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2018 (12) TMI 448

were declared as non-woven fabric (stock lot) whereas the description in the Bill of Lading set to have been recovered from the container, the description was woven fabric (stock lot) - scope of SCN. - Held that:- The Department has charged the respondent- importer alleging mis-declaration regarding the price. There is no allegation of mis-declaration in the context of the description of the goods. In the present case, the allegation is of under-invoicing. The charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. - The transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for off .....

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. ANJANI KUMAR Briefly stated the facts of the case are that the appellants presented 3 Bills of Entry, i.e. 121757, 121758 and 121759 all dated 07.01.2003, on import of "Non-Woven Interlining", intended to be used for Apparel, from M/s ASC International, USA. During May 2003, SIB, Cochin allegedly found a Bill of Lading during examination of a consignment imported during 2002. It was alleged that the BL showed the manufacturer of goods to be M/s Milliken & Co. USA and supplied to M/s ASC International, USA and had its intended destination with the Appellant; the value indicated in this alleged Bill of Lading showed that the value declared by the Appellant was on the lower side indicating the CIF prices whereas the alleged bill of lading showed the price to be on FOB basis. The Appellants imported one more consignment vide by BOE No. 126158 and 126159 both dated 15.5.2003. The department on examination of consignments, found an invoice as well as another bill of lading which showed under valuation as well as mis-declaration. 2. The matter was referred by Cochin Customs to DRI who in turn referred to US Customs. The report received indicated that the goods were essenti .....

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, Cochin supplied along with the show cause notice is produced as Annexure - III. 3.3. The case of the department is that the price indicated in the BOE is the FOB price and not CIF price. If that be so, the Appellant would have separately paid the freighters. The department has no case that such money was paid by the Appellant; neither could they establish any money trail which could justify such conclusion. Even if transaction value could not be accepted for some reason, then too price could be arrived at by sequentially following the procedure laid down in Rules 4 to 8 of the 1988 Rules. That having not been done, re-fixation of price in the impugned order is liable to be set aside. 3.4. Reliance on invoice at Annexure-V is misplaced. The goods, as can be seen in the invoice, are "full width-scrap", "full width scrap- mixed" and reject-scrap-mixed, whereas the impugned goods are Non-Woven Interlining". The Commissioner has no case that these goods are similar to or identical to the good imported. No effort has been made to ascertain the nature of goods imported by the Appellant. Therefore no reliance can be placed on invoice at Annexure-V. 3.5. It is sub .....

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lue of imported goods for the purpose of Section 14 of the Customs Act. The price is when sold for export to India. The US Customs report has confirmed the fact that the price of goods when sold for export and when exported to India to be US dollars 0.18 per KG CIF, Cochin. There is no allegation that there has been any payment effected other than what has been mentioned as price when exported to India as evidenced by the purchase order and the invoice. Therefore, the declared price of US dollars 0.18 per KG CIF, Cochin is the transaction value as per law and fact. The adjudicating authority is not permitted by law to bypass this vital evidence revealed by the enquiry conducted by the authorities revealed that the real value of the goods under import by the appellant is dollars 0.18 KG CIF, Cochin for the purpose of section 14 (1) of the Customs Act. Hence this appeal on the following among other: - 3.8. Even assuming that the price indicated the FOB value and not the CIF value, then too going by Rule 9(2)(i), the cost of transport could only be 20 % of the FOB value of the goods. Therefore, assuming 0.18$ to be the FOB value, 20% thereof 0.036$ could alone be added, taking the val .....

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hority) does not pertain to the appellant but to some other shipment from Hong Kong to USA and as the Bill of Lading number mentioned in the said recovered document is not the actual Bill of Lading under which the consignment was imported by the appellant from USA to Cochin as reflected in the Bill of Entry presented before Cochin Customs. The recovered document therefore cannot in any way be related to the appellant nor can be held to be incriminating evidence. (iii). The Bill of Lading under which the goods were actually imported into India from USA presented along with the Bill of Entry. Freight manifest furnished by the steamer lines in pursuance to the adjudicating authorities enquiries reveal the fact that the freight is pre-paid. No evidence of payment of freight by the appellant separately and in addition to the invoice price has been provided by any of the parties with whom the adjudicating authority carried out his enquiries or unearthed by the customs officers. The only evidence available on record is the licit payment effected by the appellant as per the invoice and purchase order presented along with the Bill of Entry which is US Dollars 0.18/Kg CIF, Cochin. 3.11. What .....

