TaxTMI 
TaxTMI 
2026 (4) TMI 1521
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....) Undervaluation of subject goods. * The department has alleged that the subject goods are imported by declaring lower values than the actual transaction values in order to evade customs duty with respect to the BoEs mentioned in Annexure A-1 and B-1 to the SCN F. No. GEN/ADJ/COMM/549/2024-Adjn dated 21.11.2024. The allegations are based on :- i. Note retrieved from the Mobile Phone of Mr. Madhur Jain & subjected to forensic retrieval; ii. Comparison with the import prices of M/s. Shah Foils Ltd.; iii. Comparison with the import prices of other Delhi-based importers. (b) Misclassification and denial of exemption notification No. 50/2018-Cus: * The impugned goods have been misclassified under CTH 7220 90 22 to evade the applicable Customs Duty with respect to the BoEs mentioned in A-2 and B-2 to the SCN dated 21.11.2024. The details of the impugned goods are as follows: Description of the Goods Classification according to Appellants Classification proposed by the Department Description CTH Description CTH Cold Rolled Stainless Steel Coils Nickel Chromium austenitic type- Flat-rolled products of Stai....
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....Rs. 25,00,000/- under Section 114AA. C/10254/2026 Shri Madhur Jain, Marketing Manager of Metalloys Steel Pvt. Ltd. (a) Penalty of Rs. 6,50,000/- under Section 112(b). (b) Penalty of Rs. 40,00,000/- under Section 114AA. 2. Submission of the party are as follows: - A. On the issue of Valuation: (a) The department cannot rely upon the Note derived from the personal electronic device of Shri Madhur Jain, as the goods mentioned in the note are not comparable in terms of specification and quantity, and there is no evidence that said email has been acted upon. * Vide para 12.4 of the Impugned Order, Ld. Commissioner has redetermined the value of goods mentioned in BoE at Sr. No. 2 to 3 of Annexure A-1 (VMPL) of the SCN and Sr. No. 12 to 16, 18 to 21 of Annexure B-1 (VSPL) of the SCN based on the Note retrieved from the personal electronic device of Shri Madhur Jain. * There are only 4 BoEs whose transaction values have been derived from the said note retrieved from the phone of Mr. Madhur Jain. With respect to these four BoEs, there is a mismatch between the specification of goods mentioned in the said Note and the actual goods imported by the ....
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....r of Customs, Chennai, 1999 (112) ELT 349 (Tri.-Mad) maintained by the Supreme Court in Commissioner v. United Traders (India) - 2001 (128) E.L.T. A70 (S.C), wherein it is held as under: "6. We have carefully considered the pleas advanced by both the sides. The ld. Advocate has rightly pointed out that the quotation on which the department has relied upon is not addressed to any one. It is not signed by any one and apart from that there is no evidence that this quotation has been acted upon in case of any import in India. 7. On the other hand, from reliance placed by the ld. SDR for the Revenue on 1995 (79) E.L.T. 322, we observe, is not applicable to the present facts and circumstances of the case. In that case, as is evident from para 3 of the said judgment, there were other evidences available to re-butt the price of the appellants therein namely Pan Asia Enterprises. In the present case, there is no other evidence whatsoever. Similarly, the reliance placed by ld. SDR on Manju Verma case is also not applicable to the facts and circumstances of the case. In that case, the quotation was produced by the appellants, Manju Verma in support of the price declared by h....
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....regard is placed on the decision of M/s Ruchi Enterprise Versus Commissioner of Customs -Kandla, 2025 (8) TMI 103 - CESTAT AHMEDABAD, wherein it is held as under: "6. In view of above, we hold that the evidences relied upon by the department in this case for alleging undervaluation by the appellant are not admissible as neither supplier of the goods is same nor similarity or identical nature of the goods has been established by the department. Reliance on the party's letter dated 15.02.2008 which later on, was retracted on 20.02.2008 is also not sustainable as the same has been obtained under duress. Therefore, we hold that the department has not been able to sustain its charges of undervaluation against the appellant. Agreeing with the contention of the appellant, we allow the appeal along with consequential benefits, if any." (Emphasis Supplied) * Reliance in this regard was also placed on the following decisions: (i) Commissioner of Customs, Ahmedabad v. M/s Hamilton Housewares Pvt. Ltd., 2018 (10) TMI 274 - CESTAT Ahmedabad (ii) Basant Industries vs. Addl. Collector of Customs, Bombay, 1996 (81) ELT 195 (S.C.) (iii) Aditya F....
