TaxTMI 
TaxTMI 
2026 (3) TMI 859
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....bulated below are being taken up together and are being disposed of by this common order. Sl. No. Appeal No. Appellant Name Capacity as Duty/Penalty Involved 1 C/41070/2016 M/s. Sleek Corporation Importer-Firm Rs.1,71,26,244/- Duty Rs.1,71,26,244/- (Section 114A) RF Rs.6,50,000/- 2 C/41071/2016 Shri Mahesh Agarwal Partner Rs.25,00,000/- (Section 114AA / 112(a)) 3 C/41072/2016 Shri Viresh Kothari Partner Rs.25,00,000/- (Section 114AA / 112(a)) 2.1 The Appellant-Importer is a partnership firm engaged in the import of industrial sewing machines, their parts and accessories, and rotary hooks, during the period from 01.06.2010 to 30.11.2014, through Chennai Seaport. The firm is represented by its partners Shri Mahesh Agarwal and Shri Viresh Kothari, who are also co-appellants as shown in the Table above. 2.2 Acting on specific intelligence regarding large-scale undervaluation and mis-declaration, officers of the Directorate of Revenue Intelligence (DRI), Bangalore, conducted searches on 01.12.2014 at the business and residential premises of the appellants. Various documents were seized, including proforma invoices, email ....
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....ity stock lots, operating at a different commercial level. 3.8 Extended limitation under Section 28(4) was not invocable as all these Bills of Entry had been assessed and cleared after scrutiny. 3.9 Past assessments were not challenged, and in view of ITC Ltd. v. CC [2019 (368) ELT 216 (SC)], demand of duty without reassessment is impermissible. 3.10 Penalties under Sections 114A and 114AA are unsustainable in the absence of proof of wilful suppression and fabrication of documents. 3.11 The following case Laws were relied upon by the appellant to challenge rejection of transaction value, re-determination of assessable value, invocation of extended limitation, confiscation, and imposition of penalties. a. Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai 2000 (122) E.L.T. 321 (S.C.) - Transaction value must be accepted unless it is shown to be hit by any of the contingencies enumerated in Rule 3(2) of the Customs Valuation Rules; sequential valuation cannot be bypassed. b. Forbo Siegling Movement Systems India Pvt. Ltd. v. Union of India 2013 (296) E.L.T. 443 (Bom.) - Before rejecting the declared value, the importer must be put on notice and give....
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.....-Del.) - Comparability of goods must be established on parameters of quality, quantity, time, and commercial level before rejecting declared value. n. RSH Distribution India Pvt. Ltd. v. Commissioner of Customs 2007 (216) E.L.T. 560 (Tri.-Del.) - Market enquiries or third-party prices cannot be relied upon without establishing identity or similarity of goods. o. Sonal Enterprises v. Commissioner of Customs, New Delhi 2015 (316) E.L.T. 144 (Tri.-Del.) - Declared value cannot be rejected without reliable contemporaneous import data. p. Shri Maruthi Nandan Impex v. Commissioner of Customs 2014 (302) E.L.T. 406 (Tri.-Mumbai) - Enhancement of value without proper sequential application of valuation rules is unsustainable. 4. The Ld. Authorized Representative Ms. Anandalakshmi Ganeshram supported the findings of the impugned order and submitted that the case is based on overwhelming documentary and oral evidence unearthed during the investigations conducted. It was further submitted that: - i. Proforma invoices recovered during the search showed substantially higher prices for identical goods. ii. Email correspondence between Shri Mahesh A....
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....cord. Section 14 of the Customs Act mandates that customs duty is chargeable on the value of imported goods based on the price actually paid or payable for the goods when sold for export to India. The statutory scheme under the Customs Valuation Rules, 2007 proceeds on the premise that the declared invoice value represents the full and truthful consideration for the import, subject to the conditions stipulated in Rule 3(2). Rule 12 empowers the proper officer to reject the declared value where there exists a reasonable doubt as to the truth or accuracy of such value. 7.2 In the present case, the rejection of the declared transaction value is not founded on mere suspicion or conjecture, but on a body of cogent and corroborative evidence unearthed during investigation. The investigation revealed the existence of proforma invoices recovered from the importer's premises indicating prices substantially higher than those declared to Customs, e-mail correspondence showing consultation with another importer regarding the value to be declared, blank letterheads and seals of foreign suppliers facilitating fabrication of documents, and private records reflecting pricing details meant for c....
