TMI Blog2013 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... y rejecting the claim of the DRI. Once the goods are held to be old and used, their value cannot be enhanced by treating the goods as other than old and used goods. There is no findings that the invoices issued by the overseas suppliers are fake or fabricated and that the importer had paid any amount more than that mentioned in invoices either in kind or any other manner. - Decided in against the revenue. - C-89, 106, 108-109 and 144-147/2010 - A-546-553/KOL/2012 - Dated:- 9-8-2012 - Shri S.K. Gaule and Dr. D.M. Misra, J. Dr. Samir Chakraborty, S/Shri Hasmukh Kundalia, Abhijit Biswas and V.N. Drivedi, Advocates, for the Assessee. Shri M.K. Sil, Spl. Counsel, for the Department. ORDER Heard both sides. 2. These appeals (including the appeals filed by Revenue) are directed against Order No. KOL/CUS/PORT/07/2010, dated 25-2-2010 passed by Commissioner. The issue involved in these appeals is common therefore they are taken up together for disposal. 3.1 M/s. S.S. Impex for which M/s. Gee Pee International was Customs House agent filed the Bill of Entry No. 422853 dated 29-7-2008 for 540 bales of old and used garments imported from M/s. American Used Cloth Inc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adies Blouse Ladies Top 19 Nylon Jogging Jacket Track Suit 19 Atheletic T Shirt Jersey 2 Mens White Shirt, Mens Cordruoy Shirt, Mens Shirt Mens Cotton Shirt 65 Boys T Shirt, White Printed T Shirt T-Shirt 21 Ladies Poly Pant (new), L.C.P. (New), Ladies Elastic Jeans, Ladies Rayon Printed Pant Ladles Pant 138 Mens Cotton Pant Mens Cotton Pant 110 Rain Coat Rain coat 1 Original Short Swim Short, Knit Short Half Pant 24 Children clothing (Rummage Light), Children Sweat, Baby Sweat Pant/Shirt Children Apparel 67 Bed Sheet Bed Sheet 7 Ladies Night gown Nighty 1 Ladies Shirts Ladies Skirts 12 Ladies Dress Ladies Mix Apparel 12 Total 540 Most of the above items were found to have no sign of appreciable wear. 3.4 Thus, as many as 83 bales out of the 540 bales of the consignment were found to contain jackets and shirts only. Moreover, most of the articles of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Umar Khan, proprietor of M/s. S.S. Impex. However, he did not respond to the said summons on 17-2-2009. Mr. Umar Khan, proprietor of M/s. S.S. Impex appeared to the DRI in response to the summons issued to him on export of worn clothing vide Bill of entry No. 422853 dated 29-7-2008 and in his statement recorded on 17-2-2009 and 18-2-2009 that he was related to the firm M/s. S.S. Impex as its Proprietor, Mohammed Shakir Mohammed Umar Khan was his elder son. He further stated that he was fully aware that bale code was written on each bale. On that basis he came to know what items were imported. His customers were aware of the bale code No. They also knew what items were there inside a bale against any particular bale code No. He added that each item had different price depending on its quality. 3.7 With a view to ascertain the price at which the subject imported items of article worn cloth on wholesale basis, the premises of one M/s. Ma Vabatarini Enterprises, a wholesale trading firm of worn clothing was visited by the officers of DRI. The said office-cum-godown was stacked up with about 540 bales of worn clothing . Similarly, the clothing was re-examined by DRI. 3.8 Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired), Shyamal Mondal, Appraiser, Customs House, Kolkata, Shri S.C. Saha, Appraiser and Manish Kr. Meena, Commr., Customs House, Kolkata. Aggrieved by the same the Revenue is in appeal. 4.1.1 Ld. Advocate appearing for the S.S. Impex led the arguments. The contention of the advocate is that the DRI officers re-examined the goods. The contention of the applicant is that they imported 540 bales of used garments from M/s. American used cloth, INC. and filed Bill of Entry declaring the goods according to description given by the foreign supplier in their invoice. The Department assessed the duty on the said goods by enhancing the value from USD 0.45 to USD 0.60 per Kg. Thereafter the goods were examined by Examination Committee. The Examination Committee in their report stated that the goods are lying with the DRI. The allegation of the DRI had been that most of the items were found to have little or no sign of appreciable therefore, does not merit classification under the Heading No. 6309. The contention is that Chapter Heading 6309 is for worn clothing and there is no sub-heading under this heading of worn clothing under the same category. The DRI attempt to classify the goods unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the goods with item-wise break-up is not a statutory requirement and the appellant has described the goods according to the description in the invoice of the Foreign supplier. The contention is that it is a settled principle of law that if the description is given in the Bill of Entry according to the export document of the Foreign Supplier, no mis-declaration of the goods can be attributed. This legal position has been upheld in the following judgments : Kirti Sales Corporation v. Commissioner - 2008 (232) E.L.T. 151 (Tri.-Del.) All Seas Marine Contracts Ors. v. Commissioner - 2011 (272) E.L.T. 619 (Tri.) Vinayaka allies Pvt. Ltd. v. Commissioner - 2009 (246) E.L.T. 540 (Tri.) 4.1.4 The contention is that the Commr. has accepted the classification and the Department could not provide any evidence that the invoice of foreign supplier was available and there was no evidence of flow back of fund. Therefore mis-declaration of amount of classification and valuation against them is not sustainable. The contention is that the Redemption Fine of Rs. 4,25,000/- has been worked out as 25% of Rs. 16,98,440.51 arbitrarily enhanced by the Commr. since the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods imported was nothing but old and used garments. The contention is that the CHA was aware of the contention of appellants. Hence the wholesale price on which the same was sold to the Kolkata based traders actually identified all the goods as well as its wholesale market price. No single piece of evidence has been brought out. Similarly no evidence has been brought out regarding the allegedly 30% of bales on the basis of consignments said to be delivered by the appellant to M/s. Ma Vabatarini Enterprise nor any person has been identified for such consignment. The contention is that it is not obligatory on the part of Customs House Agent under any Provision of the Rules and regulations framed therein to keep the Customs Authorities informed about the wholesale prices of the goods produced in the domestic Indian market. The obligation has been cast upon the importer to ensure correct/genuineness of the nature and the value of the goods invoice/documents before handing over for the preparation of the bill of entry and seeking clearance thereof on behalf of the importer and to find out the correctness of the above aspect of whatsoever officer of the Customs Department is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the bales as the bales have respective code word/phrase. It may be pointed out that the entire consignment is still in the warehouse under the control of Customs, pending clearance. 