TaxTMI 
TaxTMI 
2025 (6) TMI 1023
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....upported by commercial invoice No. NIL dated 23.11.2013 issued by on Capt. Will Frei, Switzerland. On physical examination of the consignment on 21.01.2014, on first check basis, prima facie, it appeared that the imported articles were antiques and classifiable under CTH 97060000. Consequently, a query was raised on 01.02.2014, registered in the EDI system, which directed the appellant/importer to produce necessary evidences in support of export of antiques from the country of export as per rules of Switzerland for export of such items as required under the Policy and documents relating to valuation of the items by an expert. Thereafter investigation was initiated after receiving the response from the appellant that there was clerical mistake in declaring the classification of the goods. After receiving the report from the Archaeological Survey of India that the goods in question were antiques by the letter dated 29.04.2014, the Department approached the Archaeological Survey of India to inform the value of the imported items and consequently on the suggestion of Department of Archaeological, a expert committee was constituted to assess the correct value of the imported antiques an....
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....igh Court and by order dated 30.09.2014, the Department was directed to complete the investigation and adjudication proceeding within two months from the date of receipt of the order. 3.2. Assailing the impugned order, which relied only the opinion of the Committee of valuation, the learned advocate has submitted that absolutely no evidence has been attached to show as to how the committee arrived at the valuation except the valuation figures in their report. No evidence of past sale, results of comparable objects sold through international auctions etc. have been provided. They have submitted auction sale prices of over 150 comparable objects supporting their transaction value during the recording of the statement of the Managing Director, no questions were asked disputing the valuation arrived at by them. They have submitted that no documentary evidence whatsoever supplied to support the valuation arrived at thus making it as a guesswork which can vary from person to person, depending on the individual taste and preference for art. The learned Commissioner ignored the 150 examples of objects of similar size and medium that were sold in the international market as filed by the ....
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....ing to put these figures. She later contradicted her earlier claim by saying that she referred to auction catalogues. She also said that she would furnish these catalogues afterwards. • She further admitted that she has never come across terra-cotta objects having similar value. When questioned as to why some objects of varying size and condition were given the same value the question was disallowed by the authorities. She also admitted that in her lifetime she has only done valuation once and they were bronze items. But she further admitted that she has never valued a similar type of bronze before. She also admitted that she has no proof or comparable to support the values. • As regards her claim that the goods were illegally exported she stated that as per her knowledge these objects were not submitted before the ASI for obtaining any export permit. However she admitted that this procedure only started after the enactment of the Antiquities Act (1972). She could not answer the question whether the objects could have been exported prior to the Act. Instead she dodged the question by repeating her earlier answer. It may be noted that she accepted that she ....
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....ve his valuation and hence deliberately escaped the cross-examination. Therefore his opinion in this matter stands worthless, null and void. • Also, the Respondent sought to avoid the cross-examination of Dr. Nagaswamy by citing the need to dispose the matter expeditiously on account of the order in WPC 34032/2014 of the Hon'ble High Court. The respondent claims that they have made substantial compliance to the order of the Court. It is submitted that the High Court had issued the above order under the writ jurisdiction. Substantial compliance of a writ is no good compliance. Though the Court ordered for cross-examination of all three members of the committee, the Respondent has tried to willfully evade the cross-examination of third member. Therefore, the respondent has acted in gross contempt of the Hon'ble High Court and violated Article 14 of the Constitution by issuing Annexure P-24 order. Hence, it is submitted that the Independent Expert committee is fraught with arbitrariness and illegality right from its constitution to the stage of cross-examination of its members. Therefore, the valuation adopted by the committee is liable to be rejected and the valu....
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....s submitted that the valuation of the imported goods has been arrived at under Rule 9 of the CVR 2007 disregarding the spirit and essence of the entire provisions of that rule. The learned Commissioner has not considered the price at which like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in course of international trade. Further, Clause 2(vii) of Rule 9 states that valuation under Rule 9 should not be done on the basis of arbitrary or fictitious values. Both members of the expert committee, who were cross-examined, had averred that the valuation has been completed on the basis of factors such as aesthetics and approximate period of the antiques. Thus, the valuation arrived at by the committee is based on fictitious and arbitrary values. Further, assailing the direction of the adjudicating authority to hand over the objects to the museum was to avoid a public auction which would disclose the true value of the goods. The learned advocate for the appellant pleaded that an order be passed for auction of the goods publicly within three months at a reserve price not lesser than that arrived at by the said valuation committee. 3.6. Fu....
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....f the Customs Act, 1962 and consequently, the judgments cited by the adjudicating authority is inapplicable to the facts of the present case. Further, assailing the confiscation under Section 111(m) of the Customs Act, 1962, he has submitted that the declaration of the goods under CTH9705 in the Bill of Entry was made on the basis of the documents produced by the exporter. He has submitted that it is a general practice under customs procedures to prepare bills of entry on the basis of the documents supplied by the exporter. In support, he has referred to the judgment of the Tribunal in the case of Kirti Sales Corporation Vs. CC, Faridabad [2008 taxmann.com 845 (New Delhi - CSTAT]. Also, he has submitted that the declaration made in a bona fide manner on the basis of import documents is called as wrong declaration and not misdeclaration as held in the case of Northern Plastics Ltd. Vs. CC&CE [1998(101) ELT 549 (SC)]. Thus, the confiscation under Section 111(m) of the Customs Act, 1962 is also unsustainable. Further, he has submitted that in the show-cause notice, there is no proposal for absolute confiscation; therefore, the appellant was denied the right of redemption of the goods ....
