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M/s Rico Gems Corporation, Shri Hitesh Israni, M/s. Telebrand India Pvt Ltd, Shri Narendra Mehta Versus Commissioner of Customs (Import) , Mumbai

2016 (1) TMI 551 - CESTAT MUMBAI

Under valuation and mis-declaration of the goods namely 'AB King Pro, 5 in 1 Air-O-Space Sofa, Slim-N-Lift (Female Shorts), Magic Bullet (Food Processors), Sauna Belt (Fat Reduce Belt), Tool Kits' - In one of the statement undervaluation was admitted by Shri Narendra Mehta, proprietor of importer firm. However, the said statement was retracted. Undervaluation was further supported by the difference in the value declared to the Custom, sale price of importer to M/s. Telebrand and sale price of th .....

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en though it is assumed that price of the M/s. Shreenath and M/s. GNG & Co. are correct, the price of contemporaneous goods adopted at the time of assessment and clearance of the goods which is lowest between the two contemporaneous value, the further enhancement cannot be done. In this legal position, the adjudicating authority has erred in applying the alleged value of M/s. Shreenath and M/s. GNG & Co. for enhancement of the value. In the case of present appellant, this legal position has been .....

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it is our observation that firstly even if there is difference between import price and sale price of the said goods in the domestic market, the difference cannot be made the basis for holding that the price of the imported goods has been undervalued. In the present case there is no material evidence on record to show that there is flow back of amount over and above the sale value between importer and M/s. Telebrand India.

Demand set aside - Decided in favor of appellants. - Appeal N .....

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and of differential custom duty, penalties and personal penalties on various persons on the issue of undervaluation of imported goods. 2. The fact of the case is that on the information gathered by the officers of the Commissionerate of Custom (Preventive), Mumbai that M/s. Rico Gems Corporation and others are evading Customs Duty by resorting to under valuation and mis-declaration of the goods namely 'AB King Pro, 5 in 1 Air-O-Space Sofa, Slim-N-Lift (Female Shorts), Magic Bullet (Food Proc .....

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were recovered from the appellants' premises. Officers also obtained report from Custom Department, Hong Kong. In one of the statement undervaluation was admitted by Shri Narendra Mehta, proprietor of importer firm. However, the said statement was retracted. Undervaluation was further supported by the difference in the value declared to the Custom, sale price of importer to M/s. Telebrand and sale price of the Telebrand to their ultimate customers, the difference thereof was also considered .....

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Commissioner confirmed the charges and proposal made in the show cause notice. Confirmation of charges was made on the basis of following evidences and findings thereon. As per the statement of Shri Narendra Mehta of M/s. Rico Gems Corporation dated 30/5/2006 and 20/1/2010, it is M/s. Telebrand who negotiated the price of the goods with the foreign supplier and Shri Hitesh Israni of M/s. Telebrand used to send the copy of invoice to Shri Narendra Mehta for making payment and clearance of the goo .....

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arendra Mehta stated that price used to fix by Shri. Hitesh with the foreign supplier for imported goods in the name of the M/s. Rico Gems and the same was not fixed by Shri Narendra Mehta and he does not know that the price is normal international price; that in the report dated 14/5/2007 from the Customs and Excise department, Hong Kong, the name of the Customer is shown as M/s. Telebrand thus it appears that supplier M/s. Creative Nation International was aware that the product imported by M/ .....

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dated 11/3/2010 of Shri Hitesh Israni, on being asked abut unit price of USD 33.50 for Air Sofa, Shri Hitesh Israni stated that the actual price may be USD 33.50 while selling the said product to M/s. Telebrand. Shri Narendra Mehta has raised the sales invoice of ₹ 1800 per unit which comes to USD 45 approximately and that may be actual cost of USD 33.50 per unit plus custom duty and marginal profit might to be covered in the said value of USD 45. As per the statement dated 1/5/2006 Shri .....

