TaxTMI 
TaxTMI 
2026 (9) TMI 1048
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....12.2017 and thereafter Adjudication Authority as per Order-in-Original No. 04/2019-COMMR dated 24.07.2019 confirmed differential duty and also ordered confiscation of the goods. Appellant was allowed to redeem the goods on payment of redemption fine and penalty. Penalty was also imposed on others. Aggrieved by said order, Appellants filed appeals before this Tribunal and this Tribunal as per Final Order No. 20084-20087/2022 dated 03.03.2022 set aside the order and remanded the matter for de-novo adjudication with the following direction:- "On careful consideration of the submissions made by both sides and examining the show-cause notice as well as the adjudication order, we find that the finding portion of the adjudication order is verbatim to the allegation made in the show-cause notice and there is no clearcut finding given by the adjudicating authority with regard to the defence taken by the appellant during the course of adjudication. Moreover, cross examination of the persons whose statements were relied upon by the adjudicating authority in adjudication order as well as while issuing the show-cause notice have not been granted. In that circumstance, we hold that ther....
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....ustify re-determination of assessable value and consequential demand. In this regard, Learned Counsel submits that the above material, even as relied upon, neither constitutes independent primary corroboration of the allegation nor satisfies the applicable evidentiary safeguards and legal compliance required for reliance on such material as admissible evidence. 6. Learned Counsel further submits that the impugned order confirming differential duty is prima facie unsustainable, since Bill of Entries which were concluded are re-valued and differential duty confirmed, first without disturbing underlying assessment through statutory prescribed Rules, without challenging the Bill of Entries /assessment, which have attained finality at the time of import. As regards the cross examination as directed by this Tribunal, Learned Counsel submits that though the cross examination was allowed as directed, as per the impugned order it is evident that the order extract only limited set of questions and answers. In this regard, Learned Counsel draws our attention to the cross examination of each person. 7. As regards cross examination of Shri. Muhammed Haris, Managing Director conducted on 3....
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.... Sea Foods and M/s. United Fishmeal do not share or exchange any employees and they are independent entities. There is no evidence of any mutuality of interest brought on record by the department. The witness has stated that the statements made by him on 16.11.2015 were incorrect and coerced and he only signed it out of force. The witness stated that he requested that his statement be retracted and the same was rejected. 8. As regards Cross Examination of Shri. Riyaz Ahmed, Export Executive on 23.08.2023, Learned Counsel submits that from the cross examination /re-examination of Mr. Riyaz, it is disclosed that he is merely an Export Executive, who reports to the Directors. The statements bring out the aspect that he was never privy to all the business transactions and the negotiations of the business deals of the Company with the Companies mentioned in the show cause notice. He was not involved in the determination of the prices and as such, all statements made by him cannot be considered as admissible evidence. This aspect is of crucial import since the entire case of the department hinges on the purported admissions in statements all of which were coerced and hence the earlier....
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.... refunded towards the excess amount paid. Details of such return were furnished during the conduct of the first adjudication showing return of monies where there was short shipment. 10. Further as regards statement of K. Mohammed Althaf, Director, Learned Counsel submits that during cross examination, it is stated that the statements made by him on 16.11.2015 were incorrect and coerced and he only signed it out of force. The witness stated that he requested that his statement be retracted and the same was rejected. The crossexamination /re-examination of this witness run similar to the facts that have been determined from the two above mentioned witnesses. No credence can therefore be given to the earlier statements and sans the purported admissions in the statements the department has failed to make out a case as alleged in the show cause notice (SCN) and as a consequence the entire demand of duty, interest and penalty cannot be sustained. 11. As regards Cross Examination of Gangadhar V. Shetty, Former Manager of M/s. Ganesh Shipping Agency, Mangalore, on 13.09.2023, in cross-examination, the witness has mentioned that during import it is not mentioned whether the 'fish ....