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.... in contravention of the Import and Export Policy attain the character of prohibited goods. In support, reliance is placed on the case of OM PRAKASH BHATIA Vs. COMMISSIONER OF CUSTOMS, DELHI 2003 (155) E.L.T. 423 (S.C.) and FAROKH S. TODYWALLA Versus COMMR. OF CUS. (IMPORT) ACC, MUMBAI-III 2015 (319) E.L.T. 165 (Tri. - Mumbai) wherein it has been held that violation of policy conditions render the goods as prohibited goods and confiscation is justifiable. 4.4. Learned AR for the Revenue has further submitted that the appellant has grossly misdeclared the description as well as transaction value of the imported 19 objects, accordingly the learned adjudicating authority has rightly rejected the transaction value under Rule 12 of the CVR 2007. After proceeding sequentially by analysing Rules 4, 5, 6, 7 and 8 of the CVR 2007, the learned Commissioner adopted Rule 9 of the said Rules for determination of the transaction value nearest to the value as recommended by the expert committee appointed by the Department in consultation with the Archaeological Survey of India. He has submitted that the value arrived at by the expert committee cannot be questioned since no other contrary exper....
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....objects. Consequently, a committee was constituted comprising of Dr. N. Nagaswamy, Director(Retd.), State Department of Archaeology, Chennai; Dr. Satyabhama Badreenath, Regional Director, Bangalore; Dr. Arundhati Banerji, Director(Retd.), ASI and Dr. Balasumbramanian, Curator, Govt. Museum, Chennai by letter dated 21.102014 of Superintending Archaeologist, Thrissur. Later, the committee comprising of Dr. N. Nagaswamy,; Dr. Satyabhama Badreenath,; Dr. Arundhati Banerji, and Dr. Balasumbramanian examined the 19 imported objects on 18.11.2014 and arrived at the value of each item totalling to Rs.4,75,00,000/- and communicated the same through the letter dated 18.11.2014, which is reproduced as below:- 8. Consequent to the said valuation report, show-cause notice was issued to the appellant alleging misclassification, undervaluation of the 19 objects imported and violation of Policy condition. In response to the said notice, in their reply, the appellant requested cross-examination of the said members of the expert committee, which pursuant to the direction of the High Court was allowed by the adjudicating authority. 9. On the issue of misdeclaration of the classification and des....
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....g the policy conditions viz. "the importer must abide by the rules / laws relating to export of such items of the country from where imports are sought to be made". The learned Commissioner in the impugned order analysing the CPTA of Swiss Confederation held that, it violated the provisions prescribed under the said CPTA; hence in turn, the policy conditions also violated and not complied with; accordingly the antiques are prohibited goods and liable for absolute confiscation. The appellant on the other hand referring to the Article 2, 4 and 5 of the CPTA has submitted that there is no violation of the said Act and the exporter being a person who is not required to register under the said CPTA; therefore, no violation has been committed by the appellant in importing the antiques from the said exporter who is not a dealer of antiques. From the records, we do not find any attempt has been made by the Customs Department to ascertain the fact from the Switzerland authorities as to whether such exports violated provisions of the said CPTA; hence interpreting the provisions of the CPTA by the Commissioner and arriving at a conclusion that there has been a violation of export laws of the ....
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....after accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on 'certain reasons' raise doubts about the truth or accuracy of declared value. 'Certain reasons' would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture or production, non-declaration of parameters such as brand and grade etc. and fraudulent or manipulated documents. Grounds mentioned in (a) to (f) however are not exhaustive of 'certain reasons' to raise doubt about the truth or accuracy of the declared value. Clause (ii) to Explanation states that the declared value sha....
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.... reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "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. 17. The choice of words deployed in Rule 12 of the 2007 Rules are significant and of much consequence. The Legislature, we must agree, has not used the expression "reason to believe" or "satisfaction" or such other po....
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....ider the claim of the appellant about the comparable auction price available of more or less similar goods before discarding the said claim and adopting the opinion of valuation committee, recorded its finding solely on the basis of the same. 15. Rule 9 of the CVR 2007 reads as follows: 9. Residual method.- (1) Subject to the provisions of rule 3, where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India; Provided that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade, when the seller or buyer has no interest in the business of other and price is the sole consideration for the sale or offer for sale. (2) No value shall be determined under the provisions of" this rule on the basis of - (i) the selling price in India of the goods produced in India; (ii) a system which prov....
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....mbassery , today, i.e. on 18.11.2014. The 19 objects imported by M/s.Natesans Antiquarts(Mumbai) Pvt. Ltd., were examined by us in detail. We are convinced that all the imported items are Antiquities (more than 100 years old) and the items are of Indian Origin. We are of the considered opinion that these items are Antiquities that have been smuggled out of India illegally. It is further known that Importer is an Antique dealer having branches In Trivandrum, Bangalore, Mumbai etc., as well as overseas. The item-wise valuation has been done by us keeping in view the fact that the value of the items fluctuate both in time and space. The value of each item, in our considered opinion, based on their age and the period to which they belong to, is given in Indian Rupees as per the list attached to this report. It is however opined that the market value of the items may be much more, depending upon the preferences of the collectors of Antiquities. 18.11.2014 18.11.14 (Dr.ARUNDHATI BANERJI) (Dr.SATHYABHAMA BADREENATH) Regional Director (South) Archaeological Survey of India Bangalore (Dr.R. NAGASWAMY) Director of Archaeology(Retd.) State Department of Archaeology, Tamil Na....