TaxTMI 
TaxTMI 
2026 (8) TMI 429
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....INDOC 2. Officers of the Directorate of Revenue Intelligence conducted searches at the premises of the appellant as well as N K Impex (buyer of imported Dry Dates) on 18.03.2020;59650 Kgs of Dry Dates, imported vide Bill of Entry No. 6596563 dated 23.01.2020, were detained; examination of import documents revealed that the requisite Phytosanitary Certificate, issued by exporting country i.e. Saudi Arabia, was not submitted for clearance, in contravention to the provisions of Para 10 (2) of the Chapter III of Plant & Quarantine (regulation of Import Into India) Order 2003.A Show Cause Notice dated 30.06.2021was issued proposing absolute confiscation of the imported goods and for imposing penalty under Section 112 (a) (i) of the Customs Act,1962, 1962. 2.1. Further enquiries revealed that the Appellant had imported 3 consignments of Dry Dates vide 3 BE Nos. 6387411 Dated 07.01.2020, 6506996 Dated 17.01.2020 and 6596563 Dated 23.01.2020 and in all the cases required Phytosanitary Certificate was not produced. On a request made by the appellant, dry dates imported, vide Bills of Entries Nos. 6387411 Dated 07.01.2020, 6506996 Dated 17.01.2020, were allowed to be released, on payme....
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....2.2020 53025 Do 3.1. Searches were conducted on 18/19.03.2020 at the premises of the Appellant; on the basis of investigation and overseas enquiries department formed an opinion that the goods were of Pakistan origin, allegedly routed via Dubai and falsely declared as of Saudi origin to evade payment of customs duty @200%; two show cause notices, both dated 28.01.2022, were issued proposing to confiscate the goods; confirm differential duty and impose penalties. The proceedings culminated by the impugned order in Original, dated 07.05.2024, confirming the proposals in the show cause notices. 4. Shri Sourabh Kapoor, learned Counsel for M/s Findoc and Shri Vaneet Gupta contested the impugned orders. Gist of his arguments/submissions are as under. * Bill of Entry No. 6596563, dated 23.01.2020, was referred to SIIB Ludhiana for verification; on enquiry it was concluded that the Origin of "Dry Dates" was Saudi Arabia. * the authenticity of the documents, on the basis of which the impugned order concludes that the goods are of Pakistani origin, is questionable; documents alleged to have been obtained from Overseas Enquiry, do not indicate that the same have ....
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....ct, 1872 has been produced to make these electronic records admissible; the Appellant was never confronted with these documents during investigation. * mandatory procedure laid down in Rule 6 of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 for verification of Certificate of Origin, was not followed. * Burden of proof regarding country of origin to be from Pakistan is not discharged. * adjudicating authority has referred to alleged email correspondence between Today Global Forwarders (India) and Dubai based freight forwarders discussing "rate requests" for consignments from Karachi via Jebel Ali and issues of Phytosanitary and origin certificates; these alleged emails were, at best, recovered from a third party; the said emails were not sent by the Appellant; supplier in the present case is different and period is also different; therefore, no inference can be drawn from said alleged emails; interestingly, the same have not been relied upon in the show cause notices. 6. Learned Counsels for the appellants rely on the following cases in defense of their arguments. * Agarwal Metals & Alloys Vs Commissioner of....
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....y the orders passed by the Hon'ble Supreme Court; appellant's reliance upon CBIC Circular No. 157/13/2021-GST dated 20.07.2021 is misconceived; in any event, the present case being one of willful misstatement, suppression and fraud, the extended period under Section 28(4) of the Customs Act, 1962 is invocable. He submits that reliance on G.S. Chatha Rice Mills, 2020 (374) ELT 289 (SC), for classification, is wholly misplaced; the issue before the Hon'ble Supreme Court pertained to the point of time at which a Bill of Entry could be treated as filed and not about classification. 8. Learned Authorised Representative submits that the objection on the authenticity and admissibility of the Transshipment Import Declaration documents obtained from the Federal Customs Authority, UAE, is entirely meritless; the records shows that the documents were procured through official channels from the customs authority of a sovereign foreign jurisdiction under a covering letter; such documents cannot be equated with unauthenticated photocopies obtained from private parties; commissioner correctly relied on Chandra Impex Pvt Ltd 2008 (224) ELT 583 (Tri.-Del.); the cases, of Bussa Overseas & Propert....
