TMI Blog2022 (7) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, there are no hesitation in holding that non-mentioning the code or word E or Evolution in the above documents is inconsequential and had no effect on the aspect of valuation of imported goods for the purpose of assessment of the correct duty liability. Thus, there is no question of any mis-declaration on the part of the appellants and that they have not connived with the overseas manufacturer in defrauding the legitimate dues of the government, as alleged by the learned adjudicating authority. Rejection the declared value and redetermination of the same - HELD THAT:- The learned adjudicating authority has observed that when the purchase order is of Azimut 68, then it has to be inferred that whatever price paid is not of higher version of Azimut 68 Evolution and that the same is for the lower version - These findings in the impugned order are factually incorrect inasmuch as the purchase order had described the specification of the engine of imported yacht as 2xMAN 1360mHP , which admittedly relates to the higher version, imported by the appellant on payment of the actual price, attributable to such category of goods. The provisions for valuation of import of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent, we find that the impugned order is not maintainable. As the charge of mis-declaration and undervaluation of the yacht falls flat, confiscation and penalties imposed also do not survive. Accordingly, the same are set aside. Importation of goods i.e. V-SAT connection with dish antenna - HELD THAT:- It is observed from the findings recorded in the impugned order that the appellant had not submitted any documentary evidences with regard to the purchase of the said goods and accordingly, the determination of the value of such goods under Rule 9 ibid is justified and thus, cannot be interfered with at this juncture. Therefore, the differential duty along with interest in the impugned order on the said goods is proper and justified and are liable for confiscation under Section 111 (l) ibid. It is also noticed that though the impugned order has imposed redemption fine on both the category of improperly imported goods, but imposed the fine combined, without bifurcating the same product-wise. Since, the assessable value determined in the impugned order was to the tune of Rs.14,78,128/-, the imposition of redemption fine on such value should be confined to 10% of such value. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 in respect of importation of the subject goods. Based on detailed investigation into the matter, the department had concluded that the importer (the appellant herein) had mis-declared the description of the imported goods in respect of its model as well as actual value, which resulted in evasion of legitimate customs duty payable on higher import price for the actually imported goods i.e. yacht of model Azimut 68 Evolution , instead of model Azimut68 , as declared in the subject Bill of Entry. Further, it had also been concluded that the declared import price of Euro 1400000.00 does not seem to be actual value for levying of customs duty inasmuch as the said price had been arrived at by the importer-appellant after availing/claiming discount of approximately 43% on the initial price of Euro 2410300.00 quoted by the manufacturer-supplier M/s Azimut-Benetti SPA, Italy. On the basis of above analysis, it has been inferred that the declared import price of the subject goods at Euro 1400000.00 did not appear genuine and accordingly not acceptable and that the duty liability is required to be computed on the initial price of Euro 2410300.00 i.e. Rs. 17, 04, 08,210/- CIF quoted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Import Invoice and the Bill of Entry as Rs.14,78,125/- under the provisions of Rule 9 of the Customs Valuation Rules, 2007 at the CIF Value of Euro 20700.00 which was the quoted price of these goods by supplier manufacturer M/s. Azimut Benetti SPA, Italy and accepted by the importer in its purchase order. (iv) Confirmed and demanded the total differential duty amounting to Rs.1, 91, 14,774/- (Rupees One Crore Ninety One Lakhs Fourteen Thousands Seven Hundred Seventy Four only) under proviso to then Section 28(1) of the Customs Act, 1962 (now section 28(4) of the Customs Act, 1962) along with due interest under erstwhile Section 11AB ibid (now section 28AA of the Customs Act, 1962). (v) Ordered for appropriation of an amount of Rs.76,00,000/- already paid by the importer M/s My dream Properties Pvt. Ltd. against the differential duty interest. (vi) Ordered to assess the Bill of Entry No. 911190 dated 11.09.2009 finally under section 18(2) of the Customs Act, 1962. (vii) Confiscated the Yacht of ascertained Assessable Value of Rs.17,74,67,817/- imported under the Bill of Entry No. 911190 dated 11.09.2009 under the provisions of Section 111(m) of the Customs Act, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bill of Entry was for the yacht Azimut 68 and not of the imported product i.e. Azimut 68 Evolution ; thus, there is mis-declaration of the goods and therefore, value declared under Section 14 ibid by the importer cannot be considered as the transaction value and as such, the same is liable to be rejected as per Rule 12 of the Customs Valuation Rules, 2007; arguments placed by the appellant that during the relevant period stating that there was sudden dip of price in ship building industry; therefore, the importer was able to negotiate a much lower price were not acceptable as the same was just a verbal one and no documentary evidence for the same was placed by the importer; there is connivance between the overseas manufacturer and the appellant, which resulted in mis-declaration of goods, with the intent to evade payment of appropriate Customs duty. The impugned order has also recorded the findings that the value of V-SAT connection with dish antenna of the value of Euro 20700 was not included in the value mentioned in the purchase order or in the commercial invoice and the same was also not declared in the Bill of Entry. 