Valuation of imported consignments - Linen Yarn, Ramie Yarn and other misc. items from various overseas suppliers, based in China - rejection of declared value - redetermination of the rejected value - retraction of relied statements - Section 28 of Customs Act,1962 - HELD THAT:- The requirements of Section 17 ibid have not been complied with diligently by the Customs department inasmuch as the value declared by the importer at the stage of self-assessment was not disputed, the payments made towards the duty liability was accepted and that the disputed goods were also cleared for the intended purpose. These facts are evidenced for the findings recorded in the impugned order at paragraphs 5.9, 6.1(ii) and (iv) - it can be concluded that in absence of non-compliance of the provisions contained in Section 17 ibid, more particularly, sub-section (5) therein, the assessments cannot be considered as complete or final.
The provisions with regard to search of premises are contained in Section 105 ibid. It has been mandated that the provisions of Code of Criminal Procedure, 1898 relating to searches shall, as the case may be, apply to searches conducted under the Customs Act, 1962. The basic purpose and objective of drawing Panchanama has been made clear in Section 100(4) in the said code. As per the statutory mandates and the law laid down by the judicial forums, the purpose for drawing the Panchanama is to conveyance the court that the officer-in-charge has in fact carried out the investigation, search or seizure, if any, and have acted upon the directions of the court and guard the case from unfair dealings on the part of the officers - it is apparent that the manner of drawing a Panchanama prescribed in the statute has not been scrupulous followed by the Department. It is also an admitted fact on record that excepting the Panchanama used as a corroborative piece of evidence; no substantive documents were relied upon to strengthen the case of Revenue that there was mis-declaration of goods.
Section 138C ibid deals with the situation, where the computer printouts cannot be considered having evidentiary value in certain circumstances. Various conditions have been prescribed under the statute. Admittedly, in this case, the prescribed conditions have not at all been complied with by the department. More particularly, the required certificate in terms of sub-section (4) of Section 138C ibid has not been furnished by the department.
Further, in the case of TELE BRANDS (INDIA) PVT LTD, HITESH ISRANI, SHREENATH ENTERPRISES, PRAKASH CHANDRA PANDYA, GNG & CO, NANDGOPAL NAIDU VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [2016 (1) TMI 97 - CESTAT MUMBAI], the Tribunal by relying upon various authoritative judgments has also held that the computer printouts allegedly recovered from the computer of the assessee cannot be relied upon as admissible evidence, in absence of compliance of the conditions laid down in Section 138C ibid - In the instant case, it is not established that the computer in question was in regular use by the appellant in the course of his business. No certificate whatsoever, as required under the provisions of Section 138C (2) was obtained. It is settled proposition of law that if a certain act is to be done by a certain authority, in a particular manner, the same should be done in the manner in which it is ordained. There are no short cuts in investigation.
Seizure of CPU and alleged data retrieved - department has concluded that there was parallel set of invoices for the 21 Bills of Entry, wherein the actual invoice values have been shown, which were less than the declared invoice values - HELD THAT:- The procedures laid down under Section 138C have not been observed by the department, in addition to non mentioning of the details of the CPU, the place of installation in the premise, custodian of the CPU etc. - the documents retrieved, lost their evidentiary value and cannot be relied upon for upholding the charges of undervaluation of goods and demand of the differential duty.
The higher insured value of consignments and payment of premium to the insurance companies cannot be the justifiable ground for rejection of the transaction value, as several factors are involved for negotiation between the parties to the contract of sale, including the insurance companies. Higher value may be declared for insurance purposes for claiming higher compensation in case or damaged to the insured goods. Moreover, there is every chance that the appellants have mis-declared the value to the insurance companies. Such mis- declaration at the best may be an offence under some other law but cannot be a conclusive proof for establishing undervaluation of imported goods - Department has not conducted any enquiry to find out the reasons for declaring high value for insurance policies by the overseas entity and as to whether such values were correct - the rejection of declared value, on the basis of value declared to insurer, is not legal, proper and justified.
Retraction of statements - HELD THAT:- The statements were recorded by the department from Shri Mahesh Chandra Sharma on different dates in a span of 3 years. However, the copies of same were not furnished to the appellant immediately on completion of the summon proceedings. Upon receipt of the SCN together with the RUD’s, the appellant came to know about the content in the statements, though made by him and thus, had sent the retraction letter within the reasonable time. Thus, it cannot be said that there is inordinate delay in filing the retraction letter. Further, the letter of retraction cannot be discarded on such ground, without examining the genuineness of the transactions and for that purpose, to verify the authenticity of available documents and those retrieved during the course of investigation, which admittedly has not been done by the department. In this context, the law is well settled that merely because an assessee has, under the stress of investigation, signed a statement admitting tax liability and having also made a few payments as per the statement, it cannot lead to self- assessment or self-ascertainment - The whole case cannot rest simply on the basis of a retracted statement though belatedly.
Thus, it is evident that none of the evidences relied upon by the department, to allege the under valuation resorted to by the appellants, stand the scrutiny of Law - the department reliance on retracted statements, documents retrieved from computer without following due procedure as per law and the arguments on the basis of insurance policies fall flat - appeal allowed.