TaxTMI 
TaxTMI 
2025 (8) TMI 1235
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....kers imported against Bill of Entry 6987461 dated 1.6.2012, that was intercepted by the DRI post-commencement of the investigation against the appellant, were imported and cleared following assessment and inspection by the customs authorities, without any objection being raised at the time in respect of the declarations made by the appellant as to description, classification, quantity or value. 2.2. On 08.02.2012, the officers of Directorate of Revenue Intelligence (DRI), Kolkata Zonal Unit, undertook a search of the office and residential premises of the late Director of the appellant, Suresh Agarwal (Ghoriwala). During the course of such search, and in the period thereafter, several statements of the said Director were recorded by the DRI, which were purported to be confessional in nature, inasmuch as the Director allegedly admitted to undervaluing some imports. In addition to obtaining statements of the said Director, the officers of DRI allegedly also recovered two Proforma Invoices from the appellant's residence, purportedly obtained information from overseas customs authorities of Indonesia and China, during the course of the subject investigation. Four months after the st....
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....he Show Cause Notice dated 01.09.2014 with interest thereon under Sections 28 and 28AA/AB of the Act; (iii) Duty differential demand of Rs. 1,66,372 against consignments of blankets particularised in Annexure G of the Show Cause Notice dated 01.09.2014 (with interest thereon under Sections 28 and 28AA/AB of the Act; (iv) Confiscations of the carpets, speakers and blankets (henceforth collectively referred to as the "said goods") under Section 111(m) of the Act subject to redemption against a fine of Rs. 1,00,000/- (v) Imposition of penalty under Section 112 of the Act of Rs. 1,00,000/- and under Section 114A of the Act of Rs. 1,76,87,038 Other demands based on Annexure B and C of the Show Cause Notice dated 01.09.2014 on miscellaneous items including glassware, were dropped and the value declared by the appellant during their importation was accepted by the Commissioner. 2.6. Aggrieved against the confirmation of the demands of duty along with interest and penalties confirmed in the impugned order, the appellant has filed this appeal. 3. The Ld. Senior Counsel appearing on behalf of the appellant submits that the said impugned order is patently e....
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....s no reference to any period during which undervaluation took place, and there was also no reference to any bill of entry, or any specific consignment to which such purported confession of undervaluation pertained. It is also his submission that it was also not clear from the statement if he was referring to goods imported by M/s Glass Style International that were undervalued or those of the appellant, be it blankets or otherwise. 3.3. The appellant further submits that during the course of providing his statement dated 11.02.2012, the Director was also shown 2 pro forma invoices showing sale of carpets from a supplier of Indonesia, which was allegedly recovered from his premises; on seeing them, the Director stated "I do not know whether the sale actually took place or not." He said further, "I am not anywhere related to the said transaction but I might have kept copies of those documents as a part of the original unit price of carpets which might be useful for my export business"; that the Director clarified that "Those documents were sent to me for handing over to some other person like forwarding agent/clearing agent/indenting agent at Kolkata." The appellant thus contends ....
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....erseas [(2023) 11 Centax 101 (SC)], the appellant contends that such a statement cannot be used against the person making the statement. 3.6. In view of the aforesaid submissions, the appellant submits that regardless of whether the Director had belatedly disclosed the fact of duress or coercion in course of the obtainment of the statements, there is absolutely no consignmentspecific admission or confession to valuation; that there is also no period-specific confession to undervaluation and also no undervaluation admitted in respect of carpets or speakers, both forming the bulk of the demand. As regards blankets, it is submitted that there was an overarching, general statement of undervaluation given by the Director, but there is no reference to any consignment or period in relation to which such undervaluation was purported admitted by the Director. As regards the pro forma invoices, the appellant's submission is that the Director himself claimed the same to be unrelated to the imports, and there was no indication that the values specified therein had any relevance to the carpets imported. In the case of the subject speakers imported by the appellant, it is mentioned that the d....