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.... India Ltd 2018 (9) GSTL 142 (Mad.). he also relies on V.K. Mohammad Ali v. Commissioner of Customs, Cochin, 2019 (369) ELT 1538 (Tri. -Bang.). He also submits that issuance of two Show Cause Notices issued in relation to Bill of Entry No. 6596563 dated 23.01.2020 does not suffer from any legal infirmity; one was for confiscation and the other was for recovery of duty evaded; both were adjudicated together by a common order. The notices thus operated in different though related fields and the objection raised by the Appellant is merely technical. 12. Learned Authorised Representative submits that absolute confiscation of 59.650 MTs is fully justified; these are food articles are imported in violation of plant quarantine requirements and on the basis of a false declaration of country of origin; the adjudicating authority was fully justified in treating the goods as prohibited for the purpose of Section 125; the discretion exercised is neither arbitrary nor excessive, but is rooted in the concerns of bio-security, public health and deliberate customs fraud. He submits that penalties, under Sections 112(a)(i), 114A and 114AA, have been correctly invoked; the material on record esta....
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....nt pattern and quantity particulars all match, a minor numerical variation cannot destroy the continuity of the evidentiary chain. * seal numbers appearing in the transshipment documents correspond to those reflected in the Bills of Lading filed before Indian Customs; the consignee is the Appellant; the quantities tally; the routing pattern is consistent; and the entire trail points unerringly to Karachi as the place from where the goods commenced their journey. * emails recovered during search proceedings, from the premises of M/s Today Logistics, the Customs Broker of the Appellant, and M/s Today Global Forwarders (India), functioning from the same address, corroborate to establish knowledge, participation and intent behind the routing of consignments from Karachi via Jebel Ali; * Invoking principles relating to inadmissibility of electronic evidence under Section 138C of the Customs Act and Section 65B of the Evidence Act is untenable; the transshipment declarations relied upon herein are not in the nature of printouts taken from a device seized from the Appellant or any private third party in India; reliance on Agarvanshi Aluminum Ltd 2014 (299) ELT 8....
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....laced on record or supplied to the Appellant; documents alleged to have been obtained from Overseas Enquiry, do not indicate that the same have been filed at DUBAI; the documents do not bear any marking of UAE Customs; the documents have not been certified by the Customs Office Overseas; documents do not bear signatures of any of the Officer of Federal Customs Authority UAE; the documents allegedly obtained from Federal Customs, Dubai are unsigned, unstamped from undisclosed sources and hence, are bot reliable. * documents on the basis of which it was concluded that goods are of Pakistan origin mention that the goods were for transit to Iran; though the Container Numbers declared to Customs Dubai tally, no seal numbers are mentioned; seal Numbers as mentioned in documents claimed to have been filed in Dubai are different from one found on documents in India; * Request for supply of the copies of the correspondence, vide which data was received through overseas customs enquiry, was not acceded to; copy of the statement of the representative of Shipping Company also not supplied though relied upon. * in the absence of proper authentication of documents obta....
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....shipment documents have only 10 numbers in respect of all the bills of entry, but, the Bill of Lading for import into India provide 11 digit Container numbers; further, the Bill of Entry Filed at Dubai Customs, do not mention Seal Nos. They submit further that these documents do not contain any endorsement/stamp/seal of Customs Dubai; thus, the authenticity of the documents is in question; copy of the forwarding letter claimed to have been sent by COIN Dubai, was also not supplied to the appellants. 17. We find that the argument of the learned commissioner, in the impugned orders is that the appellant failed to produce any material to discredit the authenticity of the documents; when the transshipment reference particulars, Bills of Lading, seal numbers, consignee details, shipment pattern and quantity particulars all match, a minor numerical variation cannot destroy the continuity of the evidentiary chain; emails recovered during search proceedings, from the premises of M/s Today Logistics, the Customs Broker of the Appellant, and M/s Today Global Forwarders (India), functioning from the same address, corroborate to establish knowledge, participation and intent behind the routi....
