TaxTMI 
TaxTMI 
2026 (8) TMI 432
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....as rejected, differential customs duty amounting to Rs.2,71,92,265/- was confirmed under Section 28(8) of the Customs Act, 1962 together with applicable interest under Sections 28AB/28AA, an equivalent penalty was imposed upon the appellant-company under Section 114A of the Customs Act, the imported goods were held liable to confiscation under Section 111(m) with an option to redeem the same on payment of redemption fine of Rs.2,15,14,396/- under Section 125, and a separate penalty of Rs.20,00,000/- was imposed upon Shri Nand Kishore Chauhan. The impugned order has been passed pursuant to the remand ordered by this Tribunal vide Final Order No. 75245/2025 dated 28.01.2025. 2. The dispute traces its origin to imports of Slack Wax of Iran/UAE and Indonesian origin effected by the appellant-company through fifty-two Bills of Entry filed at Kolkata and Haldia Ports during the period April, 2008 to December, 2011. Slack Wax is a petroleum-based semi-solid mixture of paraffin wax and mineral oil, generated as a by-product during the refining of lubricating oil and widely used as the basic raw material for manufacture of various grades of paraffin wax after de-oiling and bleaching. It ....
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....d by other importers and treated the same as indicative of a larger pattern of undervaluation in imports of Slack Wax. (b) Analysis of Petrosilicon price data: The Revenue further placed reliance upon month-wise international price data published by M/s. Petrosil Group, Mumbai, to contend that the transaction values declared by several importers, including the appellant, were substantially lower than the prevailing international prices. According to the Revenue, the values declared by the appellant were comparable to those declared by other importers sourcing identical goods from suppliers based in Iran, the UAE and Taiwan. On the basis of such comparative price analysis, it was alleged that the declared transaction values did not represent the true transaction value and were, therefore, liable to be rejected under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, with consequential re-determination of assessable value. 4. In the course of such investigation, simultaneous searches were conducted on 02.02.2012 at the premises of several importers, Customs House Agents and other entities, including the office premises of the appellant-comp....
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.... 9 420374 15.07.2008 Slack Wax 10 426577 19.08.2008 Slack Wax 11 429752 03.09.2008 Slack Wax 12 431727 15.09.2008 Slack Wax 13 433878 25.09.2008 Slack Wax 14 434401 29.09.2008 Slack Wax 15 435142 01.10.2008 Slack Wax 16 441543 12.11.2008 Slack Wax 17 466680 23.04.2009 Slack Wax 18 467053 24.04.2009 Slack Wax 19 468435 01.05.2009 Slack Wax 20 472560 25.05.2009 Slack Wax 21 475453 10.06.2009 Slack Wax 22 477460 19.06.2009 Slack Wax 23 479240 19.06.2009 Slack Wax 24 480419 06.07.2009 Slack Wax 25 484436 27.07.2009 Slack Wax 26 550526 10.07.2010 Slack Wax 27 522164 08.02.2010 Slack Wax 28 528727 16.03.2010 Slack Wax 29 539352 14.08.2010 Slack Wax 30 545033 10.06.2010 Slack Wax 31 545032 10.06.2010 Slack Wax 32 548926 01.07.2010 Slack Wax 33 553901 26.07.2010 Slack Wax 34 556283 05.08.2010 Slack Wax 35 566725 24.09.2010 Slack Wax 36 569521 07.10.2010 Slack Wa....
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....lisation of provisional assessment. 6.2. In view of the above Order of the Hon'ble Division Bench of the High Court at Calcutta dated 10.11.2014, the Commissioner of Customs (Port), Kolkata, vide Order-in-Original dated 13.01.2017, set aside the Show Cause Notice dated 27.06.2013 in the appellant's case and directed the jurisdictional assessing groups to first finalise the provisional assessments in respect of the 52 Bills of Entry relevant herein, while granting liberty to initiate fresh proceedings by way of Show Cause Notices after finalization of the assessments thereof in accordance with law. 7. Pursuant thereto, the provisional assessments in the instant case pertaining to 52 Bills of Entry were finalised by five separate Final Assessment Orders dated 23.03.2017, 17.05.2017, 10.01.2018, 20.02.2018 and 04.07.2018 by adopting the enhanced values determined by the Department during provisional assessment. Proceedings arising out of Final Assessment 8. The aforesaid Final Assessment Orders were challenged by the appellant before the Commissioner of Customs (Appeals), Kolkata. Vide Order-in-Appeal Nos. KOL/CUS/PORT/95 & 96/2019 dated 28.08.2019, the Commissioner (A....
