TMI Blog2016 (2) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... much as rejection of the transaction value was clearly within the competence of the primary adjudicating authority. To enhance the value to the same level at which the goods were assessed in the appellants own case and with his consent when imported just a couple of months earlier can in no way be called unreasonable comparison with contemporaneous imports. - Demand confirmed - Decided against the assessee. The primary adjudication order is not a detailed one because the appellant did not want to reply the Show Cause Notice or appeared for hearing and therefore there was no arguments to rebut from the appellants side. - Customs Appeal No. 360, 500 & 501/2010 - Final Order No. 53973-53975/2015-Cus(Br) - Dated:- 21-10-2015 - SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND MR. R K SINGH, MEMBER (TECHNICAL) For the Petitioner : Shri K K Sharma, Shri Tarun Chawla, Advocates For the Respondent : Shri Amreesh Jain, AR ORDER PER R K SINGH : These appeals have been filed by Shri Dharam Pal Aggarwal, Shri Praveen Kumar, proprietor of M/s. Praveen Kumar Hosiery and Shri Salil Magoo against order-in-original dated 24.05.2010 in terms of which the following order w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prop. of M/s. Parveen Kumar Hosiery, Ludhiana under section 112 (a) and (b) of the Customs Act, 1962. 42(h) Bank Guarantee No. 0506507BG0000295 dated 11.10.07 for ₹ 2,00,000/- issued by State Bank of India and submitted by the Noticee to the Customs at Ludhiana against advance authorisation No. 3010053380 dated 08.10.2007, is ordered to be appropriated towards the duty interest liabilities of the noticee. 43(a). The goods i.e. 10,000 kgs of 100% of 100$ Nylon Lurex Yarn imported vide Bill of Entry No. 118910 dated 31.12.2007 are classified as 100% Nylon Lurex Yarn under CTH 5606.0090, instead of 100% Nylon Yarn under CTH 540219890 as declared by the noticee. 43(b) The total declared assessable value ₹ 11,26,958/- of the goods i.e. 10,000 Kgs. of 100% Nylon Lurex Yarn imported vide bill of entry No. 118910 dated 31.12.07 is rejected under Section 14 of the Customs Act, 1962 read with Rule 4 and 10A of the Customs Valuation (Determination of Prices of the Imported Goods) Rules, 1988 and enhanced to ₹ 21,93,543/- under Section 14 of the Act Rule 4 of Customs Valuation (Determination of Prices of the Imported Goods) Rules, 1988 as amended from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TH 5602), mis-declared the description (as 100% nylon yarn) and value and cleared the same duty free under the said advance authorisation and was diverting it in the open market instead of using the same in the manufacture of export goods. It also came out during the investigation that the appellant did not have necessary machinery to carry out the manufacture of export goods, from 100% nylon yarn allowed to be imported duty free under advance authorisation and was also sending the differential amount to the supplier to cover undervaluation via hawala transaction. Shri Salil Kumar Magoo, son of Shri Praveen Kumar admitted in his statement that he was looking after the day to day business of M/s. Praveen Kumar Hosiery and admitted to not having manufacturing facility, mis-declaration, undervaluation, hawala payment and diversion of imported goods. Shri Dharampal Aggarwal was the indenter, who admitted that Shri Praveen Kumar had requested him that the description of yarn should be shown as 100% nylon yarn 1/14 NM in place of 100% nylon lurex yarn 1/14 NM and value should also be adjusted and accordingly he had asked the overseas supplier to do so. E-mails recovered from the computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pal Agarwal wherein he admitted that Shri Praveen Kumar had asked him that the goods should be described as 100% nylon yarn instead of 100% nylon lurex yarn and that he accordingly advised the supplier to do so. Shri Magoo also admitted that M/s. Praveen Kumar Hosiery did not have machinery to manufacture the export goods out of the 100% nylon yarn. Shri Magoo also admitted that the goods were under-valued and the differential amount was sent through hawala. He also clearly admitted that the goods were imported for diverting and were sold to various buyers. Not only that, the job workers who, the appellant M/s. Praveen Kumar Hosiery, claimed to have manufactured the goods for it, categorically stated that they did not do so or the goods manufactured were from domestically sourced raw material. E-mails recovered from the appellants account corroborate these details. In his statement Shri Magoo, who is son of proprietor of M/s. Praveen Kumar Hosiery admitted that he was looking after the day-to-day functioning of M/s. Praveen Kumar Hosiery and in his subsequent statement, he admitted that the earlier statements dated 05.11.2007 and 06.11.2007 were correct and voluntary. Thus, his co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Act, 1962 for inviting penalty thereunder. We find that having regard to the nature and magnitude of the offence and in view of the role played by the appellant, the penalties imposed are in no way disproportionate. 