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Anil Kumar Tiwari And Paarth Trading Company Versus Commissioner of Central Excise, Tuticorin

Undervaluation of import of Dyed Woven Fabrics - denial of availment of DFIA licence for clearance of the goods - confiscation and imposition of fine and penalty - Held that:- appellant is engaged in trading of imported fabrics and imported “Polyester Dyed Woven Fabrics” from China. Appellant’s contention is that contemporaneous imports relied by Revenue in the case of Bill of Entry No.6800547 dt. 11.5.2012 of M/s.ICON Fibers and Fabrics P. Ltd., Mumbai is not comparable. In this regard, we find .....

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f sale and manufacturer s invoice before the Commissioner of Customs. - Appellants had relied various Bills of Entry and invoices in the form of additional evidence submitted before the Tribunal of import of Polyester Fabrics. In this regard, we find that appellant submitted written submissions to SCN before the adjudicating authority and also appeared for the personal hearing and failed to substantiate their claim during the adjudication proceedings. Therefore, we do not find any force in a .....

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ods/similar goods imported at higher price. - In the absence of any valid documents by the appellant it is evident that declared price of US$ 0.70 per mtr. is not a normal price and the same cannot be considered as transaction value. We find that adjudicating authority correctly determined the value under Rule 4(3) of CVR 2007 and taken the lowest contemporaneous price of US$ 1.05 per mtr. instead of US$ 2.36/mtr of contemporaneous import was available. Therefore, respectfully following the .....

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or any misuse of DFIA licene for clearance of the goods. Therefore, we hold that appellants are entitled to utilize DFIA licence for clearance of the said goods. Accordingly, we allow DFIA benefit for clearance of the said goods. - impugned order is upheld but for the reduction in RF and penalty and allowing DFIA benefit - Decided partly in favour of assessee. - Appeal No. C/41935 & 41936/2013 - FINAL ORDER No.41730-41731/2015 - Dated:- 23-12-2015 - Shri R. Periasami, Technical Member And Shri .....

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aarth Trading Company filed Bill of Entry No.5449215 dt. 13.12.2011 for import of Dyed Woven Fabrics declaring the quantity of 96119 meter equivalent to 141602.51 Square metre. Based on the intelligence gathered by DRI that goods are being highly undervalued, the office of DRI Regional unit, Tuticorin took up the matter for investigation and has examined the goods on 12.1.2012 on the reasonable belief that the goods are highly undervalued at US$ 0.7 per Mtr. when compared to US$ 2.36 per Mtr of .....

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.7 per Mtr on the imported goods and re-determined the value of US$ 1.05 per meter under Rule 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and also ordered for payment of duty of ₹ 69,61,352/-. He confiscated the goods covered under Bill of Entry No.5449215 dt. 13.12.2011 under Section 111 (m) and also imposed penalty of ₹ 30 lakhs on Shri Anil Kumar Tiwari, Proprietor of appellant company under Section 112A of the Customs Act. Hence the present a .....

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Entry for warehousing whereas the warehousing was denied and the goods were seized by the authority. He submits that OIO travels beyond the SCN and submits that only statement of Shri Anil Kumar Tiwari, Proprietor of appellant company was recorded. The adjudicating authority travelled beyond the SCN to consider extraneous factors discussed at paras 17, 18 and relied other evidences of Shri Vikram Jain of Chennai whereas only contemporaneous imports of M/s.ICON Fibers and Fabrics P. Ltd. Mumbai .....

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ble Supreme Court judgement in the case of Tata Chemicals Ltd. Vs CC Jamnagar - 2015-TIOL-120-SC-CUS. 3.2 Regarding undervaluation, he further submits that for enhancement of value, the department relying on contemporaneous imports by M/s.ICON Fibers and Fabrics P. Ltd., Mumbai is not comparable as it was for the later period and he relied the comparative chart given at page 80 of the paper book and explained that both are comparable on account of description, quantity, value and period of impor .....

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iterated the findings of OIO and investigation report. She referred to copy of invoice extracted at page 56.The date of invoice is 10.11.2011 and also drew our attention to comparable invoice at page 44. She referred to mahazar for seizure of the goods annexed at page 51 & 52 and submits that the goods imported are polyester knitted fabrics whereas the appellant declared the goods as Polyester Fabrics whereas on examination the goods were found to be Polyester Suiting Fabrics . She referred .....

