TaxTMI 
TaxTMI 
2026 (10) TMI 1695
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....are summarized herein below: 2.2 M/s Planet Worldwide Private Limited, Mumbai, inter alia is engaged in import of various types of mobile phone accessories and for such purpose have filed a Bill of Entry (B/E) No. 621558 dated 06.08.2009 through their authorised Customs Broker M/s Balraj Kumar. The imported goods in the above B/E was facilitated for customs clearance with 'no assessment & no examination' under Customs Risk Management System (RMS). However, the Central Intelligence Unit (CIU) of JNCH had developed an intelligence that the appellant importer company is importing unfinished/finished rechargeable mobile batteries in the guise of rechargeable cell for mobile phones, by mis-declaration of description and value of goods, with an intention to evade payment of customs duty. Therefore, the imported goods was examined by CIU, and on physical examination, it was identified that as against declared goods of 9,00,000 pieces of 'Rechargeable Cells' for mobile battery, the goods were actually found to be 8,91,200 pieces of 'unfinished mobile batteries' and 8800 pieces of 'unbranded finished mobile batteries'. Accordingly, the imported goods under live consignment in B/E No. 621....
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....uch confirmed demand. In respect of past imports similarly, he had demanded differential duty of 54,18,394/- along with interest under Section 28(1) ibid; besides the above, he imposed equal amount of duty as penalty on the appellants under Section 114A ibid for the past consignment Rs. 2,00,000/- under Section 112(a) ibid for the live consignment. Further, since the goods were mis-declared for the description and its value, the imported goods were confiscated for violation of Section 111(m) of the Customs Act, 1962 and he allowed the same on redemption fine of Rs.8,00,000/-. Feeling aggrieved with the impugned order of the learned Commissioner of Customs, the appellants have filed these appeals before the Tribunal. 3. Heard both sides and perused the records of the case. 4. The short issue for decision before the Tribunal is to determine the following: (i) whether the impugned order passed by the learned Commissioner of Customs, in confirmation of adjudged demands, in enhancing the value of import goods, is legally sustainable or not, in terms of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007? (ii) w....
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....ulated 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 values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value." Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 Definitions Rule 2. (1) In these rules, unless the context otherwise requires, - xxx xxx xxx xxx (c) "goods of the same class or kind", means imported goods that are within a group or range of imported goods produced by a particular industry or industrial sector and includes identical goods or similar goods; (d) "identical goods" means imported goods- (i) which are same in all respects, including physical characteristics, quality and reputat....
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....ods; (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 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar....
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....ion 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 : Provided that such transaction value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962. (2) The provisions of clauses (b) and (c) of sub-rule (1), sub-rule (2) and sub-rule (3), of rule 4 shall, mutatis mutandis, also apply in respect of similar goods. xxx xxx xxx xxx Rejection of declared value Rule 12 (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the val....
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....s 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 impugned order issued to the appellant-importer, the details of Bill(s) of Entry and the declared values as per NIDB data, from which the enhanced values were derived, was made known to the appellants-importer; whereas in terms of Rules of 2007, furnishing of such information shall be mandatory and first legal requirement for rejecting the transaction value and for proceeding further in determination of assessable value, as provided therein, when the customs authorities do not accept the transaction value. On the other hand, it is specifically recorded at paragraph 23 of impugned order, that "investigating officers had found from the NIDB data that unbranded mobile rechargeable batteries were being routinely assessed @ Rs.18/ per piece". 8. The relevant portion of the impugned order, providing the above details are extracted and given below: "22. The allegation in the show cause notice is that the importer had imported "unfinished/finished rechargeable mobile batteries" in the guise of....
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....iced that the invoices submitted by the importer at the time of assessment did not show the correct details of the goods and therefore these invoices did not represent the true transaction value of the goods. Hence, the declared value were correctly proposed to be rejected in terms of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (Customs Valuation Rules, 2007) in the SCN. As the value of these goods could not be determined under the provisions of sub-rule (1) of rule 3 of the said rules, consequently the value is required to be determined in terms rule 3(4) of the said rules by proceeding sequentially through rules 4 to 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. As there are two types of goods quantity, i.e. unbranded finished batteries and unfinished batteries which further processing/ finishing to be carried out on them before use, the redetermination of value of goods need to be done as per prescribed Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 23.1 In respect of 8,800 pieces of unbranded finished rechargeable mobile batteries imported vide Bill of Entry No. ....
