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2015 (11) TMI 377 - SUPREME COURT

2015 (11) TMI 377 - SUPREME COURT - 2016 (331) E.L.T. 18 (SC) - Violation of EXIM policy - Undervaluation of goods - assessee had imported the same material declaring higher price which was cleared at Mumbai port - Held that:- Tribunal has not only misinterpreted the statements of two partners of the assessee, it has also sidetracked and ignored other relevant material. We have gone through the statements of the two partners of the assessee and find that there is a categorical admission on their .....

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less compared to rates at Mumbai which does not inspire any confidence, that too in the absence of any material given by the assessee in support of this plea. - no documentary evidence was produced by the assessee to support the plea that the goods at Chennai port were inferior in quality than the goods imported and cleared at Mumbai port and there was no warranty clause of the goods imported at Chennai

The goods imported by the assessee which were cleared at Mumbai port were found to .....

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i Kumar Pathak, Adv. Mr. Ritesh Kumar, Adv. Mr. Aviral Kashyap, Adv. Mr. B. Krishna Prasad,Adv For the Respondent : Mr. K. L. Janjani,Adv JUDGMENT A. K. Sikri, J. The respondent/assessee herein imported sixteen consignments of secondary/defective CRGO Electrical Steel in the form of Sheets, Coils, Strips and Cuttings, for which it filed different Bills of Entry. The unit price of the goods was declared as US$ 250 Per Metric Ton (PMT) for CRGO Electrical Steel Strips and US$ 300 PMT in respect of .....

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ods imported were USA, Japan, U.K., Russia, Europe etc. and the value of these goods assessed ranging between US$ 475 (C&F) to US$ 750 PMT (C&F). On that basis, the show cause notice proceeded as under: 15. In terms of Rule 3 of the Customs Valuation Rules, 1988, the value for the purpose of assessment shall be the transaction value of the goods under Rule 4 of the said Rules, ibid, the transaction value of the imported goods shall be the price actually paid or payable for the goods when .....

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l as M/s. Alfa & National for import of Secondary/Defective CRGO through the Port of Mumbai / Nhava Sheva as against the values declared by M/s. Alfa for their imports (currently under investigation) through Port of Chennai, have not declared are price/ value at which such or like goods are ordinarily sold or offered for sale as contemplated under Section 14 of the Customs Act, 1962 read with Rule 4 of the Customs Valuation Rules, 1988 in as much as they have declared much lower values for t .....

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e the values/prices at which such goods are ordinarily sold or offered for sale. 2) It is clear from the above that the main ground on the basis of which undervaluation of the goods was alleged was that the assessee had imported the same material declaring higher price which was cleared at Mumbai port. Order-in-Original was passed affirming the said show cause notice and the demand of differential duty, including interest contained therein. The assessee had taken up the defence that the goods im .....

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was not supported by any documentary evidence. 3) The assessee filed appeal against this order before the Customs Excise & Service Tax Appellate Tribunal (in short 'CESTAT'). The CESTAT, vide impugned decision dated 18.07.2006, set aside the order of the Adjudicating Authority, by accepting the plea of the assessee and holding that the declared values representing the true and correct transaction value under Rule 4 of the Customs Valuation Rules and, therefore, was required to be ac .....

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inal passed by the Commissioner. The Tribunal, finding fault with the Order-in-Original, gave following reasons: 11. We also find substance in the contention that there is a variation between the prices of goods imported through Mumbai Port and through Chennai Port for the reason that, while the goods imported at Mumbai were under contract containing a guarantee clause, contracts under which the Chennai imports took place had no such clause. 12. There is yet another reason for rejecting loading .....

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ure. In other words, while ruling out Rules 5 and 6, what he has done in fact, is to adopt the value of Mumbai imports of the appellants, which cannot be sustained for the reason that admittedly no similar or identical goods are found to have been contemporaneously imported elsewhere in India. Valuation under Rule 8 is also not sustainable for the reason that the rule provides that reasonable means for determining the value read with Customs Valuation Rules and Section 14(1) of the Customs Act h .....

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o him, were based on the investigations carried out in the matter, and clearly depicted that the assessee had shown the value of the same goods in question at a lesser price in the Bills of Entries filed by the assessee. He pointed out that on the basis of a specific information that the assessee and their sister concern M/s. Alfa Laminations, Plot No. B-8-9, IODC Industrial Area, Ringanwada, Daman. 396210 are importing consignments of Secondary Defective ARGO Electrical Steel in the form of She .....

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declared/assessed values ranging from US$ 485 per MT (CIF) to US$ 750 PMT (CIF), depending upon the nature of the product, whereas the goods were being cleared at declared/assessed values ranging from US$ 210 to US$ 300 PMT CIF for import through Chennai port. The learned senior counsel also argued that the Tribunal wrongly recorded that there was no admission in the statements of the partners. He pointed out that Mr. Mahendra Parekh, one of the Partners of M/s. National Lamination specifically .....

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ssessee asking them to show cause as to why the values declared by them in their Bills of Entry should not be rejected and the same be refixed under the 'Best Judgment' method in terms of Rule 8 of the Valuation Rules, 1988 and the differential duty demanded apart from proposing confiscation of the goods and imposition of penalty. 6) Learned counsel also drew our attention to the Order-in- Original wherein the evidence collected against the assessee was discussed by the Adjudicating Auth .....

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Pearson International Inc, USA, M/s. Electrical Steel International, M/s. Trans Metal Gmbh, M/s. Orbit Metals Gmbh, M/s. Gold Arrow Metals, USA, ARB Metals, USA, Norek Trading etc. This list submitted by the importers in respect of imports by others indicate supplies made by M/s. J. Peason International in one case, M/s. Oribti Metals in 3 cases and M/s. Transmetal in 6 instances wherein the values were shown in the range of US$ 280 to US$ 350 PMT. On the other hand, the investigation brought ou .....

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orts made by others through Chennai port at the same price as the importers should be accepted for assessment. Such imports were stray cases of lower values being adopted and in any case cannot form the basis of comparison when clear evidences are available to arrive the conclusion that the correct value of the goods was more than US$ 485 PMT when imported in any form. 7) Another significant material which was referred to by the learned counsel is the statement of the partners of the assessee wh .....

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ment of the Tribunal is unsustainable. In fact, the Tribunal has not only misinterpreted the statements of two partners of the assessee, it has also sidetracked and ignored other relevant material. We have gone through the statements of the two partners of the assessee and find that there is a categorical admission on their part that the prices/values declared by them for imports through Chennai port for similar items was much less compared to the values declared at Mumbai port. At this juncture .....

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s the reason and for this reason, these goods were brought at lesser price. It was also explained that though there was guarantee clause in the contracts in respect of goods imported at Mumbai, no similar provision was there for the products imported and cleared at Chennai port. However, we find that assessee has not substantiated the aforesaid plea by producing the contract in respect of Mumbai port and Chennai port. In the absence thereof, it was not permissible for the Tribunal to accept this .....

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