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2020 (3) TMI 925 - AT - CustomsMisdeclaration of imported goods - Bitumen - Country of Origin - It was alleged that the appellants misdeclared country of origin; GSEC (appellant) & Gulf Petrochem were related parties; appellants misdeclared value, to evade payment of Customs Duty and that Shri Anand Mathur, Shri Nikharv Hashmukh Shah, Shri S K Gowri Shankar and Shri Sachin Saxena abetted with GSEC Ltd. to undervalue the said goods - conduct of search and drawing of Panchnama have not been followed - cross-examination of Panch witnesses were not allowed - principles of natural justice. Procedures to the conduct of search and drawing of Panchnama - HELD THAT:- The electronic evidence discussed relied upon in the show-cause notice were not obtained as per the procedure laid down under Section 65B of Indian Evidence Act, 1872 or Section 138C of Customs Act, 1962, as rightly submitted by the counsel for the appellants. However, this being a case of tax evasion, it would be beneficial to examine the evidence contained in the emails and to see if the Department has established the case of undervaluation by reliable evidence. Valuation - rejection of transaction value - allegation is that the appellants and their overseas suppliers are related and therefore the transaction value declared requires to be rejected - HELD THAT:- The learned Commissioner has dealt the issue at length and came to the conclusion that the appellants and the overseas suppliers are not related. However, learned Commissioner sets out a case on the basis of the contents in the emails - the learned Commissioner has arrived at the conclusion that there was under valuation to the extent of USD 120 PMT. Learned Counsel submits that price shown at 625 USD PMT was an offer price; Shri Anand Mathur informed Gulf Petrochem, vide mail dated 9.5.11, that they did not agree to the price and the same was not commercially viable. She submits that as per prevailing practice 15-20% discount was given and they got 20% discount. Though Shri Rutul Shah in his statement dated 13.2.2012 stated that 625 USD was Proforma price and value declared to customs was USD 505; however he did not accept that there is undervaluation; Shri Nikharv Shah in his statement dated 16.2.2012 said he was unaware of difference of USD 120 in the transaction. Redetermination of the assessable value - HELD THAT:- There is no evidence placed to show that there has been a flow-back of money from the importer to the overseas suppliers. Under these circumstances, we find that the prices declared by the appellants need to be considered as assessable value. We find that in the absence of evidence to effect that there is no flow-back, declared prices cannot be rejected. Misdeclaration of country of origin - circular of RBI has been violated - HELD THAT:- On going through the records we find that at least in two instances, as observed in the OIO, COO was declared to be Iran. However, the OIO is silent on action, taken by the department in respect of those consignments, other than provisional assessment. The OIO is silent if any action, such as seizure or informing RBI etc, taken in respect of such consignments. The OIO doesn’t link the misdeclaration to the redetermination of value also. Therefore, the department, though established the misdeclaration, did not proceed further to discuss the consequences and penal action, thereby supporting the counsel’s contention that it has no bearing on the case. The department was well within its right to seize the goods for such misdeclaration and impose penalties under Section 112 of Customs Act, 1962, notwithstanding the fact that the appellants had nothing to gain financially by such an action as there was no differential duty involved. We find that mens rea is not an essential prerequisite for action under Section 111(m) and Section 112(a) of the Customs Act, 1962. Appeal allowed - decided in favor of appellant.
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