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at all the goods imported by M/s Rico Gems and received by them are of standard quality goods which identical to the goods imported by M/s. GNG and M/s. Shreenath; that in the statement dated 20/1/2010 on being asked about the differential value between the value mentioned in report of Customs, Hong Kong and the invoices submitted to the Custom of 1940 pcs of imported goods, he stated that he made payment on the basis of invoice given to him by Shri Hitesh Israni of M/s. Telebrand and details of .....

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i (20 inch container) which read as : "make the payment of attached invoice dated 20/2/3005 (sic) (PO. CNI 1897) of Creative Nation International ltd for supply of Air-O-Space Soft bed and the other invoice CNI no. 1896 dated 20/3/2005 of the same party, supply of same product. Goods namely 120 set of Slim and Lift (body trimmer) exported under the shipping bill No. 5863859 dated 31/12/2005 were at USD 4 per pc totaling US$ 4820 to M/s. Hot Brand (CFZE) Sharajah, UAE and the export was unde .....

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s. Rico gems are also supplied by M/. GNG & M/s. Shreenath. M/s. Telebrand selling all the prdouct under their own brand, transaction value of the product is to be re-determined under provisions of Rule 5 of Custom Valuation Rules, 1988 (Now Rule 4 of Customs Valuation Rules, 2007) and the value arrived at in respect of M/s. GNG and M/s. Shreenath is the correct transaction value for the product in question of Rico; that Shri Hitesh was well aware of the price at which the product supplied b .....

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ware of the negotiated price of the product imported by M/s. Rico and have aided and abated in undervaluation being done by M/s. Rico; that Shri Narendra Mehta in his statement accepted the fact that product imported by Rico are identical to that imported by M/s. GNG and M/s. Shreenath. Valu of the product liable to be redetermined under the provision of Rule 5 of the Customs Valuation (determination of value of imported goods) Rules, 1988. As regard the cross examination, Ld. Commissioner given .....

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ing authority contended that further enhancement was proposed on the basis of evidence gathered from various persons' statements and documentary evidence. As regard the evidentionary value of letter dated 14/5/2007 of Excise department, Hong Kong such documentary evidence is admissible under Section 139 of the Customs Act, 1962. On limitation, Ld. Commissioner contended that importer has mis-declared description and value of the imported goods hence have suppressed the facts so larger period .....

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ellant, M/s. Rico Gems Corporation made following submissions:- (a) There is no basis for enhancement of value. In the statement of appellants, Proprietor, Narendra Mehta and Hitesh Israni of Telebrand there was no admission of any undervaluation or any payment of the remittance over and above the invoices price of the imported goods. Department seized certain documents from the office premises of One Shri Prakash Pandya who was importing the similar goods from other supplier and according to th .....

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ntemporary imports by other importers. (c) The department recorded further statements dated 20-1-2010 and 10-3-2010 of the Appellant's Proprietor in which he maintained that the Appellant had remitted only the Invoice price through legal banking channels and there was no admission of any undervaluation or of any payment/remittance over and above the Invoice price. (d) There is a purported Statement dated 18-3-2010 of the Appellant's Proprietor which is not signed by any Gazetted Officer .....

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atable Sofa Bed, the Notice proposed to enhance the value based on a Report dated 14 th May 2007 of the Hong Kong Excise Department. There are several other items of import such as Sauna Solution, Inflatable Chair, Salon Shaper, Twist & shape, Air-O-Space, Juice Extractor, etc which are neither covered by the said Pages 124 and 125 of the documents seized from GNG & Co nor by the Report dated 14 th May, 2007 of the Hong Kong Excise Department and for which no basis is indicated in the No .....

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rseas - 2005 (181) ELT 213 Shimnit Machine Tools & Equipment Ltd v CC - 2006 (204) ELT 630 Vitesse Export Import v CC - 2008 (224) ELT 241 SRK Enterprises v CC - 2012 (280) ELT 264 (h) The very fact that the values of the Appellants' imports had been enhanced at the time of import by comparison with the prices of contemporary imports would show that there are contemporary imports at prices at which the Appellants' goods have been assessed. Under Rules 5 and 6 of the Customs Valuation .....

