TaxTMI 
TaxTMI 
2026 (9) TMI 1224
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....ble batteries. For the purpose of importation of 28,000 pieces of rechargeable (sealed lead acid) battery of 6V 4.5 AH of 'Sunca' brand which are used for emergency Lantern, the appellant have filed a Bill of Entry (B/E) No. 6522131 dated 12.04.2012 through their authorised Customs Broker M/s Chunilal Clearing and Forwarding Private Limited. On the basis of invoice given by the overseas supplier M/s Ritz Resources (HK) Limited, Hong Kong, the appellant had declared the unit price of imported goods as USD 0.55 per piece in the B/E; however, as the Customs appraising group had enhanced the value of goods at USD 1 per piece, the appellant had accepted the same and paid import duty of Rs.4,20,204/-. 2.3 The Headquarters Intelligence Unit (HQIU) of R&I Division, Mumbai Customs (Preventive) Commissionerate had developed an intelligence that the appellant had imported certain goods by mis-declaration of description, it's value with an intention to evade payment of customs duty. Therefore, the imported goods was examined by HQIU, under Panchanama proceedings dated 17.04.2022. On such examination, it was found that imported goods in container No. FCIU 4037224 imported by the appellant is....
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....ted Goods) Rules, 2007 [herein after referred to as "CVR" for short], and redetermined the assessable value at under Rule 7 of the Rules of 2007 by enhancing the value of imported goods at Rs.23,30,272/-. The original authority had confirmed the differential duty payable Rs.2,52,122/- along with interest of Rs.3,834/-, besides the duty of Rs.4,20,204/- already paid by the appellant on 13.04.2012 at the time of filing B/E No. 6522131 dated 12.04.2012; and appropriated the amount of Rs.6,72,326/- towards duty (Rs.4,20,204/- paid on 13.04.2012 and Rs.2,52,122/- on 28.05.2012) and Rs.3,834/- towards interest, against such confirmed demand. Besides the above, he confiscated the import goods for violation of Section 111(d) and 111(m) ibid and imposed redemption fine of Rs. 2,00,000/- under Section 125 ibid. Further, he imposed equal amount of penalty on the appellant under Section 114A ibid Rs. 1,00,000/- under Section 112(a) ibid on the appellant and Rs. 50,000/- each under Sections 112(a) and 114AA ibid on the proprietor of the importer company. Being aggrieved with the said order of the original authority, the appellant importer filed an appeal before the Commissioner of Customs (Appe....
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....ne and penalty imposed in the impugned order is not sustainable. 3.3 In support of the their above stand, learned Consultant had relied upon the following case laws: (i) Century Mills Recycling Limited Vs. Union of India - 2019 (367) E.L.T. 3 (S.C.) (ii) Eicher Tractors Limited Vs. Commissioner of Customs. Mumbai - 2000 (122) E.L.T. 321 (S.C.) (iii) Lloyd Electric & Engineering v. Commissioner of Central Excise & S. Tax - 2018 (361) E.L.T. 1043 (Tri.-All) (iv) RSH Distribution (India) Private Limited Vs. Commissioner of Customs, New Delhi - 2007 (216) E.L.T. 560 (Tri. -Del.) (v) Vijaya International Impex Vs. Commissioner of Customs (Seaport- Import), Chennai - 2018 (359) E.L.T. 270 (Tri. -Chennai) (vi) Khushiram Beharilal Vs. Commissioner of Customs, New Delhi - 1997 (94) E.L.T. 129 (Tribunal) 4. Learned Authorized Representative appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that since the importer had voluntarily paid the differential duty along with interest and penalty, the upholding of confirmation of adjudged demands in the impugned order cannot be interfered w....
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.... handling charges to the extent and in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section; Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff va....
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....xport of these imported goods; (g) "transaction value" means the value referred to in sub-section (1) of section 14 of the Customs Act, 1962; Determination of the method of valuation Rule 3. (1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted : Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which- (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule....
