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Samson Maritime Ltd., Mohan Samant, Laksminarayan Iyer Versus CC (I) , Mumbai

2016 (11) TMI 137 - CESTAT MUMBAI

Demand of differential duty - Penalty - Valuation - Notification No. 21/2002-Cus DATED 1/3/2002 - Rule 10(2(a)(i) of Customs Valuation (determination of price of imported goods)Rules, 2007 - Held that: - the details given which is supported by relevant invoices, the actual cost of transportation expenses was ascertained, therefore Ld. Adjudicating authority should not have resorted to proviso (i) of Rule 10(2)(a) accordingly there was no need to add 20% of FOB value - On the basis of actual expe .....

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3,962/- was paid in respect of Tug, however Ld. Adjudicating authority added entire premium of ₹ 8,51,175/-, actual insurance premium born by the appellant can only be added in the FOB value to arrive at assessable value - From the documents submitted by the appellant there is no dispute that actual premium paid by the appellant is ₹ 2,63,962/- and not ₹ 8,51,175/-. - As regard the penalties imposed on the appellant company, as well as Director and employee of the appellant c .....

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-89994/16/CB - Dated:- 2-9-2016 - Mr Ramesh Nair, Member(Judicial) and Mr. C.J. Mathew, Member(Technical) Shri. S.N. Kantawala, Advocate for the Appellants Shri. D.S. Maan, Asstt. Commissioner(A.R.) for the Respondent ORDER The appellants had imported a new self propelled tug Ocean Zircon . For the said import they signed Memorandum of Agreement (MOA) dated 28/3/2011 with POET Shipbuilding & Engineering Pte Ltd, Singapore(seller). As per the MOA the purchase price was USD 5180000.00. The pla .....

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der CTH 89040000 The DRI has investigated the case on the basis of statements of various persons such as Shri. Mohan Samant, Managing Director of the appellant company, Shri. Laxminarayan Iyer, President (Commercial), Shri. Karunakar Venkat Poojary, General Manager of M/s. GAC Shipping (I) Pvt Ltd Mumbai were recorded. In the investigation it was revealed that the value of USD 5258397.64(CIF) declared is CIF Mumbai. In the investigation it was found that the delivery of the Tug was China and Tug .....

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on the enhanced value including the aforesaid element, differential duty of ₹ 68,30,153/- was confirmed, penalty of equal amount under Section 114A was imposed. Penalty of ₹ 5 lacs each were imposed upon Shri. Mohan Samant and Shri. Laksminarayan Iyer under Section 112(a) and further, penalty of ₹ 2.5 lacs each were imposed upon Shri. Mohan Samant and Shri. Laksminarayan Iyer under Section 114AA of the Customs Act, 1962 and amount of ₹ 20 lacs already paid was appropriate .....

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n propulsion therefore expenses on account of transport from China to Singapore was not included in the invoice therefore the same was escaped while declaring the price. He submits that there was no malafide intention on the part of the importer in declaring the value. He submits that dispute remained the only the quantum of loading in the value. The adjudicating authority despite giving him actual expenses on account of freight and other expenses straight away loaded 20% of the FOB value as fre .....

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added as freight only in case where the actual cost of the freight is not available. The actual cost of the transportation, insurance and other expenses pertaining to the transport of Tug from China to Singapore was submitted alongwith all the relevant and supporting invoice. The adjudicating authority has discarded on the flimsy reasons. He submits that the issue involved in the present case is only minor variations of valuation which is not with intention to evade custom duty but the mistake i .....

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ellant company are not sustainable. He further submits that appellant has calculated and presented before the adjudicating authority the differential duty of ₹ 12 lacs approximately for which not only the actual cost of freight and insurance but all other actual expenses were taken into account for arriving at differential duty. The adjudicating authority discarded the same on the ground that invoice in respect of expenses are of the subsequent dates i.e. after Tug started its journey from .....

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he period of voyage though the higher premium was mentioned in the policy but total premium mentioned in the policy cannot be added as the said amount as the same was neither paid by the appellant nor entire is related to transit period of Tug till it arrive in India, therefore adjudicating authority made serious error by adding entire insurance premium in the assessable value. In support, he placed reliance on this Tribunals decision in the case of Prince Marine Transport Services Pvt Ltd & .....

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and thereafter Singapore to Mumbai. The dispute raised was that appellant has not included the expenses such as cost of transportation, insurance incurred during the transportation of Tug from China to Singapore. However the declared value is CIF value from Singapore to Mumbai. The insurance freight and other expenses for the transportation of Tug from port of delivery that is China to Singapore was not added in the value. On pointing out by the department, the appellant admitted mistake and dep .....

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tual SGD 1143.68 converted to USD@ 1 USD= 1.206SGD) 948.48 43,298.00 Invoice No. 5 colly: Poet Shipbuilding & Engineers Pte Ltd RMB42236 Poet Shipbuilding & Engineers Pte RMB 17400 (actual RMB 59.636 converted to USD @ 1USD -6.25 RMB) Poet Shipbuilding & Engineers Pte USD 113475.60 Poet Shipbuilding & Engineers Pte USD73073.98 1,96,096.34 89,51,798.00 Invoice No. 6- Insurance Policy for Hull and Machinery -Rs. 242,044 from 15.05.2011 to 14.08.2011 i.e. 242.044/91 days *43 days(i. .....

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of expenses already declared in the B/L 37,102.81 11,141.76 163.50 413.00 48,821.07 16,93,743.00 5,08,621.00 7,464.00 18,853.00 22,28,081.00 Freight AND insurance considered in CIF value as per Bill of Entry: Freight USD 77617.64 Insurance:USD 780 78,397.64 35,78,853.00 Total (B) 1,87,710.04 85,68,964.00 Differential duty as may be charged @ 15.15%-(C) 12,98,198.00 We find that as regard all the above mentioned details of expenses, the appellant have submitted the relevant invoices. As per Rule .....

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submission of the appellant merely for the reason that the invoice of fuel etc were issued subsequent to the start of journey of the Tug from China. In this regard appellants submission is that the invoice were issued by the seller at Singapore office therefore there is no reason for discarding the invoices. We find that merely because the invoice in respect of fuel etc. issued subsequently. The genuineness of the invoices cannot be disputed particularly when the Adjudicating authority did not .....

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picked up premium amount mentioned in the Hull Marine Policy and added in the value, whereas appellant has shown on the basis of the documentary evidence of insurance company M/s. HDFC Ergo, General Insurance that the total premium of Rs, 2,63,962/- was paid in respect of Tug, however Ld. Adjudicating authority added entire premium of ₹ 8,51,175/-, actual insurance premium born by the appellant can only be added in the FOB value to arrive at assessable value. From the documents submitted b .....

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eld as under: 5.3 As regards the re-determination of value, we find that the Commissioner has adopted a rate of 21.125% of the cost towards freight and insurance. The appellant had given details of the expenditure incurred by them for the transport of the vessel from Dubai to India. In such a situation, the Commissioner could not have added freight and insurance @21.125%. Since the vessel had come on its own motion, only the actual cost of transportation incurred should have been added for deter .....

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