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Appellant's categorical stand that there are contemporary imports at prices/values which are at or about the same level as the prices of the Appellants' imports and which have been accepted by the department and since the same are lower than the prices determined in the case of the said two other importers, it is the said lower prices which have to be adopted and applied. Reliance is placed in this behalf on the decision in SRK Enterprises v CC - 2012 (280) ELT 264, in which it is held .....

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ments dated 20-1-2010 and 10-3-2010 that the Appellant had remitted only the Invoice price through legal banking channels and there is no admission or evidence of any payment / remittance over and above the Invoice price. Thus the Invoice price was the price actually paid for the imported goods and was therefore the transaction value. (j) Without prejudice to the aforesaid submission, assuming while denying that the transaction value is liable to be rejected because the price was negotiated by H .....

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amp; Co and Shreenath Enterprises were only up to March 2006. For the period April 2006 to November 2008 there were contemporary imports of other importers and the Appellant's value had already been enhanced based on such contemporary imports. (l) The cross examination of representatives of GNG & Shreenath Enterprises clearly reveals that their statements and Pages 124 and 125 of the seized documents are unreliable for arriving at a finding of undervaluation. (m) Appellants by Telebrands .....

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der does not dispute this position. Thus applying the provisions of Rule 7 of the Customs Valuation Rules 1998, it would follow that the import price on which the Appellants had paid duty is correct and genuine. There is thus no scope for holding that the import price was undervalued. (n) The Commissioner erred in relying on letter dated 14 th May 2007 of Deputy Head, Trade Investigation, Hong Kong addressed to the Consulate General India, Hong Kong. As per this letter, in the case of imports of .....

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o a third party or used in any proceeding. In fact the covering letter of the Consulate General of India, Hong Kong to the DRI makes it clear that the said letter bears the said caveat and if a caveat free report has to be obtained, the procedure under Mutual Legal Assistance Ordinance, Hong Kong SAR ought to be followed by DRI. Obviously the said procedure has not been followed in this case and the letter which is received with the said caveat cannot be used in the present proceeding. Secondly, .....

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ation Report of the Hong Kong Excise and Customs (which had a similar caveat as in the present case as would appear from the Tribunal's decision reported in [2001 (136) ELT 243)] without authenticated copies of the foreign documents relied upon, the report being furnished cannot be relied upon for enhancement of value. Thirdly, the imports in the present case were made by the Appellants from CNI - Creative International (HK) Ltd., Hong Kong and even payments were made to the said Hong Kong c .....

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e not been received and hence Section 139 is not applicable. As held by the Supreme Court in the case of Collector v East Punjab Traders - 1997 (89) ELT 11 (SC), for the presumption under Section 139 to apply, authenticated copies of the Invoices referred to in the report ought to have been obtained from the Hong Kong Customs. (o) In the present case apart from the fact that the Annexure to the Report is not even signed, the authenticated copies of the alleged Invoices of Creative Nations Intern .....

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f the Customs Act 1962 on 18-3-2010, the Commissioner has not at all dealt with the Appellants' submission that the same is not admissible in evidence as the same has not been signed by any officer of Customs at all, much less by a Gazetted officer of customs and the same is not recorded before a Gazetted officer of customs. (q) A bare perusal of the said statement dated 18-3-2010 would shown that no signature of any officer appears thereon. The same is therefore not admissible in evidence. .....

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hen the Appellants' Proprietor reached Mr. Ahir's office he was informed that Mr. Ahir was not available. The Appellants' Proprietor was asked to wait for Mr. Ahir in his office. In Mr. Ahir's office a person who claimed to be an officer subordinate to Mr. Ahir met the Appellants' Proprietor and told him that he had been asked by Mr. Ahir to record his statement. The said officer, who did not disclose his identity, insisted that the Appellants' Proprietor should record st .....