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....uantities 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 10 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. Transaction value of similar goods Rule 5. (1) Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as the goods being valued : ....
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....5 per piece of rechargeable battery of Sunka brand. I find that the original authority has not brought on record the veracity of the data submitted by the appellant. However, the authorized representative of the appellant had already accepted the redetermined assessable value of the impugned goods, which was based on the market enquiry, in the statement Data 24.04.2012 recorded under Section 108 of the Customs Act, 1962. During the market inquiry, the authorized representative was also present along with the CHA and the investigating officers and he had himself submitted the costing structure of the price per piece arrived at. Hence, the authenticity of the data submitted by the appellant is nullified in view of the contradictory situation. 9. In view of the above, it is admitted that the impugned goods were initially undervalued with an intention to evade customs duty. I therefore, uphold the findings of the Adjudication authority in this regard...." 9.1 However, in reply to the SCN dated 16.11.2012, which was submitted by the appellant vide their letter dated 14.12.2012 to the original authority, they had not admitted the allegation of imported goods having been under....
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....s. 180/- per piece, which was used to calculate back the assessable value at Rs.82.40/- per piece CIF. The factual matrix of the case clearly points out that firstly the Customs appraising officers had enhanced assessable value on its own at USD 1 per piece and later the HQIU had conducted such market survey and further enhanced the value of imported goods. No where any document of contemporaneous data, or any other evidence suspecting the transaction value as incorrect were produced by the department; on the other hand, the appellant importer had specifically provided few B/Es in which similar goods have been cleared at other customs location viz., B/E No.5695882 dated 10.01.2012 having the description of goods as 'Rechargeable (sealed Lead Acid) battery 6 V 4.5 AH" of "Sunca" brand for emergency lantern'. Therefore, it clearly establishes that the basic requirement of Rule 12 of the Rules of 2007 for rejection of value declared by the appellants-importer, by intimating the basis or grounds for doubting the truth or accuracy of the declared value has not been fulfilled in the present case. This is so because, neither at the time of provisional release nor in the order of the origi....
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....mining the value under Rule 5 ibid on the basis of 'similar goods' i.e., export from the same country of exportation/country of origin; manufactured by the same person or different person in the same country of export; sale at the same commercial level and in substantially the same quantities as the goods being valued, are required to be established. However, we find that none of these aspects have been complied with by the authorities below in undertaking the revision in enhancing the assessable value under the Rules of 2007. However, despite no such NIDB data of similar goods available with the department, the customs officer find availability of such similar goods in the market, only during market inquiry conducted by the customs officer, in order to adopt the price of Rs. 180/- per piece. Therefore, we find that the impugned order confirming the adjudged demands on the basis of market inquiry price of Rs.180/- per piece does not stand the legal scrutiny in terms of the legal provisions under Section 14 of the Customs Act, 1962 read with the Rules 2, 3, 4, 5, 7, 12 of the Rules of 2007. 10.1 We find that our above views are also fortified by the observation of the Hon'ble Sup....
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....xplanation. (g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the 'reason to doubt' exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably ....
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....eciphered from the assessment/valuation order, whether misdescription or false declaration was apparent, etc. xxx xxx xxx xxx 24. Therefore, in the facts and circumstances of the present case, it has to be held that the adjudication order in original is flawed and contrary to law for it does not give cogent and good reason in terms of Section 14(1) and Rule 12 for rejection of the transaction value as declared in the bill of entry. The order in original is not in accordance with Section 14 and Rules 3 and 12 as the mandate of these provisions has been ignored. The Assistant Collector has rejected the transaction value as declared in the bill of entry which, as noticed above, is clearly and fundamentally erroneous besides being contradictory. In the aforesaid circumstances, we do not think that the order in assessment dated 7th April, 2017 can be sustained and upheld. It is set aside and quashed." 10.3 We further find that the decision of the Co-ordinate Bench of the Tribunal in the case of Khushiram Beharilal (supra) state that acceptance of enhanced value does not mean that the appellants had given up their right to challenge in appeal against such decision; a....