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na Textile Co. Ltd., China annexed at page 53 where the contemporaneous goods were imported at the price of US$ 1.32 per mtr. and US$ 2.36 per mtr. supplied from the same country of origin which is similar to contemporaneous of invoice pertaining to M/s.ICON Fibers and Fabrics P. Ltd. She relied Supreme Court s decision in the case of CC Bombay Vs Shibani Engineering System - 1996 (86) ELT 453 (SC). She also relied para-24 of Hon ble Supreme Court decision relied by counsel in the case of CC New .....

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alue of US$ 0.70 per Mtr. is enhanced to US$ 1.05 per mtr is correct or otherwise, (ii) denial of availment of DFIA licence for clearance of the goods, and (iii) confiscation and imposition of fine and penalty is sustainable or not. On perusal of the SCN, investigation report, statement and mahazar, we find that the adjudicating authority has discussed the issue at length in his OIO. 7. As regards the appellant s preliminary objection on the seizure based on the reasonable belief and drawal of s .....

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samples, we find that the Textile Committee s test report conforms to the description of the goods declared by the appellant and it is not disputed by the appellant or by the revenue. We do not find any infirmity as far as the test reports and drawal of samples of both the samples were drawn by the department in the presence of the representatives of the appellant. Therefore, appellant s relying on the Hon ble Supreme Court s citation in the case of Tata Chemicals Ltd. (supra) is not relevant t .....

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a Textile Co. Ltd., China in and around the same time and the date of shipment of both consignments are dt. 29.10.2011 and 11.11.2011 respectively. The appellant is also a trader and purchased the goods from supplier who is also a trader which is similar to evidence relied by Revenue. We find that appellant failed to produce any evidence of purchase order and terms and conditions of sale and manufacturers invoice before the Commissioner of Customs. In the absence of any evidence, we do not find .....

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sence of manufacturer s invoice, or any supplier s price list or manufacturer s price list of the imported goods, we do not find any justification of the appellant it is a discount. The appellant s contention that they have purchased stock lot also is not supported with any evidence. Whereas we find that the statement of Shri Anil Kumar Tiwari, Proprietor clearly confirms that all his transactions are through telephone and he orally bargained the price with supplier and supplier agreed his price .....

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n the present case, as already discussed in the preceding paragraphs there is neither supplier s or manufacturer s price list or any terms of contract of purchase of stock lost etc. to establish the quantity discount. Therefore, the Apex Court judgement is distinguishable and not applicable to the present case. The other citations relied by appellant in the case of CC Mumbai Vs J.D. Orgochem Ltd. (supra) and in the case of Gira Enterprises Vs CC Ahmedabad (supra) are also distinguishable and not .....

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relying these documents at this juncture. On the valuation of the goods based on contemporaneous imports, we rely Honble Supreme Court judgement in the case of CC Mumbai Vs ShiBani Engg. System (supra). The relevant paragraph of the Supreme Court order is reproduced as under :- "10. In our view, the Tribunal mis-directed itself. There is no question of reading the word and disjunctively here. The Exemption Notification must be read plainly, as an ordinary man would read it, and, so read, .....

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11. Insofar as valuation is concerned, the Collector was right in rejecting the transaction value of the goods because, plainly, it was a totally unrealistic value. For the purpose of placing a value on the goods, however, the Collector resorted to very tenuous reasoning which we cannot uphold. At the same time, we must say that we do not approve of the findings of the Tribunal in this behalf, which we have referred to above. It may in a given case be necessary to value unbranded goods on the b .....

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and should bring on record any evidence of identical goods/similar goods imported at higher price. The relevant para-24 of the Supreme Court's judgement is extracted as under :- "24. It is settled law that the onus to prove that the declared price did not reflect the true transaction value is always on the Department. It is also a settled law that the Department is bound to accept the transaction value entered between the two parties. It is not the case of the Department that M/s. PC U .....

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tio held by the Apex Court in the above case is squarely applicable to the present case as the department proved that the declared price is not true transaction and also brought out clear contemporaneous evidence of similar/identical goods at higher price from the same country of origin. Once the department proved the bona fide, the onus is on the appellant to prove to the contrary. 10. In the absence of any valid documents by the appellant it is evident that declared price of US$ 0.70 per mtr. .....

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