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.... a cause of inquiry by the concerned foreign authority, and that revenue is not permitted to re-agitate the issue of classification and misdeclaration of the value based on such a report. 20. We also find that the information forwarded by foreign customs authorities has been evaluated by Indian Courts by setting strict procedural safeguards before they can be admitted into evidence. In the case of South India Television (P) Ltd [2007 (7) TMI 9 Supreme Court], Hon'ble Supreme Court observed that the revenue cannot sustain an enhancement of assessable value solely by placing reliance on uncertified photocopies of export declarations obtained from foreign custom jurisdictions. The Apex Court held that casting suspicion on the invoice produced by the importer is not sufficient to reject it as evidence of the value of imported goods, mandating that if the department relies on a declaration made in the exporting country, it has to show how such a declaration was procured. The court clarified that before rejecting the invoice price, the department must find out whether there are any imports of identical goods or similar goods at a higher price at around the same time, and if the charge....
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.... of an official report from the Hong Kong Customs. The tribunal observed that the foreign authority had conducted a detailed inquiry into the depth of the transaction, reporting that the foreign supplier issued false invoices for customs clearance purposes and genuine invoices for the collection of payments. The tribunal was convinced that the values reported by the foreign customs authorities constituted the correct transaction values of the goods under import, and therefore was reliable evidence to justify the rejection of the declared value, even in the absence of live goods. In Craft Studio [2003 (7) TMI 239 - CESTAT New Delhi], the customs authorities enhanced the value of imported goods based on enquiries made with the Hong Kong Customs Department. The tribunal noted that the investigations by the foreign authorities clearly brought out the modus operandi adopted by the appellant and its supplier to un-declare the price in invoices for evasion of customs duty. 23. Thus, we find that whether COIN /foreign intelligence reports can be used as reliable evidence depends entirely on the strength of their facts and how well they are corroborated. Courts and tribunals follow the p....
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....ry was filed by the Shipping Agent M/s. Manchester Shipping LLC. Further, against goods details, description 'Dried Dates' is given and Country of Origin is 'Pakistan'. iv From Images-2 to 7 supra, against the Transshipment Bill of Entry, the Transshipment Export reference documents bearing no. ST 126979, ST 126977. ST_126976, ST_127082, ST 126980, ST 127081all dated 31.12.2019 covering containers No. GESU679555, GESU560474, CAXU929497, CAXU913315. CAIU810320, BLJU425084 sealed with Seal No. MP0244320, MP0238305, MPO241222, MPO248405, MP0238137 & MP0241324 respectively, it is evident that these were filed for the dry dates shipped to India. The Bill of Lading No. JEA/LUH/19/23165 dated 3.1.2020 was thereafter filled by M/s. Avana Global FZE from the said Bill of Lading it is evident that 3120 bags of dry dates having gross weight 1,56,312 Kgs, stuffed in containers No. BLJU4250840, CAIU8103202, CAXU9133158, CAXU9294975, GESU5607449 & GESU6795552, were shipped in the vessel X PRESS GUERNSEY/ 20001 from the port of Loading Jebel All' to port of Discharge 'Mundra' with final destination Ludhiana' and the consignee as 'Findoc Impex&....
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....on' the same has been mentioned as 'India'. This clearly shows that the consignment is meant for 'India' only. I further, observe that mere mentioning the 'Cargo Transit Into IRAN' under the House Bill No. entries, is to manipulate the document so as to hoodwink the apparent tracking of the consignment and points towards the fraud which has been committed by the Noticees along with their C&F agents to create and illusion that the consignment has been stuffed Saudi Arabi when all other documents discussed by me supra point towards the unquestionable fact that the consignment has originated from 'Pakistan' only. From the Chart figuring at Table No.2 to the show cause notice dated 16.11.2021, it is evident that this modus operandi of mentioning the wrong Container numbers in the Transshipment Bill of Entry and the mention of 'CARGO TRANSIT INTO IRAN' is to commit fraud in a very planned manner to evade appropriate payment of duties of Customs. It may be pertinent to mention here that in the remaining two Transshipment Bills of Entry it is clearly mentioned 'CARGO TRANSIT INTO INDIA' Thus, this plea of the Noticees is of no use to the....