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....reto. Vide Final Order No.75245/2025 dated 28.01.2025, this Tribunal set aside the adjudication order and remanded the matter for de novo adjudication after supplying the relied upon documents, affording adequate opportunity of hearing and adhering to the principles of judicial discipline. 9.3. The above CESTAT order directing remand was accepted by the Department on 14.05.2025. 10. In terms of the Final Order No. 75245/2025 dated 28.01.2015 passed by the Tribunal, the matter was taken up for adjudication by the Principal Commissioner of Customs (Port), Custom House, Kolkata. 10.1. During the course of de novo adjudication proceedings, the appellant had inter alia made reference to the specific case of, in different but similar matters, pertaining to : (i) M/s. Shri Hari WaxO-Chem Pvt. Ltd.; (ii) M/s. Shiv Chemical Industries; (iii) M/s. Chowdhury Udyog & Others, arising out of the similar investigations into the alleged undervaluation of imports of Slack Wax and Residue Wax in different but similar matters. In this regard, it was pointed out that the adjudication proceedings in the cases of M/s. Shri Hari Wax-O-Chem Pvt. Ltd., M/s. Deep Jyoti....
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....uring the course of their investigations into purported under-valuation of imported wax indulged in by unscrupulous importers of India. Without entering into any other aspect of the matter, it is demonstrable that the purported parallel invoices, proforma invoice, email communications, clandestine account details of payments made to overseas suppliers and outstanding dues etc. do not relate to the instant appellant in any manner whatsoever. There is no evidence establishing any dealing between the instant appellant and the alleged M/s Abhisek India, M/s Shree Abhisek India, Sri Ram Dev Purva, Sri Noor Mohammed, M/s Fajar Tabandeh International Trading, M/s Ramel International FZE, Jaju Petrochemical Pvt. Ltd, M/s Harmony Impex FZE, Global Future Expander Corp, M/s Barasat Wax Refiner, M/s Kavya International, M/s Universal Traders, Usha Lube Pvt. Ltd., M/s Jemasco Utama PT and Sri Ramesh Parekh and the Customs Department wholly failed to prove the contrary. Section 28 of the Customs Act read with Section 124 thereof was ab initio unavailable to the Department in view of such undeniable factual position. (ii) It was specifically demonstrated during the course of hearing bef....
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....ould have been followed and all demands dropped. Factually, the instant appellant's case rested on better footing (i) Even otherwise, the issues raised in show cause notice dated 20.03.2018 stand squarely decided in favour of the importers/similarly placed assessees and against the Revenue by the aforesaid final order dated 09.08.2019 of this Tribunal passed in the case of Shri Hari Wax-O-Chem Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata and connecting appeals (C/75687/2018 with other appeals). The said appeal had also originated from investigations conducted by DRI authorities in relation to purported evasion of customs duty by way of under valuation of slack wax and residue wax indulged in by few Indian importers. When the respective appeals travelled up before this Tribunal from confirmation of demands by the adjudicating authorities, this Hon'ble Tribunal was pleased to set aside all demands and allow each of the appeals by holding, inter alia, that the adjudicating authority could not have denied cross-examination of prosecution witnesses in contravention of Section 138B of the Customs Act and that the entire investigation had erroneously proceeded on the basi....
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....t's case, there could arise no question of further re-determination of transaction values or piecemeal assessments specific to the issue of undervaluation (i) Further, it has been demonstrated that Orders-in-Appeal bearing No. KOL/CUS/PORT/95/2019 and KOL/CUS/PORT/96/2019, both dated 28.08.2019, had attained finality in the instant appellant's case, whether under it had been held that enhancement of assessable values was liable to be set aside. In view of the decisions of ITC Limited v. Commissioner, reported in 2019 (368) ELT 216 (SC) and Rumen Dey v. Commissioner of Customs (Prev.), Shilling reported in 2023 (386) ELT 894 (T), no demand for differential duty could have sustained. The Principal Commissioner of Customs (Port), Kolkata erroneously decided the said issue of jurisdictional bar on the mis-conceived basis that the said Orders-in-Appeal dated 28.08.2019 did not involve the aspect of under valuation raised by DRI authorities which formed subject matter of the purported show cause notice dated 20.03.2018. The adjudicating authority clearly fell in error by refusing to acknowledge that there could not have been piecemeal assessments or simultaneous proceedings rega....