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....ion. In respect of imports made from ICE Wind Trade L.P. England, the previous impugned order recorded that the invoice is undervalued. In this regard, the Appellant submits that the entire claim is on the basis of an unauthenticated email. There is no evidence to show that payment made to G.E international trading is related to this transaction. It is also submitted that the large sums of money paid in advance to get the benefit of rates and the quantity is a normal business practice and the same cannot be interpreted otherwise to substantiate false claims. In respect of imports made from CIBEL, Morocco, USD 3,06,000 was transferred to CIBEL for 900 MT but received only 288.05 MT. CIBEL has refunded INR 72,14,682 in two instalments on July 10, 2017, and July 13, 2017, through Canara Bank. Therefore, it is false to state that USD 3,06,000 was transferred to CIBEL for 300 MT. Further in respect of imports made from MTP Fish SARL through M/s Sarnico Holdings, the previous impugned order had recorded that the appellant has transferred a commission of USD 31,450 to M/s Sarnico Holdings and USD 51,285 to G.E International trading Ltd but has not declared the same. In this regard, the ap....
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....5) ELT 613 (T); ii. Kumar Trading Company Vs. CCE, 2008 (230) ELT 240 (All.); iii. Rawalwasia Ispat Udyog Ltd., Vs. CCE, 2005 (186) ELT 465 (T); 14. As regards the valuation based on the contemporaneous import, Learned Counsel submits that the Adjudication Authority has rejected determination under Rule 4 on the premise that there are "very few transactions". However, even assuming there were only "few" contemporaneous transactions, the impugned order does not disclose what those transactions were, does not examine them for comparability, and does not record any reasoned finding as to why those transactions cannot be relied upon. In other words, Rule 4 is dispensed with by a bare assertion, without the mandatory exercise of identifying and evaluating the available transactions. Further, the record itself acknowledges that prior purchases were for small quantities, and therefore pricing differed, this directly engages the statutory requirement of comparability rather than justifying a wholesale abandonment of Rule 4. The department also appears to have selectively relied upon "similar imports" for some entities while refusing a consistent, comparable analysis ge....
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....tion and as per which also the international price of 'fish meal' during the relevant time of import is available. Law is well settled that such unauthentic data from internet cannot be considered as admissible evidence. 18. Learned Counsel further submits that the finding in the impugned order is prima facie is in the absence of any money trail establishing payment of consideration over and above the declared invoice value. The Appellant's bank statements and remittance records reflect payments made through banking channels, which tally with the declared invoice values; further, wherever there was a short supply, the record shows refunds /adjustments through banking channels, which explain remittance figures and negate any inference of additional consideration. In such circumstances, the foundational premise of undervaluation, namely, that the Appellant paid a higher "actual price" and suppressed it-remains unproven. Learned Counsel submits that the present proceedings are penal in nature, carrying severe civil consequences, including confiscation /redemption to establish fine and penalties. Accordingly, the standard of proof and the burden lie squarely on the depar....
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....the present case, the subject goods were imported long ago, were cleared pursuant to assessed Bills of Entry, and have since been dealt with the ordinary course of business, including being consumed /sold. The goods are therefore not available for seizure, detention, or release at this stage. In such circumstances, the statutory "option to redeem" becomes illusory as there is no practical or legal basis to impose a redemption fine as a notional substitute for goods that are no longer capable of being redeemed. Consequently, the confiscation /redemption fine portion of the impugned order, being disconnected from the statutory purpose of Section 125 and operating only as a punitive addon, is liable to be set aside. 21. As regards Appeal No. C/20817/2024 filed by appellant Shri. Riyaz Ahmed, Accounts Assistant, Falcon Express Lane, Appeal No. C/21183/2025 filed by appellant Shri. K. Mohammed Altaf and Appeal No. C/21184/2025 filed by appellant Shri. K. Mohammed Haris, Learned Counsel submitted that impugned order imposes personal penalties on them based on the same alleged undervaluation narrative and the same statements /electronic records. There is no independent, legally admissi....