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....cates that the rate of goods of thickness other than 0.4 mm is different. In the instant case, thickness of goods under import varies from the thickness of the comparable goods considered. The thickness of the goods under consideration is tabulated as follows: Sr. No. BoE No. Thickness (mm) Exhibit of Index of Bill of Entry 1 4162752 0.3 Exhibit-AA 2 4458950 0.28, 0.3, 0.31 and 0.29 3 4458948 0.33, 0.34, 0.35, 0.56 and 0.59 4 4576851 0.29 to 0.37 5 4576796 0.29, 0.33, .037 and 0.41 6 4576792 0.3 7 4777180 0.51, 0.53 and 0.54 8 4805987 0.36 to 0.39 9 4821961 0.36 and 0.38 10 5001534 0.28, 0.3 and 0.32 * Actual transaction value as declared by Appellants has to be accepted in the absence of any special circumstances. Reliance is placed on the decision in Agarwal Industries v. Commissioner of Customs Vizag -Tri.- Bangalore, 2006 (193) E.L.T. 421 (Tri. - Bang.), affirmed by the Supreme Court in Commissioner of Cus., Vishakhapatnam vs. Aggarwal Industries Ltd., 2011 (272) ELT 641 (S.C.), wherein it is held as under: "2. In the above cases, the importers entered into....
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....liance on Rajkumar Knitting Mills case - 1998 (98) E.L.T. 292 (S.C.) does not appear to be correct as the same was rendered in the context of the old law. In view of the above observations, we allow all the appeals with consequential relief, if any." * Reliance in this regard is placed on the following decisions: (i) Commissioner of Customs, Nhava Sheva-III vs. Granite India, 2023 (6) CEN 10 (Tri.-Bom) Affirmed by the Supreme Court in (2023) 6 Centax 13 (S.C.) (ii) Oswal Fats & Oils vs. Commissioner of Customs, Amritsar, 2007 (220) ELT 795 (Tri.-Del) * Further, various other importers have imported identical/similar goods during the same period for a similar value as declared by the appellants. Thus, the declared value cannot be rejected and has to be accepted as transaction value in the present case. (d) Duty Demand is time-barred * The SCN is issued on 21.11.2024, for imports made for the period of November 2019 to 15 November 2022. As per Section 28(1), the SCN can be issued within two years from the relevant date. In the instant case, demand has been raised under Section 28(4) of the Customs Act, 1962 which is not invokable ....
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....ether with 300 series grades). With this specific clarification, it is seen that in austenitic stainless steel, the Nickel content can vary as low as 0.2% to 14%, whereas in the present case the goods contain 1.0101.060% and Chromium is 12.5%, therefore, it is clearly in compliance to the specification for classifying the product as 'Austenitic Nickel Chromium Stainless Steel'. We find that department's reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited cannot be a conclusive factor to classify the product as other than Austenitic Nickel Chromium Stainless Steel for the reason that from the said evidence it is clear that not only those products which contain 4.5% to 12% Nickel will fall under Austenitic Stainless Steel but even the low content Nickel in Stainless Steel will also fall under Austenitic Stainless Steel. Therefore, the mere reliance on the websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited is incorrect for arriving at classification. Therefore, on the fact of the case which is not under dispute and on the authority mainly Indian Standards, the goods imported by the appellant a....
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....ver, in the instant case, the demand has been raised under Section 28(4) of the Customs Act, 1962 which is not invokable in this case as there was no suppression or collusion on the part of the Appellant. * The demand is time-barred with respect to the classification, as SCNs have been issued by the department on the basis of Mill Test Certificates provided by the Appellant. On the aspect of exemption, there was no suppression, as all the details were provided by the Appellant at the time of import. Thus, there is no suppression on the part of the Appellant. * They rely on the decision of Gulshan Exim Private Limited, Ashok Kumar, Gupta Steel, Mohan Jain, Bhagvan Shri Strips Pvt. Ltd. Versus C.C. Mundra, Gujarat, 2025 (12) TMI 389 - CESTAT Ahm., wherein it is held as under: "6.7 As regard invocation of extended period, we find that both factual as well as various legal considerations are involved in the present matters as discussed above, for determining correct classification of the imported goods. We further find that the SCNs have been issued by the department on the basis of information provided/ made available by the party. We therefore, are not incl....