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m the container, the description was woven fabric (stock lot). The Commissioner observed that on perusal of the examination reports in respect of the Bills of Entry, it is clear that there is no mis-declaration, evidence and that the Bills of Lading received during the investigation are not directly relevant to the issue on hand. 5.1. We find, however, that Commissioner has concluded that there was under valuation on the part of the appellants. Quoting invoice dated 10.03.2003 raised M/s. PGI non-woven on M/s. ASC International and Master Packing List with Bill of Lading No. 4050229- 239224 dated 10.03.2003, Commissioner found that these documents pertain to goods covered under Bill of Entry No. 121659 dated 15.05.2003 since the container No. and Seal No. are tallying. The value shows in the invoice recovered was USD 0.22/KG whereas the value declared in the invoice No.12171 was only USD 0.1/KG only. The Commissioner, however, gave a finding that this invoice was though raised in the course of domestic trade, is indicative of the FOB value. 5.2. Thereafter, the Commissioner proceeded of the valuation on the basis of the freight charges obtained from various streamer lines in respec .....

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ed by them, he has not adduced any evidence to arrive at the figures they have taken for the purpose of arriving at the differential rate of duty. The fact that there were contemporaneous imports at about the same time by other importers in the country was totally ignored. We find that the learned Commissioner has not given any findings on the contemporaneous imports. In fact, the learned Commissioner has not given any finding as to under which provision of Customs Valuation Rules, the declared values of the importer were being revised. Such a non-speaking order does not stand the testimony of law. This Tribunal and the various Courts have enunciated the law regarding valuation of import goods in many cases and it was firmly held that the onus to prove that the transaction value was liable for rejection and that the value adopted is correct is squarely on the Revenue. We find that no such onus has been discharged by the Revenue. No evidence has been shown that there were contemporaneous imports at higher price. Under such circumstances, the value adopted by the adjudicating authority is liable to be held unsubstantiated and unreasonable. 5.5. The issue of rejection of assessable va .....

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time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e., at the time when the goods reach the customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or 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 .....

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the Department has relied upon export declaration made by the foreign supplier in Hong Kong. In this connection, we find that letters were addressed by the Department to the Indian Commission which, in turn, requested detailed investigations to be carried out by Hong Kong Customs Department. The Indian Commission has forwarded the export declarations in original to the Customs Department in India. One such letter is dated 19.9.1996. In the present case, the importer has alleged that the original declarations were with the Department. Those certain portions of the originals were not shown to the importer despite the importer calling upon the adjudicating authority to do so. Further, by way of 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 Com .....

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nt is allowed to the original equipment manufacturers who import for fitment in their manufactured products and for this build up inventories with sizeable orders after securing favorable prices between various competitors but as regards canvassers and Skefko, who import in even greater bulk for the purposes of only trading, the policy envisaged that they may even secure lower price particularly if they generated additional volumes of sales. The documents seized during the search and seizure that were produced by the appellants before the customs authorities (genuineness of which was accepted by the Addl. Collector of Customs) show that apart from Mirah Exports a number of other importers namely, Skefko, Amul Engg., Krishna Engg. work, Delhi Jayaveer Forge, Davangere, Ajay Trading Co., Delhi Ramgopal Lachmi Narayan, Bombay Sanmukh Engineering Industries, etc. has also imported comparable quantities of similar bearings at the same or lesser prices as that of Mirah Exports and that discount from 50% to 70% on the list prices was the normal invoice price for a number of unconnected importers during the period. The Collector of Customs, while passing the order dated December 5, 1986 an .....

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the invoice produced by an importer is not sufficient to reject it as evidence of the value of imported goods. The doubt held by the officer concerned has to be based on some material evidence and is not to be formed on a mere suspicion or speculation. We may hasten to add that although strict rules of evidence do not apply to adjudication proceedings under the Act, yet the Adjudicating Authority has to examine the probative value of the documents on which reliance is sought to be placed by the revenue. It is well settled that the onus to prove under- valuation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct. 12. In Eicher Tractors Ltd. (supra), relied upon by the Tribunal, this Court had held that the principle for valuation of imported goods is found in Section 14(1) of the Act which provides for the determination of the assessable value on the basis of the international sale price. Under the said Act, customs duty is chargeable on goods. According to Section 14(1), the assessme .....

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efore rejecting the invoice price. The Department has to find out whether there are any imports of identical goods or similar goods at a higher price around of same time unless the evidence is gathered in that regard. The question of rejecting the value does not arise. The invoice price has to be accepted in such circumstances if the charge under valuation cannot be supporter either by evidence or information about comparable imports, the benefit of doubt must go to the importer. In the instant case, the Commissioner on the one hand held that there is no mis-declaration of description on the part of the appellants. He has not adduced any evidence of payment by the appellants over and above the invoice price. No proof of payment either to the foreign suppliers or to the steamer agents for transportation. Differential duty payable has been arrived only on the basis of certain data called for from the steamer agents. We find that the learned Commissioner has not only traversed beyond the SCN but also has not given due consideration to the contemporaneous imports, if any, of identical or similar goods. Therefore, we find that the impugned order does not stand the scrutiny of law. 8. In .....

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