TaxTMI 
TaxTMI 
2025 (11) TMI 136
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....he assessable value for the goods entered in the hills of entry detailed in Table 4 is re determined to Rs. 14,19,67,583/under Rule 4 & 9 of the Customs Valuation (Determination of value of imported goods) Rules, 2007. (iii) Bond of Rs.31,24,498/-(Rupees Thirty-One Lakhs Twenty Four Thousand Four Hundred and Ninety Eight Only) executed for provisional release of goods imported vide Bill of Eatry No. 2949435 dated 23.04.2019 which were seized vide Selzure Memo dated 28.05.2019 is enforced and the Bank Guarantee No. 003GT01191620004 dt.11.06.2019 for differential duty of Rs 1,94,017/- (Rupees One Lakh Ninety Four Thousands and Seventeen only) and Bank Guarantee No. 003GT01191620005 dt. 11.06.2019 of Rs. 1,00,000/- (Rupees One Lakh only) for RF/PP deposited at the time of provisional release of goods, is ordered to be appropriated against the duty and penalty recoverable from them. (iv) Goods having revised assessable value of Rs. 14,19,67,583/-as detailed in Table-4, (including seized goods valued at Rs. 31,24,498/-) is confiscated/held liable to confiscation under Section 111 (m) of the Customs Act, 1962. However, I give an option to redeem the seized goods valued ....
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.... of the Act and imposition of penalties under section 114A and 114AA are not correct; (xii) The appeal may be allowed and the impugned order may be set aside with consequential relief to the appellant. Submissions of the Revenue 3. Shri Girijesh Kumar, learned authorised representative for the Revenue vehemently supported the impugned order and made the following submissions: (i) The rejection of declared transaction value under Valuation Rule 12 was correct and proper because it was found that the values declared by the appellant were much lower than the values declared by Radiant Corporation for imports from the same overseas supplier. (ii) Since the transaction value was rejected undervaluation Rule 12, it had to be re-determined. In respect of the live Bill of Entry, the value was re-determined as per Valuation Rule 4 (being the transaction value of identical goods). In respect of past Bills of Entry, since Valuation Rules 4,5,6 & 8 were found to be inapplicable, valuation was done under Rule 9. (iii) Since the appellant had mis-declared the values, the goods were correctly confiscated under section 111(m). (iv) Since the duty ....
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....lue of such goods, as determined in accordance with the rules made in this behalf. Moreover, transaction value of imported goods shall include any amount that the buyer is liable to pay for costs and services, including commissions and brokerages, assists, engineering, design work, royalties and license fees, costs of transportation to the place of importation, insurance and handling charges. Further, where there is no sale or the transaction value of the imported goods or export goods is not determinable, the value of such goods shall be determined in accordance with the rules made in this behalf. This change will come into effect from a date to be notified after enactment of Finance Act, 2007." 8. The new section 14 introduced from 2007 is relevant to the case which reads as follows: "Section 14. Valuation of goods. - 1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall 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 importa....
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....eign currency" and ''Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)." 9. The non-obstante clause in sub-section (2) of section 14 gives the Board the power to fix tariff values for any class of goods and if they are fixed, duty shall be determined on the tariff value only regardless of the actual transaction value. This subsection is not relevant to this appeal because no tariff values were fixed for the goods in question. In all other cases, the value to be reckoned for calculating the Customs duty shall be the transaction value, i.e., the price paid or payable subject to five conditions: a) Buyer and seller are not related. b) Price is for delivery at the time and place of importation, i.e., all costs up to the point of import are to be included. For instance, if the sale is on Free on Board basis, the costs of transportation to the place of import, transit insurance, etc. will have to be added. c) Price is the sole consideration for sale. d) Some amounts indicated in the first proviso to subsection 1 of section 14 mu....