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....epartmental authorities, including DRI, had misconstrued the principles of valuation and acted dehors the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (i) Even otherwise, the purported show cause notice erroneously proposed rejection of declared values under Rule 12 of CVR and redetermination of value in terms of Rule 9 thereof. The Customs Department sought to question the genuineness and reliability of data pertaining to import of identical goods into India during the contemporaneous period, which is illegal and unreasonable. It is also denied and disputed that the values adopted under the residual method, details whereof are given at paragraphs 16.1 to 16.5 of the de-novo order of adjudication under challenge read with page Nos. 38 to 43 of the show cause notice, can be understood as valuation determined using reasonable means consistent with the principles encapsulated in CVR and on the basis of data available in India. There is no concrete finding in the impugned Order-in-Original as to why loading of values in the range of 300 USD to 700 USD should be accepted in the instant case. The computation of differential duty at Table-I of the purp....
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....of the appellant's imports in tune with Section 14(1) of the Customs Act read with Rule 3 of CVR, which he failed to do. (iv) All demands for differential duty, interest, redemption fine and penalties are ab-initio unsustainable. 12.1. In view of the aforesaid submissions, the Ld. Counsel for the appellants prayed that the impugned demands against the appellants be set aside, with consequential reliefs. 13. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings recorded in the impugned order and submitted that the investigation had unearthed a systematic and widespread modus operandi adopted by a cartel of importers for undervaluation of imported Slack Wax and Residue Wax through suppression of the actual transaction value. It was contended that the Department's case is founded upon extensive documentary evidence recovered during searches conducted at various premises, statements recorded under Section 108 of the Customs Act, 1962 from several persons connected with the transactions, contemporaneous import data, published international price data of M/s. Petrosilicon depicting prevailing FOB prices of Slack Wax and Residue Wax....
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..... and M/s. Grand Dignity Industrial Co. Ltd., Taiwan, through Kolkata and Haldia Ports. The Revenue entertained the belief that the transaction values declared by the appellant did not represent the true transaction values and, on such premise, initiated the present proceedings culminating in the impugned order. 17. Having considered the records in detail, we find that the investigation admittedly commenced as a commodity-specific investigation into the alleged under-valuation of imports of Slack Wax and Residue Wax by several importers across the country. The present case pertains solely to imports of 'Slack Wax'. During the course of such investigation, searches were conducted at the premises of several importers and other entities including M/s. Abhisek India, M/s. Kavya International and other entities believed to be involved in under-invoicing and under-valuation of similar imports, from where certain documents, parallel invoices, proforma invoices, e-mail communications, payment records and other materials were recovered, which is the edifice on which the Revenue's case rests. However, a careful examination of the relied upon documents placed on record reveals that none of....
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....oicing upon the appellant. 17.2. Furthermore, it is revealed from the records that during the course of investigation, Shri Nand Kishore Chauhan, Director of the appellant-company, in his statement dated 15.02.2012 recorded under Section 108 of the Customs Act, inter alia, had categorically stated that M/s. Surabhi Enterprises Pvt. Ltd. had never made any payment, directly or indirectly, over and above the invoice value in respect of the imports under dispute, in any mode whatsoever. Significantly, this statement itself forms part of the relied upon documents accompanying the Show Cause Notice. Subsequently, when his further statement was recorded on 22.03.2013 and he was confronted with copies of statements and documents relating to investigations against other importers, including M/s. Abhisek India, M/s. Kavya International and others, Shri Nand Kishore Chauhan had clarified that such statements and documents did not pertain to the business affairs or import transactions of the present appellant. We find nothing on record to indicate that the Department was able to controvert these categorical assertions by producing any independent evidence demonstrating payment of considera....
