TaxTMI 
TaxTMI 
2025 (9) TMI 1098
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....'; the date of entry of the vessels shown as 20.01.2014 and 24.01.2014 respectively. After unloading, the vessel "SCOTER" left the NMP, however, in case of the vessel 'TURK GAZ', the Department, on the basis of intelligence that the LPG had been loaded at Iran Port and declared to be of UAE origin by manipulating the documents of import, recorded statement of the Master of the vessel and after examination of the log book etc. found that the LPG cargo was loaded at Assaluyeh Port, Iran; however it was shown as Jebel Ali, Dubai. Consequently, the premises of the appellant was visited by the officers and the quantity of LPG lying in the shore tanks were seized and later released provisionally on execution of Bond and Bank Guarantee. After completion of investigation, a show-cause notice was issued to the appellant on 21.02.2014 and addendum dated 31.10.2014 alleging misdeclaration of the Country of Origin and under-valuation of the imported goods; proposed to enhance the declared assessable value from Rs.55,65,60,764/- to Rs.64,98,12,188/- in case of both the vessels and differential duty of Rs.1,28,70,561/- was sought to be recovered from the appellant; seized the goods proposed to b....
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....e said goods do not correspond in respect of value and other material particulars i.e., country of origin with the respective Bills of Entry filed; (v) I hold that the subject imported goods, referred above at Sl. No.(i) and covered under two impugned Bills of Entry with re-determined assessable value of Rs. 59,08,50,204/- (Rupees Fifty Nine Crore Eight Lakh(s) Fifty Thousand Two Hundred and Four only) read with RBI Circular No.31 (RB1/2010-11/235) dated 27.12.2010 read with the Foreign Exchange Management (Manner of Receipt and Payment) Regulations 2000; (vi) I given an option to redeem 1672.313 MTs of LPG valued at 11,75,77,816/-, which was seized and provisionally released on execution of Bond and furnishing of bank guarantee, on payment of fine of Rs. 50,00,000/- (Rs. Fifty Lakhs only) in lieu of confiscation in terins of the provisions of Section 125 of the Customs Act, 1962; (vii) I impose a penalty of Rs. 30,00,000/- (Rupees Thirty Lakhs only) under Section 112(a) of the Customs Act, 1962 on M/s. Total Oil India Pvt Ltd., for their acts of omission and commission which led to short levy/short payment of duty amounting to Rs. 47,32,629/- (Rupees For....
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....respect of the said imports made in his vessel. (xv) I impose a penalty of Rs. Rs. 10,00,000/-(Rupees Ten Lakhs only) on Shri Sasi Chemenkottil, Vice-President (Operations and Logistics), M/s. Total Oil India Pvt. Ltd., LPG Division, #138, Raheja Paramount, Residency Road, Bangalore-560025 under Section 112(a) for his acts of omission and commission by which the subject imported goods referred in Annexure to the SCN were rendered liable to confiscation under Section 111(d) and Section 111(m) of the Customs Act, 1962. (xvi) I impose a penalty of Rs. 2,00,000/- (Rupees Two Lakhs only) on Shri Sasi Chemenkottil, Vice-President (Operations and Logistics), M/s. Total Oil India Pvt. Ltd., LPG Division, #138, Raheja Paramount, Residency Road, Bangalore-560025 under Section 114AA of the Customs Act, 1962 for use of false and incorrect material in respect of the said imports. (xvii) I order for completion of the remaining formalities pertaining to the finalization of the provisional assessments in respect of the impugned bills of entry. Hence the present appeals are filed by the above named Appellants, whereas the Master of Vessels have not filed Appeals agains....
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....ated on the ground that the goods are of Iranian origin, the Appellant has not remitted any amount towards import of the goods. Reliance is placed on the following judgments:- i. Jupiter Dyechem v. CC, Import [2023 (5) TMI 670 - CESTAT MUMBAI] ii. Hazel Mercantile Ltd. v. CC, Cochin, 2024 (387) E.L.T. 614 (Tri. - Bang.) iii. M/s. Sai International vs. Commissioner of Customs (Prev.), New Delhi (2018 (7) TMI 34 - CESTAT NEW DELHI) iv. Pushpanjali Silk Pvt. Ltd. v. CC - 2009 (238) E.L.T. 135 (Tri. - Chennai) v. Finolex Industries Ltd. vs. CCE, Pune, 2004 (174) E.L.T. 341 (Tri.-Del.) c. The Appellant has neither mis-declared the country of origin nor manipulated the import documents, as they have not acted with intent to evade duty payment. The Appellant was of the bona fide belief that the imported goods are of UAE origin on the basis of the documents provided by the Supplier. The Appellant has throughout the term of the agreement acted in good faith and was under a genuine and bona fide belief that the terms of the agreement is adhered to by the Supplier in letter and spirit. Reliance in this regard is placed on the decision in t....
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....561 (S.C.) ii. Jet Airways (India) Ltd. v. Commissioner of Customs, 2021 (377) E.L.T. 83 (Tri. - LB) iii. Southern Petro Chemical Indus. Ltd. v. CC, Ahmedabad - 2008 (224) E.L.T. 537 (Tri. - LB). Affirmed by the Supreme Court in 2010 (254) E.L.T. A74 (S.C.) iv. United Telecoms Ltd. v. CC, Bangalore - 2009 (241) E.L.T. 380 (Tri. - Bang.) v. Sical Logistics Ltd. v. CCE, 2019 (369) E.L.T. 1104 (Tri. - Kolkata) vi. National Aviation Company of India v. CCE, 2018 (8) TMI 1300 - CESTAT BANGALORE. h. The term "fraudulent or manipulated documents" referred to in sub-clause (f) of clause (iii) to paragraph 1 of the Explanation to Rule 12 of the Customs Valuation Rules has not been defined in the Customs Act or the Customs Valuation Rules. Reference is made to the decision of Commr. of Customs (Preventive) vs. Aafloat Textiles (I) Pvt. Ltd. and Ors., 2009 (235) E.L.T. 587 S.C., where the Hon'ble Supreme Court expounded on the notion of "fraud" and held that there needs to be an intention to deceive which is absent in the present case. i. In terms of Clause 8 of the Agreement, the delivery is to be made by the Supplier's vessel on....