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....ative is not inconsistent with the contemporaneous factual record, including instances of cancellation /short shipment and refunds /adjustments through banking channels, which explain remittances and negate any inference of extra consideration. Further, key witnesses have retracted and /or qualified their earlier statements and clarified that the alleged higher consideration was never paid in the manner inferred by the Department. Further submits that cross-examination was the first effective and meaningful opportunity made available (pursuant to the remand) to confront the relied-upon statements and to elicit clarifications /retractions on record. In that context, the impugned order's characterisation of such retractions /clarifications as an "afterthought" is untenable: a retraction recorded at the first real opportunity post-remand cannot be dismissed merely because it occurs after the initial statement, especially when the remand itself was anchored in permitting cross-examination. As regards admissibility of the document relied by Adjudication authority, Learned Counsel relied on the following decisions:- i. K. M. Nanavati Vs. St of Maharastra, AIR 1962 SC 605 ....
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....f the products in India the same cannot be considered for deciding the imported product as finished or semi-finished. • the semi-finished fishmeal was raw type product i.e. presence of scales and bones with rough texture but finished fish meal was fine powder with smooth texture and after processing imported fish meal, weight of the subject product was reduced to 7% to 10%. 35.2. On perusal of the specification of BIS No. IS: 4307-1983, it ensures that fishmeal as livestock feed ingredient shall be obtained from fresh fish /fish waste /unsalted dried fish, eliminating poisonous fishes. The fish meal shall be prepared by cooking the raw material or by heat treating the dried fish, pressing the cooked mass, drying and pulverizing the treated material to required mesh size. Fish meal in the form of powder ground to such fineness that 99% of material shall pass through 2-80 mm IS Sieve. Thus, it is very clear that the method of BIS standards specification would help in promoting the process and use of fish meal of uniform quality. In view of the above discussions, I agree with the argument of the noticee that that BIS specification was nothing to do in deciding th....
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....t vide letter F. No. 26-Cus/C-82/2021-22 dated 02.06.2022 has stated that the subject imported fish meal meets the specification for fish meal as livestock feed ingredient as per 15: 4307-1983, but not indicated with respect to Grade 1 BIS specification, as contended in the notice. 37.1. Coming to another issue of Advance Authorisation (AA), it was made available as a duty exemption scheme under Chapter IV of the Foreign Trade Policy 2015-20 (FTP). Advance Authorisation licence is issued to a manufacturer /merchant exporter having past export performance in at least two preceding financial years. In the instant case, having fulfilled the conditions prescribed in Para 4.07 of the FTP, the benefit of duty free import of the item was available against advance authorisation subject to the specific condition that the material imported before fulfilment of export obligation are required to be used in the manufacture of export products after allowing normal wastage and physical incorporation of such materials in the export products is mandatory under the provisions of FTP. I find that the advance authorisation vide No. 0711001292 dated 10.06.2021 issued by the DGFT, Bengaluru, wi....
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....umption)" and mentioned the advance authorisation details at part IV (B) of the shipping bills:- Sl. no Shipping Bill No. /date Invoice No./date Qty. (MT S) Rate Value (F/C) (USD) FOB (Rs.) Advance Authorisation Licence No. Import Qty. (MTS) 1 6040684/ 20.11.2021 E-020 17.11.2021 500 1265 632500 4,47,28,125 0711001292 / 10.06.2021 520 2 6226792/ 24.11.2021 E-027C 9.11.2021 200 1375 275000 1,94,87,700 0711001292 / 10.06.2021 208 3 8135074/ 10.02.2022 E-053 17.11.2021 100 1395 139500 1,00,37,478 0711001292 / 10.06.2021 104 37.4. In view of the above discussions, it is a fact that export obligation has been fulfilled by the noticee in respect of the goods imported under subject bills of entry and the advance authorisation licence under FTP Scheme, as 'fish meal (semi finished)' imported has been exported as 'finished fish meal' after the process. I also observed that when compared to export and import, the weight of fish meal was reduced on an average of 4% per Metric Ton (approx.). Therefore, I find tha....
