TaxTMI 
TaxTMI 
2026 (4) TMI 1099
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....t of Heavy Melting Steel (HMS) scrap as well as cast iron scrap, re- melting scrap etc. During investigation, they recorded the statements of Shri Prem Prakash Gupta, Vice-President (Commercial) and Shri Praksh Shivratan Lakhotia, Manager (Purchase) of M/s. Electrotherm (India) Ltd., statement of High Sea Sellers namely, Shri Hanif Akbani (Proprietor of M/s. Akbani Traders, Rajkot), Statement of Shri Pratik Sunil Garg (Director of M/s. Raj kripal Lumbers Ltd, Gandhidham,) statement of Shri Mahendra Bhavanji Chande (Authorised Signatory of M/s. Ishita Overseas), statement of Shri Jitendra Jain (Partner of Shri Adinath Tradelinks, Gandhidham,) statement of Shri Manoj Satnam (Prop. of M/s. Trimurti Impex, Gandhidham) and the statement of Shri Atul Agarwal, Director of appellant company. On the basis of incriminating documents resumed from both the premises and the recorded statements, the department made a case of undervaluation of HMS Scrap imported directly as well as and re- meltable scrap purchased from the High Sea Sellers. 1.1 After Completing investigation, Revenue issued show cause notice dated 23.08.2012 to M/s. ASR Multimetals Pvt. Ltd. proposing confiscation of seized go....
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....umar & Brothers, M/s. Adinath Tradelinks, M/s. Aggarwal Sons, M/s. Akbani Traders, M/s. Ishita Overseas, M/s. Morsons Enterprises and M/s. Adinath Polyfills have no merit and therefore, he upheld the said order in respect of above 9 appellants by rejecting their appeals. He however, set aside penalty imposed on M/s. Trimurti Impex on the ground that the proprietor of the said firm had expired and therefore, proceedings in the case abate. Aggrieved with the above order, all the 9 parties filed appeals before this Tribunal. The main appeal is of M/s. ASR Multimetals which involve duty demand, interest and penalty whereas, other appellants are aggrieved by imposition of penalty in connection with undervaluation of import by M/s. ASR. Therefore, appeal of M/s. ASR is being taken up for discussion which will cover facts and submissions of other appellants aggrieved by imposition of penalty. 2. In their appeal, M/s. ASR Multimetals took the following grounds:- * The learned Commissioner (Appeals) has violated the principles of natural justice by upholding the order of the lower authority passed without furnishing copies of the relied upon documents (RUDs), without allowing cr....
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....8 (225) E.L.T. 193 (Bom.). * Annexure B to the SCN though shows re-determined assessable value and the differential duty payable by the appellant but it nowhere explains how this has been worked. Thus, in absence of any documentary evidences re-determined assessable value and differential duty is not tenable. The reasons for rejecting declared transaction value as discussed in para 25.1 of the show cause notice are not sustainable as deposition made by the Director is not very clear, specific and voluntary. * If value considered by the investigation is taken into consideration against certain Bills of entry, difference in assessable value and duty is very negligible as shown below:- Annex-B No. BE No. Appeal Para No. High Sea Seller Name Differential duty (in Rs.) 17 124985 12.6.5 K.M. Tradelink 10,271/- 16 124429 12.6.6 Rama Impex 52,680/- 9 121510 12.6.7 Yogi Traders 3,047/- 15 124020 12.6.8 M/s. Ishita Overseas 1,080/- 48 241022 12.6.9 M/s. Adinath Tradelink 549/- 41 237692 12.6.10 Aggarwal Sons 6,357/- 38 234420 12.6.11 Aggarwa....
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....6 (S.C.). * In view of above, M/s. ASR Multimetals Pvt. Ltd. prayed for allowing their appeal and setting aside the order of demand of duty, interest and penalty. 2.1 In his appeal, Shri Atul Agarwal, Director of M/s. ASR Multimetals submitted that he is not liable to any penalty as the department's allegations are not supported by any credible and independent evidence. Para 11 of the impugned order shows that Ld. Commissioner (Appeals) has not even gone through the notice, RUD and the grounds of appeal. His statements were recorded on 10.10.2008 & 06.08.2011 wherein, certain admissions about cash payment to High Sea Sellers in addition to invoice value were unlawfully recorded by the investigating officers, and hence, these are not voluntary. No other credible evidence has been brought on record by the department and therefore, penalty imposed on him may be set aside.. He relies on the decision of Hon'ble Hight Court of Kolkata in the case of Puni Dhapa Lokeswara Rao (cited supra) and decision of Hon'ble Bombay High Court in the case of Foto Centre Trading Co. (cited supra). 2.2 M/s. Morsons Enterprise and other appellants where statements not recorded; submitted th....