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e to be recorded. Only after the said illegal and involuntary statement was recorded that the Appellants' Proprietor was allowed to go home at 2:00 AM on 19.03.2010. (s) The Commissioner should have held that the said statement dated 18-3-2010 was involuntary and the same had not even been signed by the officer who recorded the same. The Commissioner should have followed the decision of the Hon'ble Tribunal rendered in case of Manoj Kumar-vs-Commissioner of Customs (Kanpur) 2004 (176) EL .....

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nt the Appellants' Proprietor has purportedly stated that the price of the said goods in the International market were higher than the price declared in the invoices to the Customs. This is completely false inasmuch as the prices declared in the respective Bills of Entries, under which the said goods were cleared, and the connected invoices are duly supported by contemporaneous import records based on which the assessments were finalized in the first place. As such the Appellants' Propri .....

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e invoice price was made. The department has also not produced any evidence of any payment made by the Appellants of any amount over and above the prices mentioned in the foreign suppliers' invoices. That apart, the very fact that there are contemporary imports at or about the same prices as those imported by the Appellants belies the statement dated 18-3-2010 sought to be relied upon by the department. Nor has Mr. Hitesh Israni of Telebrands India P. Ltd in his statements stated that any pa .....

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t" "Magic Bullet" "Tool Kit Drill M/C. and Diamond blades. As regards the rest of the goods imported by the appellants, such as Suana Soluation, inflatable Chair, Salon Shaper, Twist & Shape, Air o Space, juice extractor. Etc there is no material whatsoever in the notice issued to the appellants for enhancement of the value of the said goods. The notice does not indicate any material or basis or evidence for arriving at the proposed enhanced value indicated in the Annexur .....

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has no application to the present case. The enhancement of the value of the Appellants' imports is made based on the statements of Prakashchandra Pandya and Nandgopal Govindwamy Naidu, Partners of GNG & CO and Pages 124 and 125 of the documents recovered from them. These statements were recorded and the documents were recovered in April 2006. The bulk of the Appellants' imports are after the recording of the said statements and the recovery of the said documents and the same were th .....

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. In these circumstances, the larger period of limitation decision of the Tribunal in the case of Milton Plastics Limited v CC - 2006 (204) ELT 497. That apart as submitted herein above, since the Appellants were new to the range of products which the Appellants' started importing for sale to Telebrands India P. Ltd. the sourcing of the material and the negotiation of the prices with the foreign suppliers was done by Mr. Hitesh Israni of Telebrands India P. Ltd. and the Appellants had made p .....

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eriod of limitation has no application to the Appellants. The Commissioner erred in not dealing with any of these submissions and in simply holding in one line that the Appellant had misdeclared the description and value of the imported goods and hence had suppressed the facts. Firstly, there is no misdeclaration of the description of the goods. Secondly as submitted above, it is an admitted position that the Appellants had made payment of only of the prices mentioned in the Invoices of the fore .....

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ejudice to the aforesaid submissions, in any event the Commissioner erred in simultaneously imposing penalty on the Appellants under Section 114 A of the Customs Act 1962 and on the Appellants' proprietor under Section 112(a) of the said Act. The Commissioner erred in not appreciating that it is settled law that a proprietary firm and its proprietor are one and the same entity/person in law and therefore imposition of penalty on the firm under Section 114A and on the proprietor under Section .....

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Section 114 AA is therefore clearly inapplicable in the present case. Secondly, apart from the fact that appellants have not knowingly or intentionally made, signed or used or caused to be made signed or used any false or incorrect declaration, statement or document, as would be apparent from the Twenty Seventh Report of the Standing Committee of Finance wherein insertion of Section 114AA was discussed at para 62. 4. Shri V.K. Singh Ld. Special Consultant appearing on behalf of the revenue reite .....

