods imported as detailed in Table No. 4 at above in terms of provision to sub-Section (2) of Section 3 of Customs Tariff Act, 1975 read with section 44 of the central Excise Act, 1944. 21.4. 1 order demand and recovery of the differential duty amounting to Rs. 24,46,788/- under section 28 (4) of the customs Act, 1962 along with interest under Section 28AA of the Customs Act, 1962 from the importer. 21.5. 1 order appropriation of the already paid duty of Rs. 10,65,171/- and Revenue deposit of Rs. 7,20,695/- and Bond of Rs. 61,71,413/- furnished at the time of provisional release of goods imported vide the said three Bills of Entry towards the duty demand of Rs. 24,46,788/- as detailed in Table No. 5. 21.6. I order confiscation of the goods imported vide Bills of Entry Nos. 4746451 dated 26.02.2014, 4746281 dated 26.02.2014 and 4720638 dated 24.02.2014 and valued at Rs.22,43,617/- Rs. 16,08,490/- and Rs.88,77,874/-respectively (as detailed in Table No. 4 & 5 at above) under S....
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.... the transaction value declared in the invoices. It is submitted that in the impugned order, the ld. adjudicating authority has accepted that there is no corresponding value available for identical items and hence, the value could not be determined in terms of Rule 4 of the Valuation Rules, 2007; finally, the value of similar goods has been taken into consideration for re-determining the value under Rule 5 of the Customs Valuation Rules. In this regard, the appellant submits that the invoices submitted by the importer-firm at the time of import has been rejected by the ld. adjudicating authority as false and without any evidence, but sufficient materials were not placed on record by the ld. adjudicating authority for rejection of the invoices issued by the supplier. 7.3. The appellant has also made the following submissions in support of their contentions: - (i) In respect of the allegation at Para 12 of the SCN that the invoice submitted at the time of import was false / wrong invoice, the appellant submits that the supplier had already admitted their mistake in wrong shipment of goods vide a letter dated 22.03.2014. Therefore, the invoice should not be held as false /....
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....egation of extra payment for the difference in value through any other channel other than normal banking channel. Therefore, the transaction value should not be rejected. It is a settled principle of law that transaction value should not be rejected in the absence of any allegation of extra payment. In this regard, the appellant cited the following decisions : a) Rajashree Packagers-(2006(195) ELT 254 (Tri-Bang)] in the absence of any allegation of extra payment, transaction value cannot be rejected; b) Bayer India Ltd-[2006(198) ELT 240 Tri)]- Rule 10A of CVR'88 can be invokedonly if there is doubt as to genuineness of transaction value between exporter and importer such as in the event of extra remittance c) CC Vs- Radheshyam Ratanlal-[2006 (202) ELT 500 (Tri-Mum)]- there was no evidence that there was a flow back of any additional funds from the importer to the supplier and hence held the transaction value to be genuine which was affirmed by the Supreme Court-2007(210) ELT A 72. (v) In Para 8 of the Show Cause Notice it has been stated that the contemporaneous import data of identical and similar goods was accessed and it was found that id....
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....f all three types of button cells were taken as same. From this, it is evident that the RSPs were proposed arbitrarily without any basis and thus needs to be ignored. (viii) Regarding the excess goods found, the appellant submitted that the investigation at Para 5 of the notice mentioned that the Director had already explained to the investigation on 11.09.2014 while giving statement that the overseas supplier had admitted their mistake. They had confirmed that due to heavy pressure in their warehouse and just before the Chinese New Year, some mistakes were made during loading of goods of various customers and hence mis-match of the goods occurred. The supplier had also forwarded the amended invoice and packing list which were submitted before the department. Thus, it is clear that there was no mala fide intention on their part to import excess goods. Therefore, the goods should not be liable for confiscation. (ix) The importer further submitted that even assuming but not admitting that re-determination of higher value in terms of Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, is sustainable in law, it did not necessarily mean mis-declarati....
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....onfiscation under Section 111 of the Customs Act, 1962, penalty may be imposed on them under Section 112(a) of the Customs Act, 1962. However, since there is no proposal for penalty under Section 112(a) of the Customs Act, 1962 in the SCN, the same cannot be imposed. (xv) The SCN proposes penalty under Section 114A against them. The mandatory penalty under Section 114A is imposable where the duty has not been levied or has been short levied by the reason of collusion or any wilful mis-statement or suppression of facts. This means that when the demand is required to be issued invoking larger period of five years under Section 28(4) of the Customs Act, 1962, then only Section 114A comes in the picture. (xvi) Firstly, the subject case was not at all a case of non-levy or short levy of duty/interest. Before provisional release of the goods, excess goods were detected and the higher values of all the goods including the excess goods were estimated by the department itself. Consequently, they have paid the difference of duty or Rs. 7,20,695/- and furnished bank guarantees for Rs. 6,14,827/- Rs. 13,40,963/- and Rs. 5,00,896/-.Thus it is clear that short levy of duty, if ....