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....International Vs. UOI, 2019 (370) ELT 116 (P& H) ii. ITC Ltd., Vs. CCE, 2019 (368) ELT 216 (SC) iii. Priya Blue Industries Ltd. Vs. CC, 2004. (172) ELT 145 (SC) iv. CCE Vs lock (India) Pvt. Ltd., 2000 (120) (ELT) v. Escorts Limited Vs. UOI, 1998 (97) ELT 211 (SC). vi. National Thermal Power Co. Ltd. Vs. CIT, 1998 (99) ELT 200 (SC) vii. J&K Cigarettes Ltd. Vs. CCE, 2009 (242) ELT 189 (Del) V/S UOI viii. Ambika International Vs. UOI, 2018 (361) ELT 90 (P&H). ix. CCE Vs. Blue Star, 1999 (106) ELT A 189 (SC) & 1996 81) ELT 287 (T) x. Eicher Tractors Ltd. Vs. CC, 2000 (122) ELT 321 (SC) xi. Sree Rajendra Textiles Vs. CC, 2006 (206) ELT 83 (Mad.) xii. CC Vs. Initiating Explosives Systems (I) Ltd. 2008 (224) ELT 343 (SC) xiii. CC Vs. Telebrands (I) Manufacturing & Assembling Industries Pvt. Ltd., 2002 (143) ELT A 85 (SC) & Telebrands (I) Manufacturing & Assembly Industries Pvt. Ltd. Vs.CC, 2001 (138) ELT 745 (T-Mum) xiv. CC Vs. Bureau Veritas, 2005 (181) ELT 3 (SC) xv. CC Vs. Balkrishan Dass & Sons & Vice versa, 2001 (133) ELT A 164 (SC) & 2001 (129) ELT 706 (T-del....
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....o compliant in this regard was received and hence the evidence available and the statements stand in the confirmation of the duties and imposition of penalties. g. The involvement of payments through hawala channels and adjustments of the differential values not declared to customs by way of domestic purchases, freight payments, commissions etc., have been proved and not denied by the appellants. h. The values have been re-determined in case of each import and adjudicating authority has clearly explained the basis of re-determination in Para 36.1.1 to Para 36.8.1 of the impugned order. i. The Customs brokers after verifying the evidence obtained by the department, have admitted the undervaluation and also stated that the relationship between the appellants and M/s. United Fish Meal (being related party) was neither communicated to them nor to the customs at the time of importation. No question was asked during cross examination in this regard by the appellants which confirms the undervaluation. Also, the said Statements are not retracted and they stand. j. The Values adopted have been taken by the documents available with the importers and agreed....
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....ing rules, the value of the imported goods Fish meal has to be determined using reasonable means consistent with the principles and general provisions of these rules, the assessable value of the imported goods Fish meal is to be re-determined in the present case by applying Rule 9 of the Customs Rules, 2007. Since appellant have submitted Proforma invoice No. UGGT/050 dated 12.11.2014 to the bank for transfer of amount of USD 1,35,000 @ USD 1350 per MT and this value is to be treated as the actual value of the imported goods. Further, this invoice indicated that the goods are apparently sold on C&F i.e., Cost and Freight basis and Insurance cost is to be borne by the buyer. Now, as per Rule 10(2) of Customs Valuation Rules, 2007, insurance is to be taken at 1.125% of the invoice value and on top of it 1% handling charges are to be added to arrive at the assessable value of the imported goods. In this regard, Learned AR reliance on the decision of the Hon'ble CESTAT, New Delhi in the case of M/s. Photodeal Vs. Commissioner of Customs, Chennai reported in 2004 (170) E.L.T. 104 (Tri. Del) wherein it was held that the invoice value as well as the declared value of the imported good....
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....3.2016 Appellant expressly recorded that "documents pertaining to the imported fish meal and the batchwise records / in-house lab test records are now in your custody." In the same communication, the Appellant also stated that the Mahazar drawn by DRI had not been provided and that, without copies of the Mahazar and statements, it was difficult to compile a complete response. This is significant because the impugned order proceeds to draw adverse inferences on "non-production" of lab material, whereas the record shows the Appellant contemporaneously asserting that the very records were in the Department's custody and that the Department had not furnished copies of the seizure record. Further vide letter dated 03.05.2016 addressed to the Senior Intelligence Officer, DRI Regional Unit, appellant submitted that the lab report could be extracted only from the lab register, and that the lab register book was in DRI custody and requested at least a photocopy of the same. Further by referring to previous letters, another letter dated 14.09.2016 was also forwarded seeking copies of the lab report. Thus, the request for lab register copies was made contemporaneously in the investigation....