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....tally; the routing pattern is consistent; and the entire trail points unerringly to Karachi as the place from where the goods commenced their journey. * emails recovered during search proceedings, from the premises of M/s Today Logistics, the Customs Broker of the Appellant, and M/s Today Global Forwarders (India), functioning from the same address, corroborate to establish knowledge, participation and intent behind the routing of consignments from Karachi via Jebel Ali; 28. We find that the Tribunal has discussed the issue relating to the admissibility of evidence obtained from the Customs Overseas Intelligence Network (COIN). We find that Tribunal and Courts have been holding that unauthenticated documents cannot be relied upon and that the documents must be obtained following due procedure. Tribunal held in the case of Agarwal Metals and Alloys 2021(378) ELT 155 (Tri-Ahm) 11.8 In respect of report given by First Secretary (Trade), Embassy of India, Brussels is concerned we are of the view that the adjudicating authority has wrongly placed reliance on the same. We are in agreement with submission of Appellant that the invoices and supporting documents with th....
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....nything wrong in relying upon them. Further, the provisions under the Act of 1948 especially Section 3(2) does not require every document to be attested. From the perusal of the record and the statements made during the Investigation, It appears to us that the fax messages cannot be brushed aside lightly mainly since their exchange was never contested by the appellants. The argument that the fax messages cannot be relied upon as they do not bear any signature does not, in our opinion, hold water. 30. It was held in Deepak Enterprises Vs Commissioner of Customs Kolkata 2003 (159) ELT 851 that photocopies of documents which are unsigned and unauthenticated cannot be relied upon as evidence and no charge of under-valuation can be sustained on the basis of such evidence. The ratio of the following decisions binds us to conclude that no material exists to accept the values as proposed in the notice. Hon'ble High Court of Punjab and Haryana held in the case of Commissioner of Customs Vs Kalsi Machinery Co P Ltd. 2015 (325) ELT 572 (P & H) that The Commissioner of Customs has filed the instant appeal against the view taken by the Customs Excise and Service Tax Appellate Tribun....
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....ed by the Hong Kong Customs and forwarded to the Commission for India in Hong Kong which in turn has forwarded them to India; will not make them genuine documents. This was so held by the Tribunal in the case of Indian Optics Pvt. Ltd. v. Commissioner of Customs, New Delhi reported in 2000 (123) E.L.T. 1022 (Tri.) = 2000 (39) RLT 381 (CEGAT) 32. It was held in Truwoods P Ltd 2005 (186) ELT 135 (Tri-Del) that 9. The Tribunal in South India Television case has also found force in the Appellants' submission that there is a possibility of the export declaration price being on the higher in order to claim higher export incentive and in such circumstances, the transaction value has to be accepted. Shri Sanjeev Agarwal, Chief Executive of the appellant Company, has clearly deposed in his statement dated 16-5-2001 that there might be a possibility of some kind of export/Import benefits or adjustment in taxation in those countries. The Revenue also does not seem to have checked up the genuineness of the manufacturers' Invoice from the Customs/Revenue Authorities of the respective countries or from the manufacturers themselves. No basis has been mentioned in the Report re....
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....e decisions relied upon by the learned Senior Departmental Representative are not applicable to the facts of the present matters. We, therefore, set aside all the impugned orders and allow all the appeals with consequential relief, if any. 32.1. Apex Court affirmed the above decision Truwoods Pvt Ltd 2016 (331) ELT 15 (S.C.) 4. It would be pertinent to observe that in support of its case, the Revenue had produced certain documents purported to have been issued by Italian customs authorities as per which the price of these very goods was shown higher by the manufacturer of these goods through whom the goods were purchased by M/s. Pargan Singapore for sale to the assessee. The assessee had challenged the admissibility of these documents in evidence on the ground that they are not authenticated. This argument has been accepted by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT'). CESTAT has found that the documents procured by the Revenue do not bear any signatures and are photocopies which are not even attested and accordingly, the assessable value could not be enhanced on the basis of such documents. In arriving at this ....
