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2016 (3) TMI 513 - CESTAT NEW DELHI

2016 (3) TMI 513 - CESTAT NEW DELHI - 2016 (337) E.L.T. 397 (Tri. - Del.) - Proper authority for issuing show cause notice - Whether DRI is or not - Held that:- as per CESTAT order in the case of Bhagwati Components Manufacturing Co. vs. Commissioner of Customs [2016 (1) TMI 875 - CESTAT NEW DELHI], the show cause notice issued by DRI is valid. - Tenability of comparison of the value of contemporaneous import - Done without regard to the quality and quantity - Also the invoices used for comp .....

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ellant were out of the so-called stock lot. Also, the goods imported by others were at a much higher commercial level as has been mentioned by the appellant itself in its appeal. Therefore comparison with the price of such imports cannot cause any prejudice to the appellant because it can be nobody's case that the price would be higher for imports of larger quantities of such goods. - Imposition of redemption fine - Goods not available - Held that:- the goods which had been cleared without a .....

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ondent : Shri G. R. Singh, DR ORDER PER: R. K. SINGH: Appeal is filed against order original dated 08/01/2010 in terms of which the Commissioner of Customs passed the following order: 36. In view of the foregoing discussions and finding, I pass the following order: i) I reject the total declared assessable value of ₹ 44,86,48.90 of the goods imported by M/s Rudra Enterprises, from the port of Inland Container Depot, Tughlakabad, New Delhi under Section 14 of the Customs Act, 1962 read with .....

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. iii) I order to confirm the demand of ₹ 30,24,923/- under Section 28(2) of the Customs Act, 1962 by invoking the proviso to the Section 28(1) of the Customs Act, 1962 and order M/s Rudra Enterprises to pay the differential Customs duty amounting to ₹ 30,24,923/-, under Section 28(2) of the Customs Act, 1962. iv) I order appropriation of ₹ 12,187/- deposited by M/s Rudra Enterprises at the time of the provisional release of the seized goods against the amount as confirmed abov .....

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onal release of seized goods towards payment of the duty confirmed under Section 28(2) of the Customs Act, 1962. vii) I impose a penalty of ₹ 30,24,923/- under Section 114A of the Customs Act, 1962. Since, penalty is being imposed on the firm under 114A of the Customs Act, 1962, I refrain myself from imposing separate penalty on the firm under Section 112 of Section 1962 of the Act ibid. 38. I also order that: i) I reject the total declared assessable value ₹ 19,00,440/- of the goods .....

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nd the same being not available for confiscation, I impose a redemption fine of ₹ 5,00,000/- in lieu of confiscation. iii) I order to confirm the demand of ₹ 18,54,113/- under Section 28(2) of the Customs Act, 1962 by invoking the proviso to the Section 28(1) of the Customs Act, 1962 and order M/s Rudra Enterprises to pay the differential Customs duty amounting to ₹ 18,54,113/- under Section 28(2) of the Customs Act, 1962. iv) I order for recovery interest from M/s Rudra Enterp .....

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of Section 1962 of the Act ibid . 2. The fact of the case, in brief are as under The appellant imported artificial flowers in 17 consignments out of which 5 consignments were imported at Kolkata Custom House during the period February 2003 to June 2006 and 12 consignments imported at ICD, Tukhlakabad during the period April 2004 to August 2006. The goods were suspected to be undervalued. The statement of the proprietor of the appellant was recorded who in his 1st statement denied any valuation b .....

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ely, Himanshu Gupta, Sudhanshu Gupta and Deepak Aggarwal. Investigations conducted in this regard had conclusively proved that the said four importers wee also grossly undervaluing their imports of artificial flowers from China i.e. similar goods being imported from same country of origin. All the said three persons admitted in their statements of having undervalued their imports upto 70% of the actual value. The original invoices of Chinese suppliers of artificial flowers, retrieved during the .....

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ower Co. Ltd. China and No. KDS-Jun 06/005 issued by M/s Mikura Impex, Hongkong, China indicated average prices as USD 4.08/kg. USD 5.18/kg. USD 5.9/kg. USD 6.11/kg. respectively. Sudhanshu Gupta, the controller of this firm, when confronted with these invoices admitted that those invoices were the genuine one and that they had been under valuing all other imported consignments to the extent of 70%. Similarly, the other two partners also admitted to undervaluation in the imports of all the consi .....

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When the case was taken up today, there was no representation on behalf of the appellant nor was there any request for adjournment. Therefore we proceed to decide the case on merits. 5. In its appeal papers the appellant has essentially contended that: (a) the show cause notice was issued by D.R.I. which was not the proper authority for issuing the show cause notice and therefore the impugned order is a nullity. (b) comparison of the value of contemporaneous import was untenables because it was .....

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judgements in support of the aforesaid contentions. 7. The Ld. Department representatives reiterated the arguments contained and impugned order. 8. We have considered the contentions of both sides. 9. As regards the contention of the appellant that DRI was not the proper authority to issue the show cause notice, it has been held by CESTAT in the case of Bhagwati Components Manufacturing Co. vs. Commissioner of Customs vide order No. MO/52995/2015 dated 04.09.2015 in Appeal No. C/422 of 2010 that .....

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o value can be determined in terms of Rules 4 or 5 of the said Rules. As regards the contention of the appellant that the goods not identical to the goods the value of which is used for comparison and enhancement, even if the impugned goods were not identical to those the value of which was used for comparison in terms of Rule 5, there can be hardly any doubt that the impugned goods were similar to the goods imported by the other importers mentioned earlier the value of which was used for compar .....

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re produced; and (iii) produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods; It is .....

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other importers with which the comparison of value of the impugned goods has been made had any higher reputation or were any superior quality or that the goods imported by the appellant were out of the so-called stock lot. Further with regard to quality, it is seen that the value of the goods imported by others ranged from US dollar 4.08/kilogram to US$ 6.11/kilograms and for the purpose of valuing the impugned goods, the lowest value of that range has been adopted which implies that the adjudic .....

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t shows that the price of the impugned goods has been showing an inexorable declining trend and therefore adopting the price of US dollar 4.08/kilogram which was the lowest and the latest available in a declining trend in no way could/ would cause prejudice to the appellant. As regards the contention that the comparison can be made only when the goods imported by others with whom the comparison was made were at the same commercial level, we find that the goods imported by others were at a much h .....

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