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....es, 2007, lays down that the transaction value, namely, the price actually paid or payable for the goods when sold for export to India, constitutes the primary basis for determination of assessable value. Such declared transaction value can be rejected only upon the existence of cogent and tangible evidence satisfying the requirements of Rule 3(2) or Rule 12 of the said Rules. Mere suspicion arising from investigations conducted against other importers cannot, by itself, justify rejection of the appellant's declared transaction value in the absence of any direct evidence specifically connecting the appellant with the alleged undervaluation. No parallel invoices, clandestine payment records, hawala transactions, email correspondence, or any other incriminating material relatable to the appellant have been brought on record. The principle of res inter alios acta is significant in this case which states that evidence collected against third parties cannot automatically be relied upon against an independent importer unless a clear nexus or common design is first established. Valuation is necessarily specific to each transaction, and cannot be determined merely on the basis of alleg....
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....modities imported by the appellant were different from that declared before the customs authorities. Accordingly, the demand of customs duty was confirmed for the period from January, 2014 to April, 2017 on the importation of Varieties of Bags etc. on the ground of under valuation. The issue involved in these cases is mainly confined for determination, as to whether, the transaction values declared by the importer/appellant are correct or otherwise. The adjudicating authority observed that the evidence for the actual price was retrieved from the E-mails and invoices retrieved from E-mails. The authenticity of all the said Email printouts was admitted by partners of the appellant in their statements. On the other hand, the appellants disputed the veracity and authenticity of the evidences, collected through electronic devices. 7. In this context, we find that Section 138C of the Act, 1962 provides admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence. For the proper appreciation of the case, Section 138C of the Act, 1962 is reproduced below: .... 8. On reading of Section 138C of the Customs Act, 196....
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.... the electronic documents in the form of computer printouts from the seized laptops and other electronic devices, have not been accompanied by a certificate as required by Section 138C(2) ibid as above. In the absence of such certificate, in view of the unambiguous language in the judgment of the Hon'ble Supreme Court (supra), the said electronic documents cannot be relied upon by the Revenue for confirmation of differential duty on the appellant. In the present case, the main evidence on which, Revenue has sought to establish the case of undervaluation and misdeclaration of the imported goods is in the form of the computer printouts taken out from the laptops and other electronic devices in respect of which the requirement of Section 138C(2) ibid has not been satisfied. On this ground, the impugned order suffers from uncurable error and hence, is liable to be set aside. 11. The Learned AR for Revenue relied upon the decision of the Tribunal in the case of M/s. Laxmi Enterprises (supra), in which the Tribunal has upheld the charge of undervaluation and demand for differential duty. In the said decision, Tribunal overruled the objection of the appellant in connection wi....
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.... be the sole reason to confirm the charge of undervaluation. We also note that in the present matter there are no evidences produced by the department that the excess amount over and above the invoice price was paid to suppliers. There is no evidence as to how the Appellant came into possession of cash alleged to be differential amount towards goods imported, nor there is any evidence of any cash being handed over to any person, representing suppliers in India. Department had failed to produce corroborative evidences regarding the undervaluation of imported goods. Hence, in our view, the charge of undervaluation of imported goods in the present matter is not sustainable. 14. Further, we also find that in respect of disputed imported goods, Bills of entry were already been assessed at the time of importation of the goods and hence, further proposal to re-enhance the value, in the eventuality, when the earlier assessment orders having not been appealed against/reviewed, have attained finality and accordingly, cannot be proceeded with for rejection of the declared value. In other words, there cannot be any re-assessment of the said values, which had become final for want of a....
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....26-SC-CUS, wherein the Supreme Court again observed: "6. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports." 20. In Commissioner of Cus., Vishakhapatnam vs. Aggarwal Industries Ltd 2011 (272) E.L.T. 641 (S.C.), the Supreme Court analyzed the provisions of section 14(1) of the Customs Act and rule 4(2) of the 1988 Valuation Rules and observed that save and except for the circumstances indicated in section 14(1) of the Customs Act and particularized in subrule (2) of rule 4 of the 1988 Valuation Rules, the invoice price is the basis for determination of the transaction value. The Supreme Court also observed that before rejecting the transaction value declared by the importer as incorrect or unacceptable, the revenue has to bring on record cogent material to show that contemporaneous imports were at a higher price and for this rule 10A of the 1988 Valuation Rules would have to be resorted to. The relevant portions of the judgment of the Supreme Court are reproduced below: "11. On a plain reading of Sections 14(1) and 14(1A), it is clear that the value of any goods chargeable to ad valorem duty....
