TaxTMI 
TaxTMI 
2026 (2) TMI 345
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....s summarised in the table given below are before this Tribunal assailing such order passed by the Commissioner in confirming rejection of the assessable value, imposing ADD with penalties, redemption fines etc. Amount in Rs. Sr. No. Name of the Entity ADD confirmed Redemption Fine [Goods not available for confiscation] Penalty u/s 114A of Customs Act, 1962 Penalty u/s 112(a)/112( b) of Customs Act, 1962 Penalty u/s 114AA Remarks 1 Surbhit Impex Pvt. Ltd. [SIPL] 3,15,75,013/- 74,00,000/- 3,15,75,013/- NIL 5,00,00,000 Value decreased from 10,31,67,596/- to 7,42,53,179/- 2 B.M. Jain and Sons Pvt. Ltd. (BMJSPL) (Merged with SIPL vide NCLT Order dated 06.05.2022) 3,40,72,156/- 92,00,000/- 3,40,72,156/- NIL 7,00,00,000/- Value decreased from 12,30,74,823/- to 9,20,83,435/- 3 Mahendra Bhanmal Jain (Director of SIPL and BMJSPL) NIL NIL NIL 65,00,000/- 7,00,00,000/- Allegation for being instrumental in overvaluation of goods 4 Vatsal Mahendra Jain (Director of SIPL and BMJSPL) NIL NIL NIL 65,00,000/- 4,00,00,000/- Allegations for signing an....
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....ng Authority had rejected the transaction value of goods under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 merely on suspicion on the basis of data published in ICIS that price of melamine had got a downward division since 2010 to USD931-1306 PMT (CIF) and applied ADD on the differential amount with price noted in Notification No. 10/2010-Cus. without offering any reason as to why such products' value would continue to be kept at the 2010 pricing specified in the said notification for imposition of ADD. He further argued on the basis of Rule 12, Explanation (1)(iii) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 to justify that the proper officer shall have powers to raise doubts on the truth or accuracy of the declared value if, among other reasons, (a) significantly higher value at which identical or similar goods are imported at or about the same time in comparable quantities or (b) the sale involves an abnormal discount or abnormal reduction or special discount but in the instant case when transaction value is at a higher price than what was determined by the proper officer and out of....
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....gh banking platform, Valuation Rules can't be invoked for re-determination of value at a lower price than the transaction value which is the core principle for Customs Valuation under Section 14 of the Customs Act, 1962. He concluded his argument in saying that Article vii of GATT, upon which Customs Valuation in India is based, specifically prohibits such valuation method in Anti-Dumping matters for which the order passed by the Commissioner is unsustainable in both law and facts. 5. Learned Authorised Representative Mr. Mahesh Yashwant Patil on behalf of the Respondent has objected to such submissions made on behalf of the Appellant and argued in favour of the reasoning and rationality of the order passed by the Commissioner. To him, investigation revealed a well-planed modus operandi involving artificial inflation of CIF value, use of a dummy intermediary (M/s. Sure Horizon Inc. Ltd. Hong Kong), fabrication of invoices and packing list, suppression of actual negotiated price and overvaluation was done as a conscious act to evade ADD (Anti-Dumping Duty). Though not argued, it is placed in his written note that rubber stamp of Authorised Signatory of the allegedly Dummy Exporte....
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....s claimed by the Department that such documents were in editable format, the content being denied by the Appellant, blame cannot be thrown alone on the Appellant as to if any editing is done in respect of those documents since its origin and source were not examined. His further submission on this issue is that out of 5 overseas suppliers of those goods, Respondent chooses to investigate against only one supplier despite the fact that two other suppliers were from China and investigation has not brought on record any evidence which could have casted a suspicion on the dealing with those suppliers to prove that any part of the purchased value was remitted back to them in any form, nor any proof of any amount being remitted back by the Importers to the High Sea Sellers and concerning certain inconsistencies in the statements, explanations were dully offered during investigation as well as in the reply to the show-cause notice and therefore, alleged presence of certain inconsistencies in the statement, that may raise a suspicion can't take the place of proof which is required to be established in a quasi-judicial proceeding. He concluded his submission in saying that all statements re....
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....y allegation of mis-declaration. Further, through the investigation, Respondent-Department had tried to establish that proof of negotiated price was available in the form of electronic evidence and there was a request made for 'sharing of commission' from the overseas allegedly dummy Exporter company namely M/s. Sure Horizon of Hongkong, whose company's seal in the form of a rubber stamp was allegedly seized during the investigation, coupled with statement of witness, namely Mahendra Bhanmal Jain (also Appellant in this case) who was associated with both the Importer Companies as its Director, to the effect that there was difference in declared value and prevalent international market price and landing cost being higher than the sale price would clearly show the modus operandi of the Appellants in enhancing the value of melamine for the purpose of evading ADD. All these allegations were time and again refuted by the Importer-Appellants, which were even noted in the order passed by the Commissioner from para 22 onwards, as written submission of noticee supported by reply to the show-cause notice, the sum and substance of which would go to reveal that: (a) Customs Valuation ....
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.... a Rubber Stamp was needed to sign the documents. In such a scenario, the said representative of overseas suppliers was introduced to one Rustam Copy Center in Mumbai. The said Rustam Copy Center, on the instructions of representative of overseas suppliers, prepared a Rubber Stamp for him and his use. The representative of foreign Company forgot to take the said Rubber Stamp with him. An intimation was also given to the said representative where upon he regretted and assured to get the same collected as soon as possible. The DRI has failed to bring on record even a single documents showing that we have utilized the said rubber stamp for manipulating any documents. No details of any such documents which is manipulated and on which the said stamp is used is brought on record and this itself proves that the said rubber stamp was not used by us and the same was found lying in our office and we were not even aware of the same and thus no adverse inference can be drawn in this regard. VI. The last reason for making such an allegation is that one of the directors had written a letter to M/s. Farmasino Pharmaceuticals (Jiangsu Co.) Ltd. urging them to pay differential value to the....
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....e of evading ADD except Section 108 statements, which are not verified by tendering the same before the Adjudicating Authority with right of cross examination available to the Appellant-Importers that was being retracted and communicated to the Higher Authorities and even to the Judicial Authorities before whom prosecution was launched at the earliest possible occasion, no other cogent evidence is available on record to substantiate the allegations of overvaluation to escape ADD. 10. At this juncture, we would like to bring on record two more aspects ancillary to these issues that would also help determine the legality of the order of confirmation of duty, penalty, etc. passed by the Commissioner. The first point that is required to be noted here is that going by Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, proper officer of Customs can have reason to doubt the truth or accuracy of the value declared in relation to any imported goods but it does not provide a method for determination of value and only provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does....