TaxTMI 
TaxTMI 
2026 (7) TMI 1462
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....,819/- under the proviso to section 28(1) of the Customs Act, 1962 [Act], along with interest under section 28AB of the Act. He also confirmed demand of CVD of Rs. 25,34,066/- and customs duty of Rs.1,10,34,748/- under the proviso to section 28(1) along with interest under section 28AB. He imposed penalty of Rs. 2,24,47,633/- under sections 112 (a) & (b) and 114A of the Act on the importer and imposed penalty of Rs.6,00,000/- on Shri Raj Kumar Mansukhani under section 112(b) of the Act. He also imposed personal penalties on some persons. Details of the duty confirmed and penalties imposed on the two appellants herein are as follows: Appeal Appellant Duty/Fine/Penalty (Rs.) Sections C/238/2011 HMD Exim Pvt. Ltd. (the importer) Duty Anti-dumping duty Rs.88,78,819/- CVD Rs. 25,34,066/- Customs duty Rs. 1,10,34,748/- Penalty Rs. 2,24,47,633/- Proviso to section 28(1) Sections 112 (a) & (b) and 114A 2. This appeal was initially disposed of by Final Order No. 54724-54769/2017 dated 27.6.2017 by remanding the matter to the Commissioner with a direction to decide the matter after the decision of the Supreme Court in the appeal against the judgment of Del....
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....earing or any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may dismiss the appeal for default or may hear it ex parte." Considering the aforesaid provisions, this Court held as under :- "7. The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of Section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear. As observed in Hukumchand Mills Ltd. v. CIT, the word "thereon" in Section 33(4) restricts the jurisdiction of the Tribunal to the subject-matter of the appeal and the words "pass such orders as the Tribunal thinks fit" include all the powers (except possibly the power ....
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....ribunal has to dispose of the appeal on the merits and cannot short-circuit the same by dismissing it for default of appearance." 13. Applying the principles laid down in the aforesaid case to the facts of the present case, as the two provisions are similar, we are of the considered opinion that the Tribunal could not have dismissed the appeal filed by the appellant for want of prosecution and it ought to have decided the appeal on merits even if the appellant or its counsel was not present when the appeal was taken up for hearing. The High Court also erred in law in upholding the order of the Tribunal. 14. We, therefore, set aside the order, dated 18-1-2014 passed by the High Court of Judicature of Bombay, Bench at Aurangabad and also the order, dated 22-8-2012 passed by the Tribunal and direct the Tribunal to decide the appeal on merits. 15. Accordingly, the appeal is allowed with a cost of Rs. 25,000/- to be payable by the Respondent. (emphasis supplied) 6. Following the law laid down by Supreme Court, we have heard learned special counsel for the Revenue and perused the appeal and proceed to decide the matter. 7. This appeal filed by th....
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....ed 13.8.2006to the importer and others. ii) The proposals in the SCN were decided by the Commissioner in the impugned order rejecting the transaction value of the imported goods under Rule 10A of the Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988 [Valuation Rules], re-determining the value, confirming demand of differential duty, confiscating the imported goods, and imposing penalties. iii) As per section 14 of the Act and Rule 3 of the Valuation Rules, the transaction value shall be the value for the purpose of determining the duty where the seller and buyer have no interest in the business of each other and price is the sole consideration for sale. Valuation Rule 10A empowers the proper officer to reject the transaction value and if he does so, the value should be determined sequentially under Valuation Rules 5 to 8. iv) In this case, of the 73 consignments of watch parts, 69 consignments (95%) were imported through M/s. Legend Watch Manufacturers Ltd. Hong Kong and 1 consignment was imported through Compu X press, Hong Kong which were set up by the Moolrajani family in Hong Kong. The Directors of Legend Watch were Shri N....
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.... companies which sold them the goods. xii) With reference to Leather straps the duplicate invoice no. LW/8843/05 dated 30.9.2005, submitted by the appellant, the value declared was USD 420 for 7000 leather straps whereas the original invoice was found to be for HK$ 6749.5 (equal to USD 868.67). xiii) As per invoice no. LW 9090/06 received under email dated 23.1.06, M/s. Legend Watch, HK despatched 583 cartons of various parts for USD 32268.77 (C&F) but the value was mis-declared before customs as USD 27,695.77 (C&F) before customs producing a duplicate invoice showing the same number and date. xiv) As per invoice no. LW 9065/06 received under email dated 16.1.06, M/s. Legend Watch, HK despatched various parts to the appellant for USD 17,225 (CIF) but the value was mis-declared before customs as USD 16964.93 (CIF) before customs producing a duplicate invoice showing the same number and date. xv) An email dated 7.6.06 was sent by M/s. Henkei Watch Electro Plating Co. Ltd. HK to Shri R K Mansukhani along with four invoices for which payment of HK$ 21,255 was pending. Similar emails were received from other sellers in Hong Kong. xvi) In view....
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....ermine the value of imported goods. (c) Where no sale referred to in clause (b) of sub-rule (1) of this rule, is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments, whether such adjustment leads to an increase or decrease in the value. (2) Where the costs and charges referred to in sub-rule (2) of Rule 9 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found; the lowest such value shall be used to determine the value of imported goods. Rule 6 Transaction value of similar goods. - (....
