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Sanjay Kumar Agarwal And Balaji International Versus Commissioner of Customs, Mumbai

2015 (11) TMI 812 - CESTAT MUMBAI

Valuation - Doubting the declared transaction value, the department obtained a quotation - Demand of differential duty - Confiscation of goods - Imposition of redemption fine - Held that:- It is indeed surprising that the whole case has been made on the basis of one quotation. The value has been determined by proceeding sequentially through the Valuation Rules. No contemporaneous data was available. Therefore, as the value could not be determined under Rules 4,5,7 & 8, resort was made to Rule 9 .....

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n conducting investigations through a proper market enquiry. For authentic enquiries the department should have at least sought the purchase invoices and the sale invoices of M/s. Max Flex & Imaging System Pvt. Ltd. to lend credibility to their evidence.

Valuation Law under Section 14 read with the Valuation Rules provide a proper method to determine the assessable value if there is a doubt regarding the accuracy of the declared value. A mere suspicion is not enough to reject the tra .....

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alue cannot be rejected on basis of a quotation which gives domestic retail sale price. If this were to be accepted, it would cause unimaginable distortion in interpreting the Valuation Law. - percentage of excess miniscule. Moreover the duty is on specific rate basis i.e. on weight basis. And the weight was declared correctly. We see no mischief or any attempt to evade duty. Therefore we hold that confiscation is not warranted. - re-determined values are unsustainable in law. Consequently confi .....

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.2.2013. 2. The appellant filed Bill of Entry dt. 4.6.2008 for import of Flex Sheeting Frontlit and Flex Sheeting Backlit from M/s. Grand Dignity Industrial Co. Ltd., Taiwan declaring the price as US$ 1100 PMT and US$ 1200 PMT respectively. On examination of the goods the following was noticed - (a) Goods were found to be of Star Flex brand made in Korea as against unbranded as declared in the Bill of Entry. (b) 2052 rolls Flex were found as against the declared 2044 rolls. Doubting the declar .....

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imported by him during 2008 would be around 85% of the prices listed in the quotation and the prices of the goods imported in 2007 would be around 75% of the prices listed in the quotation. On this basis, the assessable value were determined to be US$ 1890 PMT and US$ 2640 PMT for the year 2007 and US$ 2142 and US$ 2992 for the year 2008 for Frontlit/Backlit Sheeting respectively. Accordingly, differential duty of ₹ 1,06,59,598/- was demanded for the imports made in 2007 and 2008. In adju .....

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as the past consignments. He referred to the following Supreme Court judgment holding that there must be contemporaneous evidence to reject the invoice value. i) Commissioner of Customs, Calcutta Vs. South India Television (P) Ltd. 2007 (214) ELT 3 (.C.) ii) Commissioner of Customs, Mumbai Vs. J.D. Orgochem Ltd. 2008 (226) ELT 9 (S.C.) iii) Commissioner of Customs, Vishkhapatnam Vs. Aggarwal Industries Ltd. 2011 (272) ELT 641 (S.C.) He stressed the supplier of the goods was merely a Distributor .....

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t commission from the Korean Co. With these documents the Ld. Counsel contended that the quotation on which the whole case is made is totally unreliable. It does not give the country of origin or the size of the Flex Sheeting. To buttress his argument that quotation cannot be become a basis of determining assessable value under the Customs Act, he relied on the following judgments: i) Rashtriya Metal Corpn. Vs. Commissioner of Customs, Nhava Sheva 2004 (172) E.L.T. 380 (Tri.-Mumbai) ii) Commissi .....

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r Valuation Rules contemporaneous prices can only be considered within a period of 90 days. He relied on Tribunal judgment in the case of United Steel Bearing Vs. Commissioner of Customs, Calcutta 2002 (139) E.L.T. 642 (Tri.-Kolkata). He added that the burden of proof lies on the department which has not been discharged while rejecting invoice values. 3.2. Ld. Counsel said that statement alone cannot be relied for enhancement of value. He relied on Tribunal judgment in the case of Orient Enterpr .....

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emporaneous data was available. Therefore, as the value could not be determined under Rules 4,5,7 & 8, resort was made to Rule 9 residual method. And as a residual method, by way of best judgment the quotation has been made the basis. We have seen the quotation. We agree with the Ld. Counsel that this quotation is not reliable. It does not mention the country of origin. It does not mention the sizes of the goods. Further it states that the price offered is applicable from 16.7.2008. The Ld. .....

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justice. The department could have at least verified from two or three more sources for credible evidence. From the procedure adopted, it seems the Department was not serious in conducting investigations through a proper market enquiry. For authentic enquiries the department should have at least sought the purchase invoices and the sale invoices of M/s. Max Flex & Imaging System Pvt. Ltd. to lend credibility to their evidence. A sample of goods in respect of which quotation was taken should .....

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x Flex was sought and not of Sanjay Agarwal. The Ld. Advocate has correctly relied on judgments referred to in para 3 above. 5.1. The appellant submitted sales invoices in respect of goods imported by them but these documents were not considered appropriately and no cogent reason was given to discard the value shown in these invoices. Even the VAT return filed with Sales Tax authorities was not considered. A mere quotation is vastly different from commercial invoice in the eyes of law. Thus, we .....

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it is not possible to reject the declared value at the same level without any cogent evidence. 6. The Valuation Law under Section 14 read with the Valuation Rules provide a proper method to determine the assessable value if there is a doubt regarding the accuracy of the declared value. A mere suspicion is not enough to reject the transaction value. In the present case the department relies on a quotation without checking whether Star Flex is a Brand or not. The test of satisfying criteria under .....

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