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....gh in this case, there is no mention of any pending verification, regarding the country-of-origin certificate, the ratio is applicable to the facts of the present case as there is no mention of any verification regarding the country of origin and the certificates submitted by the appellant were rejected without causing any overseas verification or enquiry regarding the country of origin and phytosanitary certificates. Allahabad Bench held in the above case that The Adjudicating authorities straightway rejected the Country of Origin without even taking note of the evidences in available on the record in form of Phyto Sanitary Certificate and Fumigation Certificate. If the certificate was to be rejected the same should have been done in consultation with the Certificate issuing authority. Thus, the Custom Authorities under Custom Act, 1962, have no jurisdiction to challenge the documents issued by the Government Authorities of the other Country as has been held in the following cases: * Pradip Polyfils Pvt. Ltd. [2001(173) E.L.T. 3 (BOM.)] * Khanna Paper Mills Ltd. [2011(273) E.L.T 149 (Trib.-Del.)] * S. Chandra Sekhran [2011 (132) E.L.T 751 (Trib-....
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....had not been followed to verify the correctness of the certificate of origin, it would have to be held that the goods were of UAE origin. The relevant observations are as follows "Nothing has been placed on record by which it can be said any verification request has been made by the custom authorities with concerned authorities in UAE to verify the genuineness and correctness of the Certificate of Origin issued by them. In view of the above concrete proofs regarding country of origin, we hold that said goods were of UAE origin. We find that in the case of Challissari Kirana Merchant (supra), the Hon'ble Kerala High Court has held that for determination of country-of-origin due weightage should be given on the country-of-origin certificate in case of any suspicion. In the case of Yellamma Da Sappa vs. Commissioner of Customs, Bangalore [2000 (120) E.L.T. 67 (Kar.)], the Hon'ble Karnataka High Court has observed as follows: "9. A valid certificate has been issued and the said certificate, even as on date, has not been withdrawn or cancelled for any alleged violation of the condition by the appellant. Unless the said certificate is cancelled, the Customs Authorities ....
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....s, as the documents are neither authenticated by the overseas customs authority nor do they bear stamps and seals of such authorities, the evidentiary value of such documents is lost. We also take note of the fact that the manner of obtaining/procuring such documents is also not explained satisfactorily. 38. In view of the above, we find that whether COIN /foreign intelligence reports can be used as reliable evidence depends entirely on the strength of their facts and how well they are corroborated. Courts and tribunals follow the principle that raw, unverified intelligence or unauthenticated photocopies are not enough to reject a declared transaction value. Without solid supporting evidence, these reports are treated merely as a starting point for an investigation, not as final proof of a violation. However, when foreign authorities provide a specific, verified investigative report, backed by strong, independent facts and completely corroborated, the evidence becomes reliable and admissible. Further, we find that that other than a print out from the website of dpwdt.dubaitrade.ae/ Export, discussed above, revenue could not produce any evidence. There too as discussed above, the....
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....f the issue of Country of Origin is considered. However, the allegation of misdeclaration was not established by credible, authentic evidence, as discussed above. However, the logic cannot be extended to the issue of Phytosanitary certificates. Having cleared the goods after due examination and after satisfying themselves as to whether the conditions which are required to be met for clearance of such goods, it is not open for the revenue to propose the confiscation of goods which have been imported and cleared by the authorities for home consumption. Moreover, such goods seize to be imported goods as per section 2(f) of the Customs Act, 1962. 42. However, it is not the same case with reference to goods which were seized for contravention of Plant & Quarantine (regulation of Import into India) Order 2003. As the phytosanitary certificates were not produced, the goods cannot be released to the appellant-importers. We are of the considered opinion that such goods are liable to be confiscated. The impugned orders require to be upheld to the extent of confiscation of seized goods. However, the redemption fine/penalty on this count needs to be imposed looking into the facts of the cas....