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Gems for remittance and submission to customs. After clearance the goods have been sold to M/s Telebrand. In fact goods were directly delivered from port to the godown of M/s Telebrand, therefore this is a case of import of goods on behalf of M/s Telebrand. (ii) In his statement dated 18.03.2010 Shri Mehta has admitted that value of goods were mis declared. (iii) In report dated 14.05.2007 of the Customs and Excise Department Hong Kong the name of Indian Customer is shown as M/s Telebrand. This .....

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Customs as referred above where invoice value has been shown as US$ 67948 for air sofa bed and mention that payment has been received from M/s Rico Gem Corporation, where as in the invoice value declared to Indian Custom value is very low, Shri Isarani stated that as per statement there is difference in the invoice value and that the statement also mentions the Indian customer as M/s Telebrand and payment made by M/s Rico Gem and that unit price of the air sofa looks like US$ 33.5 approx; that .....

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e of US$45.00. (vi) In case of export vide shipping bill no. 5863859 dated 31.12.05, 120 sets of slim and lift (body trimmer) were exported at US$ 4 per piece totaling US$ 480 to M/s Hotbrand (FZE) Sarjah, UAE and the export was under free shipping bill and same product was imported at US$ 1 per piece, Shri Mehta stated that value at the time of import declared on the basis of invoice sent to him by Shri Israni and in this case also the actual value was fixed on the basis of the actual value of .....

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y mis-declaring the value. (ix) As regards submission that once value was enhanced by the department after referring to NIDB Data, value could not be further enhanced, It is submitted that appellant have not stated as to whether the value was enhanced in case of all bills of entry or only few. This is case where the value of goods were found to have been misdeclared in value. After investigation Department came to know about the actual value of the goods. Therefore value ahs been re-determined c .....

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is established law that fraud unravels all hence the assessment has been rightly reopened in terms of provisions of Section 28 of the Customs Act, 1962. In support of this submission, reliance is placed on the Hon'ble CESTAT judgment in the case of M/s. A.G. Incorporation Vs. Commissioner of Customs, Delhi - 2013 (287) E.L.T. 387 (Tri-Del). (x) With regard to submission that statement dated 18.03.2010 can not be considered as evidence as it was not signed by an officer of customs, it is sub .....

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rrest. It may be mentioned that in the same affidavit Shri Mehta has stated that his earlier statement was correct. and in his statement dated 30.05.2006/20.01.2006 he has accepted that value of slim and fit declared as us$4 a piece (as against value of us$1 shown at the time of import) is the correct value. The aforesaid affidavit also shows that a statement was given by Shri Mehta on 18.03.2010 and this can be considered as a communication from Shri Mehta to the officer. Further this affidavit .....

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oods on behalf of M/s Telebrand and had declared the value on the basis of invoice supplied to them by Shri Hitesh Israni of M/s Telebrand. It is also seen that Shri Hitesh Israni / Telebrand was purchasing identical imported goods from M/s GNG and Company and M/s Shreenath Enterprises having same country of origin and were selling both the goods at the same price. It is therefore reasonable to believe that import price of the goods imported by the appellant and M/s GNG & Co and M/s Shreenat .....

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. As regards re determination of value, as the goods imported by the Appellant were identical to that imported by M/s GNG & CO and M/s Shreenath, they were being purchased by the same person in India and being sold at the same price the Adjudicating authority has correctly determined their value on the basis of value determined in case of M/s GNG & CO and M/s Shree Nath Enterprises. Further, the import price of the product in question of M/s. Rico Gems Corporation have not changed since .....

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said imported goods, has in his statement admitted the fact that the goods imported by M/s. Rico Gems Corporation was identical to the imported by M/s. GNG & Co & M/s Shreenath Enterprises and also that the purchase price in respect of purchases from both these importers was mostly the same. Thus, the value in respect of M/s. Rico Gems Corporation has been correctly re-determined under the provisions of Rule 5, rule 6 read with Rule 8(1) of the Customs Valuation (Determination of Price o .....