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....lectronic records, when authenticated through surrounding circumstances and corroborated by independent evidence or admissions, are legally reliable and cannot be discarded on hyper-technical grounds. We further find that the diary extracts and private records recovered from the importer's premises contained contemporaneous notings of actual negotiated prices and differential amounts, which were not reflected in the Bills of Entry, and which were duly confronted to and explained by the partners during investigation. The evidentiary value of such private records is well recognized in customs law, as held by the Hon'ble Supreme Court in Collector of Customs v. D. Bhoormull 1983 (13) ELT 1546 (SC), wherein it was held that in economic offences, findings may legitimately rest on circumstantial evidence, conduct of parties and private records, judged on the standard of preponderance of probability. In the present case, the electronic records and diary entries are not standalone or ambiguous documents, but form part of an inter-locking evidentiary chain, fully corroborated by repeated and voluntary admissions under Section 108 regarding dual invoicing, suppression of actual consideration....
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....rav Kushwaha [2025 (6) TMI 1898 CESTAT (LB)] relied upon by the Respondent is squarely applicable. The Larger Bench held that where two invoices for the same consignment are found-one declared to Customs and another recovered from the importer's private records or electronic data the transaction value can be determined on the basis of the latter. In the present case, the evidence is even stronger, involving not only parallel invoices but also admissions of the importer and corroborative records. We therefore hold that the declared transaction value was rightly rejected under Rule 12 of the Customs Valuation Rules, 2007. 7.8 We further rely on the decisions rendered in the case of Eastern Silk Industries Ltd Vs. Commissioner of Customs (Airport/Admn), Kolkata and CC, Kandla Vs Essar Oil Ltd reported in 2004 (172) ELT 433 (SC), that: - "A Fraud in common parlance means dishonest dealing, deceit or cheating, etc. - It makes no difference whether fraud is committed by outrightly forging of documents or by wilful mis-declaration/misrepresentation - Fraud is fraud and there is no categories in mild frauds and severe frauds in taxation matters. Demand not time barred"....
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....ualistically, divorced from the factual realities of a given case. The appellant has contended that since contemporaneous imports of identical or similar goods existed, valuation ought to have been done under Rules 4 or 5. We are unable to accept this contention. The investigation itself revealed that several importers dealing in the same goods were under scrutiny for similar undervaluation practices. In such circumstances, contemporaneous import data becomes inherently unreliable, as tainted transactions cannot be used as valid comparables. Courts and Tribunals have consistently held that valuation based on contemporaneous imports presupposes the genuineness and reliability of such imports, which is absent here. 8.2 The applicability of Rules 7 and 8 was also rightly ruled out. Deductive and computed value methods require reliable data relating to resale prices, costs of production, and related elements. In a case involving admitted suppression, fabrication of invoices, and clandestine payment mechanisms, such data is neither available nor reliable. Consequently, recourse to the residual method under Rule 9 was not only permissible but inevitable. 8.3 Under Rule 9, value is ....
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.... obligation under Section 46 read with Section 14 is to declare the true and complete consideration paid or payable. 10.3 We also find that in the present case the evidence establishes that the appellant deliberately declared only a part of the actual consideration and suppressed the payment of differential amounts made through non-banking channels. Such facts were never disclosed to Customs and have been unearthed only through investigation. The appellant was in possession of letter pads of exporters used for preparation of invoices undervaluing the imported goods which were submitted to the customs. We therefore hold that the extended period under Section 28(4) was rightly invoked. Issue (v): Confiscation under Sections 111(d) and 111(m) 11. We find that deliberate mis-declaration of value in the Bills of Entry renders the imported goods liable to confiscation under Section 111(m) of the Customs Act, 1962. The mis-declaration in the present case is not technical or inadvertent but conscious, deliberate and systematic, as established through documentary evidence and admissions recorded under Section 108 of the Act. While certain goods are no longer physically available....
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....ATA cited by the Appellant and find that the reliance placed by the appellants on the decision is misplaced and the said decision is clearly distinguishable on facts. In Sunny Sales, rejection of transaction value was declined as the Revenue's case rested on uncorroborated documents whose authenticity and nexus with the imports were not established, and there were no admissions or reliable evidence showing that the declared price was not the actual consideration. In the present case, rejection of declared value is founded on overwhelming and corroborative evidence, including repeated voluntary admissions of both partners recorded under Section 108 of the Customs Act, recovery of parallel invoices and private records indicating higher negotiated prices, seizure of blank signed letterheads evidencing fabrication of invoices, electronic records correlating with specific consignments, and payment of differential consideration through non-banking channels. The evidentiary deficiencies noted in Sunny Sales are wholly absent here. 13.2 The other decisions relied upon by the appellants, including Eicher Tractors Ltd., Forbo Siegling, Ramana International, G.K. Mercantile, Swarna Fabrics....