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2020 (2) TMI 640

..... 28(1) (b) of the Customs Act, 1962 - demand of differential duty alongwith interest and penalty. HELD THAT:- The issue is squarely covered by the decision of tribunal in case of S.K. DHAWAN AND RAJEEV SETH, ESSFO IMPEX PVT. LTD. AND ESS DEE TRADING CO. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI [2016 (3) TMI 888 - CESTAT MUMBAI] where it was held that In the absence of any evidence it is not possible to accept the statement that the transaction value and the declared value were not actual transaction value. The distinction sought to be made by the learned Authorized Representative, do not address the crux of issue of rejection of transaction value. Without rejecting the transaction value, the application of any other rule, for re-determination of the value for the purpose of levy of Custom Duty is neither permissible nor admissible position in law as per the decision referred to by counsel for law. Appeal allowed - decided in favor of appellant. - Customs Appeal No. 85446 of 2013 - A/87044/2019 - 23-9-2019 - Hon ble Dr. D.M. Misra, Member (Judicial) And Hon ble Mr. Sanjiv Srivastava, Member (Technical) Shri Arthur Prem, Consultant, for the Appellant Shri Manoj Kumar, Assistan .....

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..... wo only) made by Sri Sai Imports and its Proprietor Shri R.K. Sharma against the differential duty, interest and/or penalty. 2.1 As is evident from the impugned order and the appeal filed, it is evident that this appeal has been filed by Proprietorship Concern and its Proprietor. Importers i.e. the Companies imported Brass Valve & Zinc Valves from China during the period 2007-08. 2.2 Based on the intelligence the import documents of appellant were scrutinized and it was found that the declared transaction value of the imported goods was even less than the cost of raw material i.e. Brass Scrap in case of Brass Valve and Zinc Ingots (LME price) for Zinc Valves. 2.3 In their statement recorded under Section 108 of Customs Act, 1962, Proprietor of the Companies accepted the fact about declaration of lower value than that of raw material cost. 2.4 On the basis of investigations made, the declared transaction value was rejected under the provisions of Rule 12 of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 and re-determined under Rule 8 ibid. 2.5 The redetermined value based on the cost of raw material plus 30% manufacturing cost was accepted by the appell .....

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..... authorities confirmed the demand of differential duty with interest and also imposed penalties. 2.9 Accordingly appellant have preferred this appeal before Tribunal. 3.1 We have heard Shri J Arthur Prem, Consultant for the appellant and Shri Manoj Kumar, Assistant Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellant, learned counsel submitted That- i. Issue involved in the matter is no longer res-integra. The tribunal has in similar case based on same similar investigations, decided the issue setting aside the demand made by alleging similar undervaluation, for the imports made by them during approximately the same period through Nhava Sheva and ICD Mulund [S K Dhawan [2016 (344) ELT 436 (TMum)]. This order of tribunal has been followed by the tribunal in case of Raghav Overseas and Others [Final Order No A/86594-86607/ 2019 dated 13.9.2019] ii. In the cases decided by the tribunal earlier same evidences were relied upon by the revenue for rejecting the transaction value and for redetermining the value of imported goods. However tribunal has set aside the demands made along with interest and penalties. iii. Since the issues involved in those appea .....

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..... the value of the imported consignments inasmuch as the value of the basic raw material was considered for holding the charge of undervaluation based upon the statement given by Shri S.K. Dhawan who stated that valves content 70% of brass and 30% of zinc. It is his submission that the said findings of the adjudicating authority are totally erroneous as there is no test conducted on the goods imported to ascertain whether the Ball valves and Check Valves were having the content of brass and zinc as stated by Shri S.K. Dhawan. It is his further submission that the cost factor cannot be adopted for valuation, when the constituent of the imported consignments are not known; LME price cannot be relied upon as also the tariff value for scrap of brass and zinc cannot be adopted for valuation and on the face of the fact that the percentage of raw materials in the final product is taken arbitrarily. It is his submission that the department did not produce or relied upon any contemporaneous import, while appellants had produced evidences of contemporaneous import but was ignored by the Commissioner and no findings are given. It is his further submission that the findings of misdeclaration of .....

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..... ot retracted the statement. It is his further submission that the judgment of the Apex Court in the case of Collector of Customs v. Shibani Engineering Systems - 1996 (86) E.L.T. 453 (S.C.), specifically states the law, if transaction value of the goods imported are ridiculously low, totally unrealistic and the goods are imported from traders and price list of manufacturer are not produced, such transaction value needs to be discarded. 5. We have considered the submissions made at length by both sides and perused the records. 6. We find from the records that the issue involved is regarding the valuation of ball valves and check valves. The imports were made during the material period and the bills of entry were finally assessed. 6.1 The adjudicating authority has rejected the transaction value of the appellant-importer in the impugned orders by recording the finding that he disagree with the transaction value due to following reasons :- (a) That the prices of the brass/zinc valves were less than the LME price of valves and scrap of brass and zinc. (b) Statement recorded of Shri S.K. Dhawan indicated that the said valves had brass content 76% and iron content 24%, zinc content in zi .....

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..... t is expected is to produce any evidence of contemporaneous import of higher value. In the case in hand, it is the submission of appellant-importer they had submitted details of contemporaneous imports of the same goods and the value seems to be more or less is same as declared by the appellant-importer is not addressed to and also surprising to note that the adjudicating authority has not recorded a single sentence of finding on such contemporaneous import detail given by the appellant. 7.3 Thirdly, we find that the adjudicating authority has come to a conclusion that there was undervaluation as the appellant-importer did not produce the manufacturer s invoice nor catalogue. In our view these findings of the adjudicating authority is totally not in consonance with the law, as these consignments were cleared by the same department when the bills of entries were filed and the documents as produced were accepted as correct at that time. If the authorities had entertained any doubt, they should have called for these documents at the time of clearance of the consignments. 7.4 Fourthly, we find that the adjudicating authority has recorded that the declared value were not actual transact .....

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..... n be seen that the above reproduced findings are squarely applicable in these cases. The reliance placed by the learned DR in the case of Shibani Engineering Systems (supra) will also not carry the case of Revenue any further as we find that in that case also in paragraph 11, the Apex Court has come to a conclusion, that the transaction value can be rejected if it is unrealistically and ridiculously low, but at the same time they had stated that the reasoning given in that case by the adjudicating authority are not acceptable to them in the absence of details of contemporaneous imports. In the case in hand, the ratio of the said judgment may not apply as it is on record that the appellant herein produced details of contemporaneous imports which was not considered by the adjudicating authority. 8. In view of the foregoing, we hold that the impugned orders are unsustainable and liable to be set aside and we do so. The impugned orders are set aside and the appeals are allowed with consequential relief, if any. 5.1 In view of the discussions as above, we set aside the impugned orders and allow the appeal filed, with consequential relief, if any. (Order pronounced in the open court) - C .....

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