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gned and unattested photocopies. In this I also rely on decision of CESTAT in the matter of Winstar Electronics vs Commissioner of customs 2006 (201) ELT 76 (TRI-Del)]. (xiii) As this is case where appellant has given incorrect declaration regarding correctness of the value of goods. The value subsequently found to have been mis-declared, therefore has correctly been confirmed invoking the extended period of limitation. Reliance is placed on (i) 2010 (256) ELT 369, Commissioner of C.Ex., Surat-I .....

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ating Authority in para 69 of the order "In this regard, as already discussed above while analyzing the statements of various persons involved in this case I find that Shri Hitesh Israni in his statement dated 8.03.2010 has stated that all the goods imported by M/s Rico Gems Corporation and received by him are of standard quality goods which are identical to the goods imported by m/s. G.N.G. & Co. and M/s. Shreenath Enterprises. I further find that Mr. Hitesh Israni of Telebrands (India .....

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n was being imported. Mr. Hitesh Israni has aided and abetted in the undervaluation being done by M/s. Rico Gems Corporation. In the light of various case laws, I find that the statements of co-accused can be relied upon if they are duly corroborated by other clinching evidences. In this case too, incriminating statements of co-accused are well corroborated by many documentary evidence which have already been discussed in the foregoing paras." Thus M/s Telebrand and its Managing Director Sh .....

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e prayed that the Hon'ble CESTAT be pleased to reject the above appeals. 5. Ld. Counsel, against the arguments/submissions of the special counsel, made the following rejoinder:- (a) The learned Special Consultant for the department relied upon the decision of the Tribunal in the case of AG Incorporation v CC - 2013 (287) ELT 357. It is submitted that the said decision is distinguishable and is not applicable to the facts of the present case for the following reasons: (i) The premise on which .....

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values were loaded based on values of contemporary imports. (ii) In the said case of AG Incorporation the Tribunal has in Para 17.7.1 observed that the decision in the case of Lord Shiva Overseas was taken on the facts of that case. The facts in AG Incorporation were found to be different because in case of AG Incorporation as noted in Para 9 the subsequent enhancement was done on the basis of data of contemporaneous imports. In the present case the initial enhancement itself has been done on t .....

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e Commissioner, the fact still remains that there were other contemporary imports of identical goods made by others which were available and accepted by the department and accordingly under Rule 5 the lowest of these values has to be adopted. These facts are not to be found in the decision in AG Incorporation as there is nothing to show that in that case there were contemporary imports at lower price which called for adopting of the lowest price in terms of Rule 5. (b) It was contended at the he .....

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ed by another person on behalf of the Appellant cannot mean that such price which was charged by the Foreign supplier and actually paid by the Appellant cannot be the transaction value. What is relevant is not who negotiated the price but what was the price actually charged by the supplier and paid by the importer. (c) The Learned Special Consultant for the Revenue relied upon the decision in 2009 (239) ELT 294 - Best & Co v CC in which in Para 6.5 the Tribunal has observed that Documents ob .....

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This clear from the letter of the Consulate General, Hong Kong. (ii) Secondly, the observations in the said decision of the Tribunal have not taken into account the decisions of the Supreme Court in the case of CC v South India Television P. Ltd. - 2007 (214) ELT 3 (SC) and Collector v East Punjab Traders - 1997 (89) ELT 11 (SC) which require that authenticated copies of the foreign documents should be produced by customs and (iii) Thirdly, the report in the present case is not being relied upo .....

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the statement. It is clear from the statement that as far as the import price is concerned it was US $ 1 per piece and that this was the actual import price and also that the export price of US $ 4 per piece was the actual export price. When US $ 4 per piece is stated to be the actual export price it does not follow that US $ 1 per piece was not the actual import price. An export price can be higher than the import price. What is significant is that there is no statement that anything over and .....

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ted goods were also made by Rico Gems to the foreign supplier. Therefore for all the purposes the Rico Gems is the importer and Telebrand not involved either in the import or in payments thereagainst, therefore Telebrand could not have been implicated in the present case. 7. We have carefully considered the submissions made by both the sides and perused the records. 8. The demand of customs duty and consequential interest, penalties, confiscation etc confirmed on the charges of undervaluation of .....