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.... or payable shall be made under this rule on the basis of objective and quantifiable data. In this regard reliance is placed on Shri T.N. Malhotra vs Pr. Commissioner of Customs, New Delhi [2024-VIL-677-CESTAT-DEL-CU]. Thus, the determination of premium as USD 102.89 PMT per the impugned Order is legally untenable as it is not based on any objective data and is liable to be set aside. m. The impugned Order holds that since it is established that the Appellant mis-declared the value and mis-declared the country of origin/ port of loading, the imported goods are liable to confiscation under Section 111(m) of the Customs Act, 1962. The Appellant has not mis-declared the country of origin of the imported goods. The Appellant was of the bona fide belief that goods are of non-Iranian origin as would be evident from various email correspondences sent by the Appellant insisting that the goods be of non-Iranian origin and the documents provided by the Supplier in support of the non-Iranian origin. They relied upon the following decisions:- i. Allseas Marine Contractors S.A. v. CC - 2011 (272) E.L.T. 619 (Tri. - Bang.) ii. Shahnaz Ayurveda's vs. Commissioner of Cen....
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....t has to be demonstrated. No interest is recoverable on the amount of differential duty as the demand of duty is wholly unsustainable as submitted above supra. Hence, when the duty does not survive, the demand of interest being an accessory will also not survive. In this regard, reliance is placed on Pratibha Processors v. UOI [1996 (88) E.L.T 12 (SC)]. 4. Per contra, learned AR for the Revenue has reiterated the findings of the learned Commissioner. 5. Heard both sides and perused the records. 6. The issues involved in the present case for determination are whether: (i) the declared transaction value is liable to be rejected; (ii) the premium amount which comprised of elements of freight and insurance etc. have been correctly determined as per Rule 10(2) of the Customs Valuation Rules, 2007; and (iii) direction for confiscation of the goods seized and imposition of penalties on the appellant company and the Vice President Mr. Sasi Chemenkottil under various provisions of the Customs Act, 1962 are justified. 7. It is brought to the notice of the Bench that the Master of vessels on whom penalties have been imposed under various provisions of the Customs Act and direction....
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....roper 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 reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation. - (1) For the removal of doubts, it is hereby declared that :- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers. (iii) 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 - (a) the significantly higher value at which identical or similar goods imported....
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....d goods. Sub-rule (2) states that the declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after an enquiry in consultation with the importers. 13. Sub-rule (3) to Rule 3 deals with cases when the buyer and seller are related. We would not dilate on the said sub-rule for this is not required for the purpose of the present decision. As per sub-rule (4), where the value cannot be determined under sub-rule (1) to Rule 3, the transaction is to be valued by step wise applying Rules 4 to 9. Rule 4 deals with transaction value based on identical goods. Rule 5 deals with transaction value based on similar goods. Rule 6 deals with the determination of value where the transactional value cannot be determined under Rules 3, 4 and 5. Rules 7 and 8 deal with deductive value and computed value respectively. Rule 9 prescribes the residual method for computing the transaction value. What is important to note is that Rules 4 to 9 are subject to the provisions of Rule 3 thereby giving primacy to Rule 3 which in turn gives primacy to Rule 12 of the 2007 Rules. 14. Rule 12, which as noticed above enjoys primacy and ....
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....clared in relation to the imported goods. Further, the proper officer shall provide a reasonable opportunity of being heard to the importer before he makes the valuation in the form of final decision under sub-rule (1). 12. As far as the cost price of LPG is concerned, there has not been much variation in all the imports made during the month, hence the Commissioner has not doubted the said cost price; however, he has rejected the premium USD 38 which according to the appellant mostly includes freight, insurance and other charges for importing the LPG from the overseas port to NMP. In the show-cause notice, it is alleged that since the Country of Origin has been mis-declared, and the actual cost of transportation cannot be determined, it was proposed to add 20% of the FOB value as per Rule 10(2) of the Customs Valuation Rules, 2007. The relevant Rule 10(2) reads as follows:- RULE 10. Cost and services. - (2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include- (a) the cost....
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....mports from other importers during the month, where the port of loading was Oman and computed the premium on pro-rata basis on the difference in distance between Assaluyeh(i.e.454 nautical miles), port to Omanian Port as 23.89 PMT and arrived at USD 102 PMT as the premium amount. The learned advocate has further submitted that the said method of computation of freight and insurance cannot be sustained as it is not supported by any verifiable data and based on assumption and presumption and not in accordance with Rule 10(2) of CVR,2007. He has submitted that on the basis of Clarksons Shipping Weekly Intelligence Report on LPG prices for the relevant period, the appellant had calculated the freight amount between Assaluyeh, Iran and NMP as USD 47.89 PMT and submitted the same in their reply and during the course of hearing before the Ld. Commissioner. It is their contention the same was ignored by the Commissioner and also the circular issued by the Board No. 04/2006-Cus dated 12.01.2006 on the subject. 14. We find that the Commissioner has redetermined the premium by adding USD 23.89 PMT to USD 79 PMT considering that the difference in the distance between Assaluyeh, Iran and Oma....