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....been determined; there are no accompanying shipping documents or any bill of entry, even the one alleged in paragraph 19.4 of the said impugned order (i.e. B/E 2833582 dated 23.02.2011), enclosed with the said letter dated June, 2012 and none have been incorporated as part of the relied upon documents. The appellant therefore submits that it is apparent that the letter dated June 2012 in isolation offers absolutely no information regarding the subject imports, and bears no relevance to the present case, and cannot in any manner serve to corroborate the statements of the Director or support any theory or allegation of undervaluation pertaining to carpets. 3.8. The appellant draws attention to the fact that there are innumerable varieties of carpets whose prices widely vary depending on design, commission, size and other factors, even in respect of the same category and quality of carpets. In the facts and circumstances, they contend that there is no basis to allege undervaluation of the subject consignments of carpets. 3.9. As regards information purported obtained from China Customs authorities, it is the appellant's contention that the same contain all but a tabulation with ....
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....missible. Based on such documents, it is their contention that the transaction value of the said goods cannot be enhanced. The appellant places reliance in this regard on the following decisions: (i) Commissioner of Customs Vs. Bussa Overseas Properties Ltd. [2007 (216) ELT 659 (SC)] (ii) Commissioner of Customs Vs. Truwoods Pvt. Ltd. [2016 (331) ELT 15 (SC)] 3.12. With regard to the four computer printout invoices copies relied upon in the impugned order, the appellant submits that none of them satisfy the requirements of Section 138C(2) of the Act for being treated as a document which is admissible in any proceedings as per Section 138C(1) of the Act. Thus, they contend in this regard that the said printouts are inadmissible evidence and no demand can be raised or confirmed against the appellant on the basis thereof. In support of this contention, the appellant relies on the following decisions: (i) Commissioner of Customs Vs. Junaid Kudia [(2024) 16 Centax 504 (SC)]- affirming Juniad Kudia Vs. CC [(2024) 16 Centax 503(T)] (ii) Commissioner of Customs Vs. Jeen Bhavani International, (2023) 6 Centax 14 (SC)- affirming Jeen Bhavani Internation....
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....tatements by the Director regarding their undervaluation, which was not specific to any consignment or bill of entry or any exporting or importing party for that matter, there was no corroborative evidence of any sort put forward by the respondents in this regard; that the appellant by its reply to the Show Cause Notice, submitted a copy of a Bill of Entry No. 7256218 dated 03.11.2014 against which it had during the course of adjudication imported blankets with a declared unit value of USD 2.2 per kg, but this contemporaneous evidence has been rejected by the adjudicating authority on the purported basis that the same is not contemporaneous even though the Show Cause Notice dated 01.09.2014 had only been issued only 2 months prior to the presentation of such Bill of Entry dated 03.11.2014. It is their plea that the said impugned order has proceeded solely on the basis of the statement of the Director dated 11.02.2012 and not produced any evidence of contemporaneous imports with higher value. 3.17. Inasmuch as the imported speakers are concerned, it is reiterated by the appellant that there was no case for undervaluation, but misclassification, and hence, the dispute was purely o....
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....s established, it is submitted that there is no basis for invocation of Sections 14, 28, 28AA/AB or for confiscating goods under Section 111(m) of the Act or for imposing redemption fine and penalty under Sections 125, 112, and 114A of the Act. 3.21. In view of the above submissions, the Ld. Sr. Counsel for the appellant has prayed for setting aside the impugned order and allowing their appeal. 4. The Ld. Authorized Representative (A.R.) of the Revenue reiterated the findings in the impugned order. Regarding rejection of the transaction value, the Ld. A.R. of the Revenue submits that investigation conducted by the officers has established that the appellant undervalued the carpets imported by them; that the undervaluation is supported by the Proforma Invoices showing higher value for the same goods retrieved from the appellant. Accordingly, he supported the demands confirmed in the impugned order. 5. Heard both sides and perused the appeal records. 6. We observe that the appellant has imported multiple consignments of carpets, speakers, and blankets from overseas suppliers in Indonesia and Hong Kong, China. All the subject consignments, except the one consignment of spe....
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....hich goods are traded between India and Indonesia. It is also pertinent to note that the quantity of goods traded during the course of a transaction is also a determining factor of their price/value. In the instant case, we find that no proper comparisons can be drawn with the goods described in the said pro forma invoices and the carpets imported by the appellant. Thus, we are of the view that the value available in the proforma Invoice cannot be relied upon for purposes of rejecting the transaction value declared by the appellant and to re-determine the assessable value of the carpets for the purpose of charging customs duty. 6.2.1. In this regard, we find it relevant to refer to the decision rendered by the Tribunal at Chennai in the case of Oswal Metal Works v. Commissioner of Customs, Chennai-III [2024 (10) TMI 408 - CESTAT, Chennai] wherein it has been observed that a proforma invoice is in the nature of a quotation or offer and hence does not constitute valid basis for enhancement of value of imported goods. The relevant observations of the Tribunal in the aforesaid decision are reproduced below: - "7. We find that it has been held by a Division Bench of th....