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ii) In the statement dated 18.03.2010 Shri Narendra Mehta has admitted the undervaluation. (iv) There is substantial difference in price declared to the custom, price at which goods sold to M/s Telebrand and the price at which the imported goods sold by M/s Telebrand to the ultimate customers. (v) As per the report dated 14.05.2007 of Hongkong Customs the price shown in the report is much higher than the price declared before the Indian Customs. (vi) Though the value was once enhanced at the tim .....

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price of similar goods imported by M/s. Shreenath and M/s. GNG & Co. In the independent investigation against M/s. Rico Gems, no evidences as regard the undervaluation in respect of goods imported by the appellant M/s. Rico Gems were found, outcome of the investigation against M/s. Shreenath and M/s. GNG & Co. cannot be used for enhancement of value of the goods imported by M/s. Rico Gems. If the price of M/s. Shreenath and M/s. GNG & Co. is adopted, at the most it can be done consi .....

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e has to be adopted. In the present case, the department also accepted the contemporaneous import price at the time of clearance and assessment of the goods. Subsequently even if the price of M/s. Shreenath and M/s. GNG & Co. is considered, the situation will be there two contemporaneous value are available and according to Rule 5 and 6 of Customs Valuation Rules, 1988, the lowest of the value shall be adopted. Therefore even though it is assumed that price of the M/s. Shreenath and M/s. GNG .....

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, there was no reason to apply the higher contemporaneous value in the present case. As regard the issue that if the value is enhanced once, whether further enhancement is permissible. We are of the view that it is only possible when it is established that there is undervaluation and actual value has been suppressed. However, in the present case in our observations there is no positive evidence which establish the undervaluation. Therefore as per the settled legal position once value of imported .....

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2006 (203) ELT 561 (Tri. Del.)] In view of the above judgments, it is clear that once the value of imported goods has been enhanced the further enhancement is not permissible. In the present case the enhancement was admittedly on the basis of contemporaneous value of similar goods, therefore enhancement is not correct and the above judgments squarely applicable in the facts of the present case. It is pertinent to note that the Show cause notice do not even allege that G.N.G. & Co. and Shreen .....

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r, 2008 whereas import of M/s. Shreenath and M/s. GNG & Co. were made only up to march, 2006. For the period April, 2006 to November, 2008 there were contemporaneous import available of other importer and the value of the import of the appellant had already been enhanced based on such contemporaneous import. In this fact, during the period April, 2006 to November, 2008 the contemporaneous import of M/s. Shreenath and M/s. GNG & Co. were not in existence, therefore there is no reason to a .....

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nt case those statements were only evidence on which heavy reliance was placed for applying the value of M/s. Shreenath and M/s. GNG & Co. to the import of the appellant. On the basis of cross examination when the representatives have retracted their statements there is no basis for reliance on the said statements and contents thereof for alleging the undervaluation in respect of import made by the appellant. 8.2 The Ld. Adjudicating Authority has also considered the fact that as regard the .....

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g the price with the foreign supplier and in such negotiation nothing came on record that the actual price and the price declared are different. Mere price negotiation by a person, other than importer, with the foreign supplier alone is not an act of offence or it does not establish the undervaluation of the goods. We observed that neither in any of the statement of the witnesses nor in documentary evidences show that due to negotiation the either M/s. Telebrand or importer M/s. Rico gems have m .....

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dicating Authority relied upon the statement dated 18/3/2010 of Shri Narendra Mehta, the proprietor of the M/s. Rico Gems wherein Shri Mehta has admitted the undervaluation. We find that Shri Mehta has filed an affidavit dated 19/3/2010 wherein he explained under what circumstances the statement was recorded and he stated that statement was recorded under coercion and threat. The adjudicating authority rejecting the said affidavit given reasoning that though the affidavit was made immediately af .....