6. In view of the foregoing, we find that the order of confiscation and demand of duty and also imposition of penalties on the appellants ordered vide the impugned order are fully justified, reasonable and sustainable and therefore invite no appellate interference. Accordingly, the appeals are dismissed. (Ashok Jindal) Member (Judicial) And (R.K. Singh) Member (Technical) 6. The appellant has essentially contended that (i) acceptance of enhanced value does not preclude it from challenging the same by way of appeal. (ii) The duty on the enhanced value was paid under protest. (iii) The evidence of contemporaneous imports as reflected in the NIDB data cannot be the criteria for enhancing the value is the NIDB data does not have a column for declared price. (iv) DRI alert was based on investigations which did not concern the appellant. Further DRI alert itself stated that it was a guideline. (v) The assessment was arbitrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accordingly. 9. We find that the primary adjudicating authority passed a speaking order wherein it clearly stated that the declared values are liable to be rejected under Rule 12 of the Customs Valuation Rules, 2007 and relying on the recent past imports of the appellant itself assessed the value at US$ 2.80/KG, the Commissioner (Appeals) in a detailed order upheld the primary adjudication order. 10. The appellant has laid considerable stress on the point that there was no ground to reject the transaction value declared by the appellant.. We find that Section 14 (1) ibid clearly states that the value of the imported goods shall be the transaction value subject to such other conditions as may be specified in the rules made in this behalf. Rule 3 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 clearly lays down that the assessable value shall be the transaction value subject to rule 12. Rule 12 of the said rules clearly states as under:- 12. Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough it did not agree with the enhanced value, it was paying duty under protest and did not want any Show Cause Notice/personal hearing. It clearly means that the appellant did not want to counter/contest the grounds on which the enhancement was supposed/made. Having voluntarily foregone its right to contest the grounds on which the enhancement was made, it s inability/freedom to contest the enhancement gets severely restricted save when the enhancement is arbitrary or absurd. In the case of Signal Bearing Co. Vs. CCE, Delhi-IV (supra) it was held that guidelines for valuation of ball bearing issued by the mission of Customs Mumbai take into account average cost of material, wastage, manufacturing cost and other charges after extensive studies with cooperation/involvement of other digital authorities, prices observed in trade as well as other sources had legal bearing on assessment of ball bearings . The judgement of CESTAT in the case of Balaji International/Artex textiles (the appellant) No.C/A/52570 - 52612/2014 dated 19.06.2014 is of no avail because the judgement does not lay down any ratio at all and in the nature of summary observations/conclusions. It is settled law that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussed in CESTAT judgements in the case of Grand Metal Industries (supra) and DJP International Vs. CC, New Delhi [Final Order No. 52361/2015 dated 01.07.2015], wherein the implication for consenting for enhancement of value and of foregoing the requirement of a show cause noticeably personal hearing have been discussed. The other case laws cited by the appellant adversely impinge upon the reasoning above. It is worth noting that the value has been enhanced to US$ 2.80/KG when the declared value was US$ 1.90/KG to US$ 2.03/KG while imports made by the appellant itself were cleared during months of January and February, 2012 at the same date (US$ 2.80/KG) with the full consent of the appellant when the value declared was for example US$1.59/KG, US$ 1.58/KG. It shows that the price of the impugned goods did not decline from January/February, 2012 to April, 2012 (when the impugned imports took place). Therefore, to enhance the value to the same level at which the goods were assessed in the appellants own case and with his consent when imported just a couple of months earlier can in no way be called unreasonable comparison with contemporaneous imports. As has been held in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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