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.... SCN sought re-determination of transaction value under Rules 3- 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, read with Section 14 of the Customs Act, 1962. Issue 2: Mis-Classification of Imported Goods The imported goods, i.e., Cold Rolled Stainless Steel Coils Grade J3, were classified by the importers under CTI 72209022 (Nickel Chromium Austenitic Type) to avail 45% tariff concession under Notification No.50/2018-Customs dated 30.06.2018. The SCN alleged that correct classification was CTI 72209090 (Other), because: * Mill Test Certificates/Inspection Certificates produced by the importers showed Chromium (Cr) content of approximately 13% and Nickel (Ni) content of approximately 1% (sometimes 0.773%) * For stainless steel to qualify as "Nickel Chromium Austenitic Type" (200 series), it must have Ni content of 3.5%-6% and Cr content of 16%-19% (as per IS 6911:2017 and BIS standard for Austenitic Stainless Steel) * The imported goods, with Ni content of ~1% and Cr ~13%, are not Austenitic Stainless Steel and do not qualify under CTI 72209022 * Shri Madhur Jain himself admitted that Grade J3 is a "customised gra....
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....9022. This demonstrates deliberate, conscious mis-classification. (b) On Undervaluation: * The "Note" retrieved from Shri Madhur Jain's mobile phone contains actual CIF rates for each specific consignment corresponding to actual BoE numbers, weights, and dates. These rates (USD 1,635-2,125/MT) are 2-3 times the declared values (USD 750/MT) and are thus, a direct corroborating evidence - not circumstantial inference alone. * Counter to electronic evidence challenge: (i) The mobile phone was seized under a valid Panchnama dated 22.11.2022 in the presence of two independent panchas. It was sent to NFSU Gandhinagar - a Government forensic laboratory for forensic analysis. (ii) Shri Madhur Jain himself gave a certificate under Section 138C of the Customs Act and Section 65B of the Indian Evidence Act confirming that the phone was under his control and functioning during the relevant period. (iii) In his statement dated 06.04.2023, Shri Madhur Jain confirmed that "all rate finalisation was done through WhatsApp" and that "the Note retrieved from his phone contained actual prices" - this is an admission under oath. * Count....
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....vely verifiable from the Mill Test Certificates filed by the appellant themselves, and unambiguously fails the Austenitic classification test. Deliberate misclassification to claim concession is not an "interpretational dispute." (d) On penalty under Section 114AA (Shri Madhur Jain): * Section 114AA requires knowingly or intentional making of false declarations. Shri Madhur Jain's own statement establishes: (i) he directed for the change of CTI to 72209022 to claim the Notification 50/2018 benefit, (ii) he handled all rate finalisation and was aware that actual prices were higher, (iii) he maintained the Note with actual prices on his own phone. This is conclusive evidence of knowingly and intentional making of false declaration. * Counter to "no mens rea" argument: The adjudicating authority has rightly observed that Shri Madhur Jain's admission in his statement dated 06.04.2023 clearly establishes mens rea. He was not a passive functionary in the firm but the driving force behind both mis-classification and undervaluation. (e) On penalty under Section 114AA (Shri Vinaye Jain): * He was the Director of....
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....enitic Stainless Steel'. The contention of the Revenue is that to qualify as Nickel Austenitic Stainless Steel, nickel content should be ranging from 4.5% to 12%, therefore as per the department, goods are not classifiable under 7220 9022. The important point to be examined is to qualify the product namely, Nickel Chromium Austenitic Stainless Steel whether it is mandatory to have Nickel content of 4.5% to 12% or otherwise. The Revenue has solely relied upon the information available on websites of M/s Aalco metals ltd. (England and Wales) and M/s ASM international Limited wherein the range of Nickel shown is 4.5% to 12% for a product namely Chromium Nickel Austenitic Stainless Steel. However that information does not further confirm that even if the Nickel percentage is less than that the same will be categorized as Chromium Nickel Austenitic Stainless Steel or otherwise. In this regard, the appellant have produced various authorities to substantiate their claim that even the lower percentage of Nickel content will not change, the category of the product as Nickel Chromium Austenitic Stainless Steel. In this regard, the appellant have relied upon the Indian Standard IS 15997; 2012....