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called admission of Shri Narendra Mehta is not supported by any corroborative evidences, therefore it cannot be said that Shri Narendra Mehta accepted the undervaluation and the said statement cannot be accepted as evidence. As per the ratio laid down by the Tribunal in Manoj Kumar vs Commissioner of Customs (Kanpur), 2004 (176) ELT 811 and D.M. Gears P. Ltd v CCE - 2002 (141) ELT 514, such statements not bearing signatures of any gazette officer do not satisfy the requirements of section 108 of .....

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stly even if there is difference between import price and sale price of the said goods in the domestic market, the difference cannot be made the basis for holding that the price of the imported goods has been undervalued. In the present case there is no material evidence on record to show that there is flow back of amount over and above the sale value between importer and M/s. Telebrand India. It was found that the importer has sold the goods on principal to principal basis by raising invoices t .....

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ich is actual import price and USD 4 per pc is the actual export price. Therefore proprietor has not accepted that USD 4 per pc is the import price. We find that obviously the export price will be much higher than import price of the goods and due to this reason it is not correct to hold that USD 4 per pc is the actual import price, particularly in the absence of any evidence of price over and above USD 1 per pc. 8.5 In respect of one item i.e. inflatable Sofa bed Ld. Adjudicating authority refe .....

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to third party or use in any proceedings. The covering letter of Consulate General of India to the DRI makes it clear that said letter bearing the said caveat and if caveat report has to be obtained the procedure under mutual legal assistance ordinance, Hong Kong SAR ought to be followed by DRI. It is not on record that DRI has followed the procedure or made any effort to procure the caveat free report. It is also fact that authenticated copies of invoices of Creative Nation International Ltd., .....

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t - (i) is produced by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law, or (ii) has been received from any place outside India in the course of investigation of any offence alleged to have been committed by any person under this Act, and such document is tendered by the prosecution in evidence against him or against him and any other person who is tried jointly with him, the court shall - (a) presume, unless the contr .....

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hat it is not duly stamped, if such document is otherwise admissible in evidence; (c) in a case falling under clause (i) also presume, unless the contrary is proved, the truth of the contents of such document.] 2 [Explanation. - For the purposes of this section, "document" includes inventories, photographs and lists certified by a Magistrate under sub-section (1C) of section 110 ]. In terms of clear provisions of above Section 139, the documents provided from outside India can be admit .....

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ticated copies of the invoices of Creative Nations International Limited, Philippines referred to in the letter of 14 th May 2007 of Deputy Head, Trade Investigation, Hong Kong have been received and hence Section 139 is not applicable. As held by the Supreme Court in the case of Collector v East Punjab Traders 1997 (89) ELT 11 (SC), for the presumption under Section 139 to apply, authenticated copies of the invoices referred to in the report ought to have been obtained from the Hong Kong Custom .....

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LT 3 (SC) and Collector vs East Punjab Traders - 1997 (89) ELT 11 (SC) the authenticated copies of the foreign documents should have been produced by Customs. 8.6 In view of the above facts and legal position, mere unsigned annexure without copies of invoices referred thereunder, this report cannot be accepted as evidence. 9. From the above discussions, it is clear that the revenue could not establish the undervaluation with tangible evidence. In this position, the valuation of the imported good .....

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e price actually charged by the supplier and paid by the importer. In any event, by virtue of Rules 5 and 6, the lowest value of contemporaneous imports accepted by the department has to be adopted and accepted. 10. The appellants have also made submission on the issue of invocation of larger period of limitation. It is seen that the period of importation is in 2005-06 to 2008, and the Show Cause Notice was issued on 31-8-2010, invoking larger period of limitation prescribed in the proviso to Se .....

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ording of these statements and recovery of the said documents by the department, and yet the assessments were finalized on the basis of contemporaneous value. The basis on which the value of the Appellants imports is sought to be again enhanced by the present Show Cause Notice was already available with the department at the time of assessment of duty made by relying on contemporaneous value. It is admitted fact that the value was sought to be enhanced by the department on the basis of contempor .....

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