TMI Blog2018 (12) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the value as held by the lower authorities, is not sustainable - appeal allowed - decided in favor of appellant. - Appeal No. C/12341/2018–DB, (Application No. C/EH/10687/2018) - A/12702/2018 - Dated:- 4-12-2018 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri N.D. George, Advocate for the Appellant Shri K.J. Kinariwala, Assistant Commissioner (AR) for the Respondent ORDER Per: Ramesh Nair The brief facts of the case are that the appellant are engaged in the trading activity. They imported a consignment of ordinary belts (PU Belts) and filed a bill of entry No. 9127790 dated 05.05.2015. The assessable value of the said goods was declared as ₹ 7,34,568/- i.e. at the rate of US$ 0.083 per piece of belt. The said goods were detained under Panchanama dated 15.05.2015 by the officers of SIIB Mundra. The detained goods were handed over to the Manager of CFS (Seabird) Mundra under Supratnama dated 15.05.2015 and was released provisionally on furnishing bond and bank guarantee. The sample of the goods were drawn from the live consignment and forwarded to chemical examiner, Kutch Customs, Kandla for testing. On the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... George, ld. Counsel appearing on behalf of the appellant submits that the entire case of undervaluation was made on the basis of DGOV Circular dated 07.08.2013 wherein an apprehension was made that there is likelihood of undervaluation in case of import of PU Belts. He submits that only on the basis of Circular, no case of undervaluation can be made out. The said Circular is for the customs authorities but not a concluding authority to book a case. In the present, no independent evidence was brought on record. He submits that the appellant have been importing the same goods earlier at the same price which were accepted by the customs authorities. He submits that though there is mention about the price adopted by the Customs on the basis of NIDB data but no bill of entry of contemporaneous import was provided. Even as per the Circular, if there is any doubt about the value of PU Belts, the customs authorities were supposed to carry out the market enquiry. In the present case, no material except an unauthenticated/unsigned bill was adduced to show that any market enquiry was properly conducted. Therefore, enhancement of the value is arbitrary and without any basis. He further submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned nor authenticated hence, the same cannot be relied as market survey report. There is no case of the Revenue that the appellant have made a payment over and above the value declared in their bills of entry/invoices. In similar case, this Tribunal time and again has taken a view that enhancement of the value without proper evidence is not correct and legal. In the case CC, Calcutta vs. South India Television Pvt. Limited (supra), held as under:- 6. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Section 2(41), value is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. The Customs Valuation Rules, 1988 have been framed only in respect of imported goods. There are no rules governing the valuation of export goods. That must be done based on Section 14 itself. In the present case, the Department has charged the respondent-importer alleging mis-declaration regarding the price. There is no allegation of mis-declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Under-valuation has to be proved. If the charge of under-valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries, collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under-valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of under-valuation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the Department received from the Hong Kong supplier a Fax message dated 22-7-1996. That was produced before the Commissioner. In that message, he had explained that the manufacturer of the impugned goods was getting export rebates and, therefore, it is possible that the manufacturer had over-invoiced the price in order to claim more rebate. The goods were of Chinese origin. In the Fax message it is further stated by the foreign supplier that he was required to show the export value on the higher side in order to claim the incentives given by his Government. This explanation of the foreign supplier, in the present case, had been accepted by the Commissioner. In his order, the Commissioner has not ruled out over-invoicing of the export value by the foreign supplier in order to obtain incentives from his Government. For the aforestated reasons, we find no infirmity in the impugned judgment of the Tribunal. 8. Before concluding, we may point out that in the present case at the stage of show cause notice, the Department invoked Rule 8 on the ground that the invoice submitted by the importer was incorrect. In Eicher Tractors (supra) this Court observed that Rule 4(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been noticed during the relevant period, the value could not be determined under Rule 5 and 6 of the Customs (Valuation) Rules. No data was available for duty paid imports or for condition of value of goods under Rules 7 and 7A. The importer has also failed to furnish the manufacturers inputs in terms of Rule 10A. Hence the values have to be determined under Rule 8 of the Customs (Valuation) Rules. He has further stated that the market enquiries revealed that the MRP value of the imported goods is equal to ₹ 27,89,680/- by working backwards, by allowing a margin of 40% from the wholesaler to the retailer and further 50% margin from the importer to the wholesaler and by deducting duty element. The total CIF value was fixed at ₹ 8,07,671/- on 22,000 US $ Rs.(16,739.30) The differential duty was worked out to ₹ 65,11,706/- It is seen that the goods imported by appellants are assorted chocolates and are from various countries. Even though the original authority has stated that market enquiries have been made, there is no indication that a copy of the market enquiry made by the department has been furnished to the appellant for his rebuttal or otherwise. The market en ..... 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