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....s, unless the proper officer rejects the transaction value under Rule 12, valuation has to be based on transaction value only as per Rule 3 with some additions, if necessary, as per Rule 10. 13. Rule 3 further provides that if the valuation cannot be done under that Rule, i.e., as per the transaction value with additions as per Rule 10, then it must be done sequentially under Rules 4 to 9. In other words, if the transaction value is rejected under Rule 12, valuation must be done sequentially under Rules 4 to 9. 14. We now proceed to examine Rules 4 to 9. Rule 4 provides for the valuation on the basis of transaction value of identical goods. Rule 5 provides for the valuation on the basis of the transcation value of similar goods. Rule 6 states if Rules 4 and 5 cannot determine the value, then it must be done as per Rule 7 and thereafter Rule 8 but this sequence can be reversed at the option of the importer. In other words, if the importer so chooses, Rule 8 can be applied directly instead of Rule 7. Rule 7 provides for a deductive method of valuation on the basis of prices of similar or identical goods sold in India and after making some deductions from such prices. Rule 8 pro....
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....icer reject the transaction value. Rule 12 reads as follows: "12. Rejection of declared value. - 1) 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 sub-rule (1) of rule 3. 2) At the request of an importer, the proper 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 a 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....
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....the appellant had filed Bill of Entry No. 2949435 dated 23.4.2019 in which the values declared were lower than the values declared by another importer- M/s Radiant Sales Corporation in Bill of Entry No. 2982408 dated 25.4.2019 for the same goods imported from the same supplier. In respect of one of the items imported viz., UC209, the appellant declared unit price as Rs 119.11 whereas Radiant Sales Corporation declared unit price as Rs. 145.08 (Table C of the SCN). Thus, the value declared by the appellant was 17% less than the value declared by Radiant Sales Corporation. In 38 of the 42 models of the goods imported under this Bill of Entry, the values declared by the appellant were found lower and in 4 models (US 214, UC 215, UC 215-48 and UCT 209), the values were the same [RUD 7 to the SCN]. 19. The differences had given the officer reason to doubt the declared value under Rule 12 and accordingly he issued summons to Shri Harinder Pal Singh, proprietor of the importer firm who gave his statement on 23.5.2019 in which he said that he had declared the prices as per the invoice dated 25.3.2019. He also said that he had a Contract with the supplier effective from 1.1.2018 to 31.12....
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....ial transaction were assessed." 25. Having rejected the transaction value, the Commissioner determined the value under Valuation Rule 4 being transaction values of identical goods. This re-determination also needs to be upheld. 26. As far as the remaining 44 Bills of Entry are concerned, no separate reasons to doubt the truth or accuracy of the transaction values in those Bills of Entry have been recorded in the impugned order. Neither the SCN nor the impugned order records that there were any imports of identical or even similar goods at or about that time. It is for that reason, the value was determined under Valuation Rule 9. Thus, the only reason to doubt the transaction values in the 44 Bills of Entry is that the values declared in Bill of Entry No. 2949435 dated 23.4.2019 was doubted. In our considered view, this cannot be a ground to doubt the transaction values in those Bills of Entry especially when the impugned order as well as SCN record that there were no imports of identical or similar goods. Thus, the rejection of the transaction values in the 44 Bills of Entry cannot be sustained. Consequently, the re-determination of the values under Rule 9 and demand of diffe....
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.... 111(m) of the Act cannot be sustained. Penalties under section 114A and 114AA 31. In the impugned order the Commissioner confirmed demand of duty in respect of the past Bills of Entry under section 28(4) of the Act and imposed an equal amount as penalty under section 114A. Since we found that the demand in respect of the past Bills of Entry cannot be sustained, the penalty imposed under section 114A also needs to be set aside. 32. The Commissioner imposed a penalty of Rs. 50,00,000/- on the appellant under section 114AA of the Act. This section reads as follows: "Section 114AA. Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times." 33. The mere fact that another importer (Radiant Sales Corporation) had imported identical goods from the same overseas exporter at different prices does not prove that the appellant had mis-declared anything in the Bill of Entry,....