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....hich reliance is sought to be placed by the revenue. It is well settled that the onus to prove undervaluation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct. 12. In Eicher Tractors Ltd. (supra), relied upon by the Tribunal, this Court had held that the principle for valuation of imported goods is found in Section 14(1) of the Act which provides for the determination of the assessable value on the basis of the international sale price. Under the said Act, customs duty is chargeable on goods. According to Section 14(1), the assessment of duty is to be made on the value of the goods. The value may be fixed by the Central Government under Section 14(2). Where the value is not so fixed it has to be decided under Section 14(1). The value, according to Section 14(1), shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale, for delivery at the time and place and importation in the course of international trade. The word "ordin....
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....d to establish the source, authenticity, methodology or reliability of the said data, nor has the Revenue demonstrated that the prices reflected therein pertained to goods identical or similar in terms of origin, grade, quality, specifications, commercial level, quantity or other relevant parameters as the goods imported by the appellants. In the absence of such foundational evidence, the Petrosil data can, at best, constitute a general market indicator and cannot be accorded such high evidentiary value as to displace the declared transaction value or constitute the sole basis for redetermination of value under the Valuation Rules. 18.5.1. Even considering the Revenue's stand that M/s. Petrosil Group is a reputed industry reporting agency publishing market information relating to petroleum products, it goes without saying that such published trade prices or market indices cannot, by themselves, be equated with the actual transaction value agreed between a particular buyer and a particular seller in an international commercial transaction. Such publications merely reflect indicative market trends and cannot substitute genuine contractual prices unless supported by independent and....
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....tion of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s Sanjivini Non- Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared in the bill of entry." 19. We are therefore unable to discern any cogent, independent or legally admissible evidence brought on record by the Department establishing the appellant's involvement in the deliberate under-invoicing or suppression of the actual transaction value by the appellants in respect of the 52 Bills of Entry under consideration. The investigation undertaken by the Revenue undoubtedly unearthed certain incriminating materials in relation to other importers; however, no tangible material has been brought on record to establish any nexus whatsoever between the appellants and such alleged modus operandi. The entire edifice of the impugned proceedings, ....
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....g with the mandatory requirements of Section 138C of the Act. The Tribunal further found that no independent or importer-specific investigation had been undertaken against the concerned appellants and that the declared transaction value could not have been discarded under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 without adhering to the sequential scheme of valuation prescribed under the said Rules read with Section 14 of the Customs Act. It was also held that the enhancement of value was unsustainable in view of the contemporaneous NIDB data evidencing imports at prices comparable to those declared by the importers. We find that the aforesaid findings have a direct bearing on the controversy involved in the present appeals. The allegations of undervaluation herein also emanating from substantially similar investigations and evidentiary materials and involving identical questions such as the admissibility of evidence, absence of importer-specific investigation, rejection of transaction value under the Customs Valuation Rules and reliance upon contemporaneous valuation data, we are of the considered view that the ratio laid down in the c....
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.... orders in respect of the final assessments have attained finality. The Revenue has sought to distinguish the aforesaid Orders-in-Appeal dated 28.08.2019 by contending that the issue of under-valuation or under-invoicing investigated by the DRI did not fall for consideration therein and that the appellate authority had principally proceeded on the basis of the test reports. We are unable to subscribe to such a narrow construction. Further, while it may be true that the present proceedings arise from a separate show cause notice issued after finalisation of assessment and, therefore, the finality attained by the assessment proceedings may not, by itself, be determinative of the controversy before us, the same nevertheless constitutes a relevant and significant circumstance which cannot be ignored. The fact that the enhancement of value in respect of the very same Bills of Entry has already been disapproved in appellate proceedings undoubtedly lends further support to the appellants' case and reinforces the conclusion already arrived at by us on the principal issue. Therefore, although the above may not be the sole determinative factor, it nevertheless serves as an additional fac....