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....Bill of entry. He however admitted differential duty demand against some Bills of entry (as mentioned in their appeal book) where by oversight, lower value has been declared. He also pleads that none of the appellants including Shri Atul Agarwal, Director of M/s. ASR Multimetals are liable to any penalty on the charges of abetment in evasion of customs duty by M/s. ASR Multimetals. 3.2 Learned Counsel Shri Vikas Mehta appearing for M/s. Morsons Enterprise, M/s. Adinath Polyfills and M/s. Akbani Traders on whom penalty of Rs.1,00,000/- each has been imposed under Section 112(b) of the Customs Act, 1962 argues that M/s. Morsons and M/s. Adinath Polyfills were not interrogated during investigation and penalty has been imposed without any evidence. The impugned order also, does not mention or refer to any evidence gathered from M/s. Morsons and M/s. Adinath Polyfills and therefore, entire proceedings against them have been concluded on assumptions and presumptions without any concrete and cogent evidence. Regarding penalty on M/s. Akbani Traders, he submits that proprietor of M/s. Akbani Traders has categorically stated in his statement dated 11.03.2011 that they have not collected ....
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....ives details such as B/E number & date High Sea Seller's name, quantity, unit price declared in the Bill of entry, declared assessable value, actual rate as per evidences available, insurance amount, freight (wherever applicable), High Sea Sales Commission and landing Charges @1% and thereafter, re-determined assessable value and differential duty liability. 5.1 We find that the department has not adduced any evidence of contemporaneous import of similar or identical goods in respect of 36 Bills of entry where they had directly imported HMS scrap and other re-meltable scrap and duty has simply been demanded by taking same value as determined for scrap purchased on High Sea Sales basis. During hearing, learned AR was repeatedly asked to explain reasons of rejection of declared value of goods directly imported by M/s. ASR and re-determination of the same. He however could not explain any basis nor could he produce any documentary evidence to support higher value taken by the department for confirming the differential duty. It has been held in a catena of decisions that declared value cannot be rejected without reasonable belief that the value has been suppressed and only after suc....
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....empt to conceal the real transaction in money." c) Haripriya Traders Vs. Commissioner of Customs, Cochin reported in (2023) 5 Centax 209 (Tri.-Bang):- "Valuation (Customs) - Contemporaneous import price of similar goods - As per definition of term 'similar goods' under Rule 2(f) of Customs (Determination of Value of Imported Goods) Rules, 2007, goods being compared must have like characteristics and like component material, which enable them to perform same functions and to be commercially interchangeable with goods being valued having regard to quality and reputation - This ipso facto makes quality assessment compulsory to ascertain comparable and interchangeable nature of goods under comparison - Rules 4, 5 and 12 of Customs (Determination of Value of Imported Goods) Rules, 2007." 5.2 Section 14 of Customs Act, 1962 deals with valuation of goods, Subsection (1) of which states that, "for the purposes of the Customs Tariff Act, 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 ex....
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....evant transaction for assessment and Rule 4 of Customs Valuation Rules, 1988 would apply. Hon'ble Supreme Court, in the case of M/s. Hyderabad Industries Limited [2000 (115) E.L.T. 593 (S.C)] have also upheld that the service charges/high-seas-sales-commission ('actuals) are includable in the CIF value of imported goods. Therefore, it is clarified that the actual high-seas-sale-contract price paid by the last buyer would constitute the transaction value under Rule 4 of Customs Valuation Rules, 1988 and inclusion of commission on notional basis may not be appropriate. However, the responsibility to prove that the high-seas-sales-transaction constituted an international transfer of goods lies with the importer. The importer would be required to furnish the entire chain of documents, such as Original Invoice, high-seas-sales-contract, details of service charges/commission paid etc., to establish a link between the first international transfer of goods to the last transaction. In case of doubt regarding the truth or accuracy of the declared value, the Department may reject the declared transaction value and follow the sequential methods of valuation under Customs Valuation Rules, 1988.....