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....e appellant and the said proprietary concern, M/s Glass Style International (prop. Vikas Agarwal). There is no authentication of any sort by any customs authority of China, and there is no covering letter of any customs authority indicating that such tabulation forms part of a communication involving the customs authorities in China. Apart from a mere averment on the part of the respondent authorities, there is absolutely no indication that such tabulation represents any real transaction or evidences any communication with or by the customs authorities in China. Thus, we are of the view that that the price available in the said Tabulation Sheet should be disregarded altogether and no relevancy can be accorded to the same in the present case. 6.5. The other evidence relied upon by the investigation to allege undervaluation is the various statements recorded from its Director. We find that the investigation alleges that the Director in his statements accepted the undervaluation of the carpets imported by them. We have perused the various statements recorded from the Director. From the answers given by the Director, we find that he has not given any confessional statement agreeing ....
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....the adjudicating authority under Section 138B of the Act, which has not been done in this case. In this connection, we place our reliance upon the decision in the case of Hi Tech Abrasives Ltd. Vs. Commissioner of C.Ex & Cus [2018 (362) ELT 961 (Chhattisgarh), wherein it has been observed as under:- "9. Findings on Substantial Questions of Law (i) & (ii) : We shall decide the first two substantial questions of law as they are overlapping. The submission of counsel for the appellant has been that firstly, the Director's statement was not admissible and secondly it cannot be treated as admission because in reply to Show Cause Notice, the said statement was stated to have been obtained under duress. We shall first examine the legal position with regard to the admissibility of the statement of Director which admittedly was taken during search operations by the investigation officers. 9.1 At the outset, it needs to be clarified that during the course of argument, Learned Counsel for the parties agreed that second substantial question of law is with regard to legality of procedure adopted by the adjudicating authority and not the Tribunal as such because the Tr....
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.... Court. (her, the adjudicating authority). 9.2 At this juncture, we need to notice the provision contained in Section 9D which provides that sub-section (1) shall, as far as may be, applied in relation to the proceedings under the Act, other than the proceeding before the court, as they apply in relation to proceeding before the Court. This provision when read in juxtaposition, the small clauses (a) and (b) under sub-section (1), requirement of law of recording of examination as witness would be in relation to the proceedings before the adjudicating authority. 9.3 A conjoint reading of the provisions therefore reveals that a statement made and signed by a person before the Investigation Officer during the course of any inquiry or proceedings under the Act shall be relevant for the purposes of proving the truth of the facts which it contains in case other than those covered in clause (a), only when the person who made the statement is examined as witness in the case before the court (in the present case, Adjudicating Authority) and the court (Adjudicating Authority) forms an opinion that having regard to the circumstances of the case, the statement should be admitt....
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....w, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination before the adjudicating authority in the proceedings instituted upon show cause notice was not recorded nor formation of an opinion that it requires to be admitted in the interest of justice. In taking this view, we find support from the decision in the case of Ambica International v. UOI rendered by the High Court of Punjab and Haryana. Reliance has been placed by the Counsel for the Revenue on the decision in the matter of Commissioner of Central Excise v. Kalvert Foods India Private Limited (Laws (SC) 2011 838) = 2011 (270) E.L.T. 643 (S.C.). That decision turned on its own facts. In para 19 of the judgment, it was concluded as below : "19. We are of the considered opinion that it is established from the record that the aforesaid statemen....
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....ere is no case of contemporaneous bill of entry or contemporaneous import available on record, the transaction value cannot be rejected on the basis of materials which are not admissible into evidence. For rejection of transaction value, contemporaneous import of identical and/or similar import is essential. This view has been crystallized by the Hon'ble Supreme Court in the case of Commissioner of Customs, Calcutta Vs- South India Television Pvt. Ltd. reported in 214 ELT page 3 SC. The relevant part of the said decision is reproduced below: "7. Applying the above tests to the facts of the present case, we find that there is no evidence from the side of the Department showing contemporaneous imports at higher price. On the contrary, the respondent importer has relied upon contemporaneous imports from the same supplier, namely, M/s. Pearl Industrial Company, Hong Kong, which indicates comparable prices of like goods during the same period of importation. This evidence has not been rebutted by the Department. Further, in the present case, the Department has relied upon export declaration made by the foreign supplier in Hong Kong. In this connection, we find that letters were addr....