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....tandards, the goods imported by the appellant are correctly classifiable under Chapter Tariff Heading 7220 9022 as Nickel Chromium Austenitic Type." 5.1 It is thus clear that the range of nickel and chromium content in the instant case is at par with the impugned product in the case of M/s Shah Foils Ltd (cited supra). Therefore, the product in the instant case also is claimed by the appellant as classifiable under CTH 7220 9022 as Nickel Chromium Austenitic Type. We also find that the benefit of Notification No. 50/2018-Cus dated 30.06.2018 was denied by the Commissioner on the ground that the same was not available to those goods which are classified under CTH 72209090. 5.2 However, we also note that this Bench with the similar constitution in the matter of Gulshan Exim Pvt Ltd & Ors. Vs. CCE, Mundra Gujarat as reported in 2025 (12) TMI 389 CESTAT Ahmedabad, while deciding classification of similar products i.e. Nickel Chromium austenitic type- Flatrolled products of Stainless Steel claimed to be falling under heading 7220 9022 with benefit of Notification No. 50/2018-Cus dated 13.06.2018, after distinguishing the decision of Shah Foils Ltd (Supra) remanded the matter on cl....
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....hat the issue is contentious and various considerations will come to the root of the matter to decide the exact nature of imported goods such as processes it has undergone, it's grade, apart from its composition. In view of our above observation, we find that there is a scope of even going beyond the heading suggested by either party when exact nature of the product gets determined. 6.7 As regard invocation of extended period, we find that both factual as well as various legal considerations are involved in the present matters as discussed above, for determining correct classification of the imported goods. We further find that the SCNs have been issued by the department on the basis of information provided/ made available by the party. We therefore, are not inclined to allow invocation of extended period. 6.8 We also would like to address the issue of the Certificate of Origin being genuine or not? We find that we are concerned with a non-tariff notification which is seeking to give benefit of an international business treaty entered under a preferential agreement by framing Rules of Determination Of Origin Of Goods under Asia Pacific Trade Agreement Rules, 2006.....
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.... various aspects as were directed to be looked into in Gulshan Exim Pvt Ltd case. The form in which goods are imported i.e. coils or otherwise as well as various surface treatments etc., are also relevant factors for looking into the details of tariff headings. In that matter, we found that some portion of the demand was surviving otherwise also and was not hit by limitation and accordingly, interest and penal possibilities could not be ruled out, which is not the case in the present instance as whole of the duty demand is barred by limitation and therefore, demand will get extinguished in total and issue of classification will get reduced to academic interest only. 6. Regarding Second issue, on the point of undervaluation, we find that nothing by way of remittance of extra amount has been shown by the department and apart from the stated "Note" retrieved from the mobile phone of Shri Madhur Jain containing certain CIF rates has not been got authenticated from both sides by recording statement. Therefore, it does not meet the requirements of Section 138C of the Customs Act, 1962. Further, details of the goods mentioned in the note retrieved from the mobile do not match with the ....
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....uting a single computer; and references in this section to a computer shall be construed accordingly. (4) In any proceedings under this Act and the rules made thereunder where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say,- (a) identifying the document containing the statement and describing the manner in which it was produced; (b) giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in sub-section (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it. (5) For the purposes of th....
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....on on all aspects and various clauses in Section 138C indicated above being statutory provision. Similarly, we also find that till the time the valuation was taken of the comparable goods in most respects, same cannot be taken to be based on contemporaneous imports of similarly classified goods. Further, we find that the goods in the case of Shah Foils Pvt Ltd and Vasko Steel P Ltd as have been exhibited chart above at page 7 were neither comparable nor similar goods as has been submitted by the appellants within Rule 2(f) of the Valuation Rules. The grades as well as dimensions taken and widths etc. were required to be the same and the commercial levels to be of the same level that the such contemporaneousness does not emanate from the record so as to indicate that the goods were similar or comparable. In view of the foregoing and also in the face of the facts that the classification of the goods as made out by either side need reconsideration, we find no reason on appreciating the evidence on record that the transaction value was/is rejectable, even at this stage. 6.2 In view of the foregoing, the department has not been able to discharge the burden of showing undervaluation i....