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....A. Computed value. - Subject to the provisions of Rule 3, the value of imported goods shall be based on a computed value, which shall consist of the sum of:- (a) the cost or value of materials and fabrication or other processing employed in producing the imported goods; (b) An amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to India; (c) the cost or value of all other expenses under sub-rule (2) of rule 9 of these rules. Rule 8 Residual method. -(1)Subject to the provisions of Rule 3 of these rules, where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 14 of the Customs Act, 1962 (52 of 1962) and on the basis of data available in India. (2) No value shall be determined under the provisions of this rule on the basis of - (i) the selling price in India of the goods prod....
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....ly, to the seller; (e) all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable. (2) For the purposes of sub-section (1) and sub-section (1A) of Section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include - (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and (c) the cost of insurance : Provided that - (i) where the cost of transport referred to in clause (a) is not ascertainable, such cost shall be twenty per cent of the free on board value of the goods; (ii) the charges referred to in clause (b) shall be one per cent of the free on board value of the goods plus the cost of transport referred to in claus....
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....he Bill of Entry and the Import Declaration and I re-determine under Rules 4,5,6,7, 7A &8 of the Customs Valuation (Determination of Price of Imported Goods) Rules 1988, the correct value as detailed below in respect of consignments detailed in Annexure A-I & II :- S. No. Name of the Port Declared assessable value Re-determined value i Ports at Jaipur 1,66,17,607/- 4,05,43,052/- ii JNPT, Nhava Sheva 15,66,261/- 31,26,637/- Total 1,81,83,868/- 4,36,69,689/- ....." 16. As per the Valuation Rules, the value should be determined as per the transaction value (Rule 3) with adjustments as per Rule 9 if necessary or it should be determined sequentially under Rules 5 to 8. There is no provision for determining the value under several Rules (4,5,6,7,7A &8) together. Annexures I&II to the SCN are at pages 113 to 121 of the appeal. These also do not indicate as to which Rule was adopted to re-determine the value for which good. The columns of the tables in these two Annexures are listed below: 1. S. No. 2. Name of the supplier 3. Bill of Entry No./ Parcel No. 4. B/E date/ Date 5. Invoic....
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....ter firms of Hong Kong were recovered from the appellants premises during investigation which further goes to show that the importer and the exporters were related persons. (iv) The prices in the invoices which were declared were exceptionally low. (v) The differential amount between the prices declared in the Bills of Entry and corresponding invoices and the actual price was paid in cash to the Hong Kong suppliers. 19. As per Rule 10A, the proper officer can reject the transaction value if he has reasonable doubt about the truth and accuracy of the transaction value. In our considered view, the fact that the buyers and sellers are related being owned or controlled by the same set of persons is sufficient to entertain a reasonable doubt about the truth and accuracy of the transaction value. Therefore, the rejection of the transaction value in the impugned order needs to be upheld even if there is not sufficient evidence to prove that any amount was paid in cash to the suppliers. 20. Next is the question of re-determination of the value. The Valuation Rules provide a sequence of methods to be employed for the purpose. It is not open to the officer to use....
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.... been re-determined based on the actual invoices recovered from the importer during the investigation under Rule 4 of the Valuation Rules. Thus, the transaction values themselves were the basis of assessment but it was done on the basis of the true invoices recovered during investigation. The details of the actual values have been given in a table in paragraph 124.1. We find no infirmity in this method of re-determination of the values and the consequential confirmation of demand of Rs. 1,20,745/- as duty under the proviso to section 28(1) of the Act. 24. Watch dials of Chinese origin: In paragraph 124.2 of the impugned order, the values of watch dials were re-determined under Valuation Rule 8 as it was found not possible to determine the values under Rule 5 (transaction values of identical goods),Rule 6 (transaction values of similar goods) or Rule 7 (sale price of such goods in India). We find the assertion in the impugned order that no identical or even similar Watch dials were imported or sold in India during the relevant period unbelievable. Watch dials are not some hi-tech or rare or unusual goods. How is it likely that in a country of almost a billion people (even du....
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....uppress the value. Thereafter, finding that there were no imports of identical goods or similar goods and hence the value cannot be determined under Rules 5&6 and such goods were also not sold in India and hence the value cannot be determined under Rule 7 and such goods were also not manufactured in India and hence value cannot be determined under Rule 7A either, the values were determined under Rule 8. This re-determination is based on (a) average under valuation of 60% said to be found during the investigation; (b) invoices of actual supplier Hang Kei watch, Hong Kong retrieved from the computer of the importer, and (c) sale invoices of such bands in India and the corresponding ex-factory prices. The so called average undervaluation of 60% is not a method known to law. It is clearly an arbitrary value whose use is explicitly prohibited under Rule 8(2) (vi) of the Valuation Rules. If there were invoices of the actual supplier retrieved from the computer of the importer, there is no reason to presume that those invoices were of identical or similar goods (in which case, Rules 5 or 6 would clearly apply) and if the retrieved invoice was for sale within Hong Kong, such invoices ....