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.... some evidence of identical imports at lower value, which has been admitted in paragraph 14.3 and paragraph 14.4 of the notice. The relevant paragraph 14.3 of the Show Cause Notice is set out hereinbelow; " ...The import value data base of the contemporaneous period, therefore contains in abundance data of import of comparable goods at such misdeclared low value, which themselves have either been already subjected to or may be subjected to the scanner under the ongoing process of investigation relating to import made by other importers" 6.7. Thus, we observe that the ld. adjudicating authority has not taken into account the evidences submitted by the appellant on contemporaneous imports with lower value. Also, he has not furnished the details of the Bills of Entry where higher value has been adopted. 6.8. We observe that the ld. adjudicating authority has also not followed the valuation rules in a systemic mannerto redetermine the Assessable value, by stating that it will be in conflict with the intelligence about the rampant under-invoicing as alleged in paragraph 14.4 of the notice. In the impugned order, it has been admitted that none of the Rules from Valuatio....
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....bunal in the appellant's own cases. In M/s. Jupiter International Limited vs Commissioner of Customs (Port), Kolkata [2025 (2) TMI 430 - CESTAT Kolkata], under similar facts and circumstances, it has been observed as under: - "The appellant, Jupiter International Ltd imported a consignment of Two models of Multimedia Speakers having additional function such as Blue tooth/SD/MMC/USB/FM/AUX with remote wireless Microphone and some electronic spare parts of speakers. They have filed a Bill of Entry No. 7866965 dated 01.09.2018 self assessing the Multimedia Speakers under heading no.85182200. They imported another consignment of various models of Multimedia Speakers comprising of three categories of speakers i.e. (i) Multimedia Speakers with additional function of Bluetooth and FM radio, (ii) Multimedia Speakers with additional function of USB and (ii) samples of Multimedia Speakers without any additional function..... ... 8. We find that this issue was before the Banglore Tribunal in the case of Logic India Trading Co-v-C.C-2016(337) ELT 65(TriBang). The Tribunal has held as under: ... 9. We find that the same issue was dealt by this Bench ....
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....long with Home Theatre Systems as multiple loudspeakers mounted in the same enclosure. 7. In view of said matter having been examined ad nauseam as referred supra, we find no merit in the order of the lower authority which is therefore set aside. 8. The appeal filed by the appellant is hereby allowed with consequential relief, if any, as per law." 11.2. Thus, we find that the issue is no longer res integra as the same has already been dealt with by this Tribunal in the above cited cases. Therefore, following the above judicial precedents, we hold that the appellant has rightly classified the multimedia speakers with added ancillary features of USB/SD card/ MMC Playback and/ or FM radio under CTH 8518. Accordingly, the demands confirmed against the appellant by reclassifying the said goods under CTH 8527/CTH 8519 are not sustainable and therefore, we set aside the same." 7.1. By following the ratio of the decision cited above, we hold that the appellant has rightly classified the Multi Media Speakers imported by them under Chapter Head 8518, where MRP based price is not applicable. Thus, we hold that the demand confirmed in the impugned order on account....
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....esaid, and hence there can be no basis to the allegation of fraud or wilful misstatement on their part with intent to evade payment of duty. Under such circumstances, we are of the considered view that the extended period of limitation cannot be invoked in terms of Section 28 of the Act, as the conditions precedent for such invocation have not been satisfied in the present case. 10.1.1. The ingredients for imposing penalties under Section 112 or Section 114A of the Customs Act being identical to those required for invoking the extended period, and the same not being satisfied in the instant case, in view of our above discussions, we hold that no penalty is imposable on the appellant under Section 112 or Section 114A ibid. Accordingly, the same are set aside. 11. Customs Appeal No. 77103 of 2017 has been filed by Shri Suresh Agarwal against the penalty of Rs.10,00,000/- (Rupees Ten Lakh only) imposed on him under Section 114AA of the Customs Act, 1962. In this regard, it is seen from the records that Shri Suresh Agarwal has expired, as evidenced by the Death Certificate issued on 05.03.2019 which has been produced by the Ld. Counsel for the appellant. As Shri Suresh Agarwal ha....