AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 734
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....nt placed orders to Phillips, Hong Kong and Taiwan, which were routed through M/s Asia Lucky Industrial Ltd., Hong Kong, M/s Great Himalyan Pte Ltd., Singapore and M/s Hopeen Trading Pte Ltd., Singapore. DRI received intelligence that the appellant was undervaluing the electronic components by routing the goods through M/s Great Himalyan Pte Ltd., Singapore and M/s Hopeen Trading Pte Ltd, Singapore. The residence and office premises of the appellant were searched; statements from various persons including the representatives from the Phillips India Ltd. were recorded. During investigations, the export declarations from Hong Kong/Taiwan were obtained through the Consul (Eco), Consulate General of India, Hong Kong after causing necessary enquiries with the Hong Kong Customs & Excise Department which indicated under valuation. During investigation, the authorities received certain invoices submitted by the representative of Phillips India vide which goods had been supplied by Phillips Ltd to the Singapore supplier, viz. Hopeen Trading Pte Ltd., from whom the Appellant had imported electronic components. On completion of the investigations, Show Cause notice dated 11.2.2000 was issued ....
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....ation by the proper officer at the time of clearance had not indicated it to be of Phillips brand. He contended that the proper officer would have certainly taken note of the brand name while assessing the goods and their value. Learned counsel also submitted that the article number are common amongst all manufacturers of similar products and the numbers were not exclusive to Phillips. In support of the said contention, learned counsel stated that the Appellant had submitted several catalogues of Chinese suppliers who manufacture these goods with the same article number. Therefore, mere reference to the article number was not sufficient to prove that the same goods had been imported by the Appellant. In order to prove that the goods imported by the appellant were unbranded and not of the Phillips make, learned counsel submitted that the appellant had requested for the examination report. However, the department showed its inability to provide the examination report stating that the same had been destroyed. Learned counsel submitted that in any case, the price at which the goods were supplied by M/s. Phillips to their supplier was not the transaction value for the purpose of assessm....
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....tc. Learned authorized representative also submitted that the appellant by refuting the allegations in the impugned Show Cause Notice had tried to derive strength from Section 14 of the Customs Act, stating that transaction value should be the sole criteria for deciding the assessable value based on which the authorities can demand Customs duty, however, he contended that once the related party instances between the supplier and the appellant has not been disclosed, Section 14 of the Act cannot be relied and the declared value deserved to be rejected. Thus it became absolutely clear that the transaction value, as declared, could not be treated as the correct transaction value and the same was liable to be rejected under Rule 10A of the Customs Valuation Rules. Learned authorized representative submitted that appellant, by taking multiplicity of stands to refute these allegations, had destroyed his bonafides, as held by the High Court of Delhi in Indru Ramchandaran case which has been upheld by the Hon'ble Supreme Court. 4.1 Learned authorized representative also submitted that the documents obtained from overseas inquiry became authentic and the re-determination of value based o....
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....d had been deliberately undervalued in order to evade customs duty. 7. We find that the adjudicating authority has confirmed the demand holding as follows: "34. On the basis of the documents enclosed with the reply dated 03.05.2010, the Noticee through their counsel, it is evident that Invoice No. HT 1011/98 dated 22.04.1998 and Invoice HT 1019/98 dated 12.05.1998 issued to M/s R.K. Sales Pvt Ltd, Delhi by M/s Hopkeen(sic) Trading Pte Ltd., Singapore were issued against the invoices issued by Phillips Taiwan, Phillips, HongKong as tabulated hereunder.................. xxx xxx xxx xxx xxx xxx Thus from the above correlation an amount of Rs.9,63,586/- of duties of customs is liable to be confirmed and appropriated under proviso clause of Section 28(1) of the Customs Act, 1962 and an amount of Rs.49,460/- of interest is liable to be demanded and appropriated under Section 28AB of the Act ibid." 7.1 From the above order, it is evident that the said prices would apply if it is established that the electronic components imported by the appellant were of Phillips brand. The learned Counsel for the appellant has submitted before us that the examina....
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.... sold to M/s Hopeen Trading Pte Ltd., Singapore by M/s Phillips, the examination report is crucial, as the same is not available, we would have to extend the benefit of doubt to the appellant. 10. In the above context, we note that the Supreme Court's decision in Samtel Colour Limited v. Commissioner of Customs [(2008) 10 SCC 204] examined the use of intelligence reports and investigation findings as evidence of undervaluation, holding that such materials can constitute valid evidence provided they meet certain criteria. Intelligence reports must be specific rather than vague, based on reliable sources, and corroborated by other evidence. The Court rejected the use of anonymous or unverified intelligence as sole basis for rejecting declared values, emphasizing that importers must have a fair opportunity to challenge the evidence against them. In the instant case, the Department has not been able to establish conclusively that the two invoices issued by M/s Phillips to M/s Hopeen Trading, Singapore represents the actual value of the goods imported was of Phillips brand, leading to the conclusion that the appellant had undervalued the goods to the Customs authorities at the time o....
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....alue should be accepted. The Hon'ble Supreme Court in their judgment in Commissioner of Customs (Imports), Mumbai vs. M/s. Ganpati Overseas [Civil Appeal Nos. 4735-4736 of 2009 dated 6.10.2023] observed the following: "Reverting to Section 14(1) of the Customs Act, this court held that it is for the department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. ... when the transaction value under Rule 4 is rejected, the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Customs Valuation Rules." 12. Similar views have been held by the Supreme Court in Eicher Tractors vs Commissioner of Customs, Mumbai [2000(122) ELT 321(SC)] and Sounds N. Images vs Collector of Customs [2000(122) ELT 321(SC)]. In the instant case, the allegation is that the imported electronic components were of Phillips brand and therefore, the price at which the same was sold to their supplier should be the price for customs assessment when imported into India. From the perusal of the relevant Section 14 and Customs Valuation Rules, we note that the Department, b....