5.2.5 As regards the appreciable wears, it is submitted that apart from the reasonable belief of the seizing officers which has been held by the adjudicating officer being justified, nothing more could be placed before the Hon ble Bench. It may kindly be appreciated that the goods falling under Chapter 63.09 are only Worn clothing and other worn articles . 5.2.6 Further during examination it was found that each bale was marked with a specific code number and each code number signified a specific item. For example bales having code of L.C.P (new) were found to be containing ladies cotton pant only . Md. Umar Khan, father of the proprietor of the importing firm, in his statement dated 17-2-2009 and 18-2-2009 recorded under Section 108 of the Customs Act, admitted that he was fully aware of the fact that code number was written on each bale and that his customers also know about the bale code number and what such code denotes and which item is inside the bale having the specific code. He also admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... little or no sign of appreciable wear in absence of sufficient evidence. As such he held that the imported goods are classifiable under CTH 6309 and hence restricted item for import. That s why ld. Commissioner had invoked the provisions of Section 111(d). In this connection it may be mentioned with the fact that the subject import consignment is a restricted item, was known to the importer all along. That is why the consignment was pending adjudication before Addl. Commissioner. As the importer is already aware of the violation made, they cannot challenge consequences for such violation even if the relevant section is not mentioned in the show cause notice as held by Hon ble High Court of Delhi in AVI Steel Traders v. Commissioner of Central Excise [2010 (260) E.L.T. 43. Del.]. 5.2.9 As regards valuation, the contention is that the investigation was carried out with one Ma Vabatarini Enterprise, the wholesale trader for such imported goods. It was found that that Mr. Umar Khan of Ma Vabatarini Enterprise repeatedly violated exim policy hence the penalty imposed. From the Register of Ma Vabatarini Enterprise, the wholesale price of goods were ascertained and the redemption fine a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they were part of Examination Committee constituted by the Department and they have examined the consignment of old and used garments as per the existing practice and they have examined the consignment by strip opening without bursting the bales. The contention is that methodology that no sign of appreciable wear has been put to use for the first time in the instant batch of cases. The contention is that earlier also the officer of DRI were participating in the examination of such consignments and no such sign were found in the examination carried out earlier. In case the Department or DRI wanted to revise old practice. The Examination Committee ought to have been put on to notice. They placed reliance on Hon ble High Court of Calcutta s decision in the case of Mercantile Express Co. Ltd. v. Assistant Collector of Customs [1978 (2) E.L.T. (J552) (Cal.)] and in the case of Sandip Agarwal v. Collector of Customs - 1992 (62) E.L.T. 528. The contention is that they are also protected under Section 155 of Customs Act, 1962, they have placed reliance on Hon ble Supreme Court s decision in the case of Fernandes v. State - 1996 (82) E.L.T. 433 (S.C.). 7.1 We have carefully consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in identical/similar imported goods. The valuation was not done on the basis of any transaction of any indigenous goods. The notices did not give break-up of the articles of the consignment which had a bearing on its valuation in terms of explanation (iii) to Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Noticee s contention that the Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had no application or Rule 4/5 was applicable here, is not convincing at all as the subject goods were not of any uniform standard. Accordingly, said rules 4 and 5 did not have any application and said rule 9 of the Valuation Rules, 2007 supra, (corresponding to Rule 8 of the Customs Valuation Rules, 1988) had been followed in the instant case for valuation of the goods. Interpretative Note to said Rule 9 allowed reasonable flexibility in respect of the identical/similar nature of the goods. Reliance in this regard was placed on the judgment of the Hon ble CESTAT-in the case of B.K. Spinning Mills (P) Ltd. v. Collector of Customs, Cochin [2000 (117) E.L.T. 604 (Tri.)] wherein it was held that the (erstwhile) Rule 8 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be determined by proceeding sequentially in accordance with Rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the Importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include- (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price, (c) the sale involves special discounts limited to exclusive agents; (d) the mis-declaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non-declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. 7.5 We find that Rule 12 itself does not provide a method for determination of value. From the Explanation (I)(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e. at the time when the goods reaches the customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price, the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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