TMI Blog2018 (12) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... Per: Ramesh Nair The common facts in both the appeals are that the appellants are engaged in the import and trading of ordinary belts (PU Belts). The case of the department is that the appellant undervalued the said imported goods. The details such as B/E, The value, quantity, value declared, value enhanced and differential duty etc. is given below :- Liberty Enterprises (Table -1) B/E No Date Quantity Assess- able Value at ₹ 18.58 per pc Basic duty at 10.00% CVD at 12% Edu Cess @ 2% HSS @ 1.00% Addi tional duty @ 4% Total amount of duty leviable Duty amount already paid Amount of difference in duty 728616905.11.14 132000 2452560 245256 323738 11380 5690 121545 707609 265767 441842 757438303.12.14 113400 2106972 210697 278120 9776 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 135000 1044714 2508300 301419 422272 Total 808200 6232264 15016356 1789121 2534376 Sumit Enterprises (Table -2) S. No B/E No. Date Qty Declared A.V. A.V. at ₹ 18.58 per pc Duty paid Differential duty 1 7911219 06.01. 2015 134700 1041576 2502726 300514 421569 The Customs Department on the basis of DGOV Circular No. Val/Tech/25/2013 dated 07.08.2013 which was issued for suspected under valuation in import of PU Belts, investigated the case and applying the NIDB data, enhanced the value of the aforesaid imported goods and demanded differential duty. For confirmation of demand, value of contemporaneous imports and market survey were relied upon. Being aggrieved by the impugned orders, the appellant fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DGOV Circular which categorically states that market enquiry has to be conducted. In the present case, there is nothing on record that customs authorities have properly conducted a market enquiry. There is no report such as Panchanama of market enquiry on record nor was any report provided to the appellant. The Revenue only relied on one Bill which is neither signed 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 gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interlocutory Application No. 4 in the present civil appeal, an application was moved by the importer calling upon the Department to produce the original declaration in the Court. No reply has been filed to the said I.A. till date. In the circumstances, we are of the view that the Department had erred in rejecting the invoice submitted by the importer herein as incorrect. Further, 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 Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority in para 8 of his order dated 24-1-2002, has stated the manner of arriving at the assessable value of the imported goods. According to him the value declared by the appellants was very low. Hence the same could not be accepted as per rule 4 of the Customs (Valuation) Rules, 1988. Since the goods imported are of various countries origin and brand and no identical imports have 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue. Only provision for fixing certain assessable value for the purpose of assessment is Section 14(2) of the Customs Act, 1962 under which the Central Government by a notification fixes the tariff values on which the imported goods are to be assessed. Such assessable values cannot be fixed by the assessing officer on their own. 6. It is further observed that on the same or approximately same price, various consignments were imported which have been accepted by the department. Copies of some of Bills of Entry submitted by the appellants which are placed in the appeal records. Even if price of contemporaneous import to be adopted, as per the above datas, no enhancement can be made. Moreover, in the appellant s own case, for the same goods, value was disputed. Matter travelled up to Commissioner (Appeals) who vide order No. 122{Gr.II(HK)}/2016 (JNCH)-Appeal-II dated 20.04.2016 allowed the appeal which was accepted by the Revenue as there is no record of challenging the said order by the department. 7. As per our above discussions, in our considered views the enhancement of the value as held by the lower authorities, is not sustainable. Accordingly the impugned order is set- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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