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....finished batteries therefore could be re-determined at Rs. 14.40/- per piece. Therefore the total re-determined value of 8,91,200 pieces of unfinished batteries found in the consignment imported vide Bill of Entry No. 621558 dated 06.08.2009 would have come to Rs. 1,28,33,280/- & the duty thereon would be Rs. 31,34,015/-. Similarly, in case of total 21,44,000 piaces of unfinished rechargeable batteries for mobile phones cleared earlier vide bills of entry No. 803834 dated 04.03.09, 880710 dated 04.05.09, 880711 dated 04.05.09, 880713 dated 04.05.09 and 929999 dated 05.06.09, re-determined value comes to Rs. 3,08,73,600/- and duty thereon came to Rs. 75,39,642/- as against declared total assessable value of Rs. 87,04,048 and total duty paid as Rs. 21,21,248/-. 23.3 Therefore, the value of these batteries was correctly re-determined by the investigating officers under Rule 5 (for 8,800 pieces of "finished batteries") and under Rule 9 (for 8,91,200 pieces and for 21,44,000 pieces of unfinished batteries imported under Bills of Entry No. 621558 dated 06.08.2009, 803834 dated 04.03.09, 880710 dated 04.05.09, 880711 dated 04.05.09, 880713 dated 04.05.09 and 929999 dated 05.06.09....
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....into an agreement dated 03.03.2009 with M/s Zytel Industries Limited, Hong Kong for supply of 20,00,000 pieces of cells, at a price mutually decided by them, to be supplied over a period of a year. Such agreement under clause 3 also provide for the appellant company to examine the goods and if they are not according to the specification and description mentioned in the purchase order, then they are entitled to reject the same and inform the seller, for further disposal or destruction. The consignments imported are arising from such contractual arrangements made by the appellant company with the foreign supplier. Therefore, the discrepancies found by the department in the actual quantity of the goods, its nature could be commercially addressed by the appellant company, in case, if the same were to be returned to the supplier abroad or to be disposed or destroyed. Therefore, these cannot be construed as mis-declaration on the part of the appellants, without sufficient documents or any material evidence being produced by the department to bring about the specific ingredients of fraud, suppression of facts, willful mis-statement or any other violation of customs statute with an intenti....
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....rgument because there appears to be a fundamental mistake committed in the manner of implementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner. We did put this squarely to Learned Senior Counsel for the respondent, who really could not persuade us, or give a satisfactory answer as to why the concerned authority chose to ignore, in the given facts of the case, Rules 3 to 5, and did not proceed "sequentially"." 10.2 We also find that the decision of the Co-ordinate Benches of the Tribunal in the case of Shri Sushil Kumar Agarwal Vs. Commissioner of Customs (Export), Nhava Sheva in Final Order No. A/85177 -85183/2020 dated 10.02.2020; and in the case of Guru Rajendra Metalloys India Pvt. Ltd. Vs. Commissioner of Customs, Ahmedabad in Final Order No.1214612153/2024 dated 24.09.2024, also support our views, that arbitrary enhancement of value on the basis of circulars issued by Directorate General of Valuation or thumb rule rates being shown as 'prices adopted routinely in the Custom house on the basis of NIDB' is not sustainable f....
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....d every case on merits for deciding its validity and he cannot form a view to reject all transaction values on the basis of some general criteria based on DGOV Circular and on that basis load the value of imports uniformly across board. This Tribunal in the case of FSP (India) Pvt. Ltd. (cited supra) held that uniform loading based on general criteria is not permissible." 11.2. Further, the law is well settled in the case of Vardhaman Sales (supra), Ratan Aluminum (supra), Pushpak Metal Corpn. (supra) that the LME price cannot be adopted as the basis to enhance the declared price, in absence of any contemporaneous value of the imported goods being available on record. We also find that the issues involved in the present appeals have been adequately dealt with by the Ahmedabad Bench of this Tribunal, in the case of M/s Sunland Metal Recycling Industries, vide Final Order No. A/1187111874/2019 dated 01.10.2019, holding inter alia that applying the LME price minus discount band as per ISRI Bulletin or DGIV Circular dated 16.12.2005 cannot be the defensible ground for rejecting the declared value and for redetermination of the same, by taking recourse to the Valuation Rules, 1....