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....he Customs Act, 1962 cannot be invoked in the instant case since the goods were physically imported and neither of the documents were false or incorrect. Therefore, no penalty can be imposed on him legally and therefore, the proceedings may be dropped. 8. The Ld. Authorized Representative of the Revenue submitted that the excess quantity was found only upon examination of the goods and hence, the appellant had resorted to mis-declaration of the goods imported. He also submitted that the value declared in the invoices were found to be very low as compared to similar goods imported t other locations. Thus, the value has been enhanced on the basis of value of similar goods available at contemporaneous imports. Thus, mis-declaration of the quantity of the goods imported and under valuation of the goods imported have been established. Accordingly, he justified the enhancement of value as per Rule 5 of the Customs Valuation Rules, 2007. Thus, he submits that the goods are liable for confiscation and both the appellants and the Director of the Appellant-company are liable for penalty. 8.1. In view of the above submissions, the Ld. Authorized Representative of the Revenue supported t....
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.... KGs Not Declared 50 50 8 Garments Accessories (Broach) KGs Not Declared 540 540 9 Garments Accessories (Fabric Toy) KGs Not Declared 28 28 10.1. From the above, we observe that that in respect of some goods declared in the Bills of Entry, the quantities were found to be in excess than the declared quantity. Some of the items were found to be not declared. The appellant submits that this was the mistake of the supplier while loading the goods and they cannot be held responsible for the mistake of the supplier. The appellant submitted that when the issue was taken up with them, the supplier agreed to their mistake and corrected the invoice and sent the revised invoice and packing list, but the Department has not accepted it. 10.2. We observe that the confiscation of the impugned goods have been done on account of mis-declaration of quantity as well as mis-declaration of value. 10.3. Regarding mis-declaration of quantity and non declaration of goods, we observe that the explanation given by the appellant that the supplier has loaded excess goods by mistake is not acceptable. The appellant has fa....
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.... there no material in the show cause notice or in the impugned order to substantiate this finding but the price of imported Mancozeb which was fixed at US $ 2.10 per kg. in view of the long term agreement is to be treated as the transaction value and the price fluctuation in the international market will not affect assessment of the goods in the importing country and the local selling price of the formulation made from the imported goods will also not affect such price, as per para 4 of the Explanatory Note 1.1 of Technical Committee on Customs Valuation, World Customs Organization which clarifies that " consequently, provided that the conditions prescribed in Article 1 are fulfilled, the transaction value of imported goods should be accepted irrespective of any market fluctuations after the date when the contract was concluded." 13. The Commissioner has held that the transaction between Bayer and R&H is not under fully competitive condition. This is not relevant for the purpose of the present appeal as the requirement that transaction value is to be accepted only when the transaction between the importer and the exporter are under fully competitive condition came into for....
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....issions. We find that the Revenue has challenged the value only in respect of consignments where cloves of Zanzibar origin were imported and not the cloves imported during the period July, 1999 which were of Indonesian origin even though the prevailing international market price as per the department was much higher when initially all the consignments were assessed at US $1800 PMT. The main ground of the Revenue's appeal is that as per the Supreme Court decision in Rajkumar Knitting Mills (P) Ltd. case the contract value cannot be accepted once the import is at a time much later than the time of entering into contract specially when the international market prices has gone up quite considerably. It has been presumed by the Revenue that once the goods are not supplied within the contracted period, the balance supply cannot be considered as per the terms of the contract. We are afraid that the facts as brought out in the Order in Original and the facts narrated in the memorandum of appeal do not support the department's contention. The facts clearly state that the supplier was unwilling to fulfil the contractual obligation and it was only with the intervention of the DGFT and the Ind....
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....y penalty on the person who is liable to pay the duty and in this case the importing company is liable to pay duty. Hence, penalty equal to the differential customs duty which is confirmed on account of mis declaration in quantity/ non declaration is liable to be imposed on the appellant-company under section 114A of the Customs Act, 1962. Even though the appellant-company has claimed that the mis-declaration has occurred on account of the mistake of the supplier, we do not agree with the contention of the appellant in the absence of any evidence in support of their claims. Thus, we hold that the appellant-company is liable to be penalized for mis-declaration of the goods, under Section 114A. However, we hold that such penalty should commensurate with the quantity mis-declared only. 11.1.1. Regarding the penalty imposed on the Director of the appellant company under Section 114A ibid., we find that the show cause notice neither discussed any role on his part nor there are any allegations against him which would render him liable to any penalty. Section 114A provides for imposition of mandatory penalty on the person who is liable to pay the duty and in this case the importing com....