3. Being dissatisfied with the impugned order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial consideration if any, by the Department; no justification given for rejection of declared value under section 12 ibid and therefore, no ground for redetermination of the value under Rule 9 of Custom Valuation Rules, 2007. It is in correct to assess the V-Sat separately; the director of the appellant as categorically stated that the same was purchase in India and therefore, it is not important goods. No penalty is imposable as no malafide conduct for evident on the part of the company and the individuals. 4. On the other hand, Shri R.K. Dwivedy, learned A.R. appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that since the appellants are instrumental in mis-declaration of the goods and connived with the overseas entity for defrauding the Government revenue, confirmation of the adjudged demands in the impugned order is just and proper and as such, the same cannot be interfered with at this juncture for a contrary decision inasmuch as the onus to prove compliance of the statutory provisions laying heavily on the appellants, have not been duly discharged. 5. Heard both sides and examined the case records, includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words/Phrase E or Evolution would in no way constitute the suppression of a material fact more so, the details are available in the documents submitted along with the Bill of Entry. Thus, under the circumstances of the case and more particularly, the documentary evidences submitted by the appellant, we have no hesitation in holding that non-mentioning the code or word E or Evolution in the above documents is inconsequential and had no effect on the aspect of valuation of imported goods for the purpose of assessment of the correct duty liability. Thus, in our considered opinion, there is no question of any mis-declaration on the part of the appellants and that they have not connived with the overseas manufacturer in defrauding the legitimate dues of the government, as alleged by the learned adjudicating authority. 7. The issue regarding rejection the declared value and redetermination of the same in the impugned order has admittedly been done on the basis of an inference , which is evident from paragraph 38 in the impugned order, wherein the learned adjudicating authority has observed that when the purchase order is of Azimut 68, then it has to be inferred that whateve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant for such goods. Further, it is an admitted fact on record that the payment was made by the appellant through approved banking channel and to such effect, had submitted the accounts statement and other particulars before the department at the time of filing the Bill of Entry. Furthermore, it is also an admitted fact that the appellant is no way related in any manner with the overseas supplier of goods. Thus, under such circumstances, the valuation provisions contained in Section 14 ibid read with Rule 3(1) ibid have the application in this case for determination of the transaction value and the provisions of Rule 12 ibid read with Rule 9 ibid would have no application for rejection of the declared value and redetermination of the same by resorting to the provisions under the Valuation Rules, 2007. On scrutiny of the impugned order, we find that the learned adjudicating authority has rejected the declared value solely based upon the singular fact that the negotiations with the overseas manufacturer with regard to the final price of goods were verbal. We are of the view that such facts can never be a reason for rejection of the declared value under Rule 12 ibid inasm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was positive for new and willing to supply the yacht in shorter time; They received initial price list showing the total price of the boat yacht) at Euro 2,410,300.00 FOB (including accessories, transport to savona and launching and rigging charges); they have started negotiating with them and when M/s. Azimut found that we were seriously interested in the yacht they started negotiation with us and made an initial offer vide Proforma invoice no. Azimut/006/2008-09 dated 23/03/2009 for a value of Euro 1,724,600/-(CIF) (CIF price of Euro 1,400,000 plus Accessories of Euro 324,600); the components of transport to Savona Eur. 28,850.00; launching and rigging charges Euro 14,850.00 and insurance and freight to Mumbai Euro 75,000.00; all these elements totaling to Euro 110700.00 was offered as special discount. They learnt from the market that prices of the yachts are fallen by approximately 50% during the past 10 months; subsequently, they have again started negotiations with Mr. Yadvider Rana, Asia Pacific Sales Manager, for further discount; Shri Rana agreed as one off special price at Euro 1,400,000 (including all accessories) on CIF Mumbai Basis with the delivery in Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to any agent in India or abroad in the purchase of the yacht in question 11. From the facts of the case, the records and submissions of the appellant that it was categorically indicated in the import documents that the impugned yacht was of an engine capacity of 1360 HP which pertains to evolution category. Therefore, the fact of finding the same from the ship manual present in the ship has no bearing on the facts of the case. This aspect has been totally ignored by the learned adjudicating authority. Moreover, the adjudicating authority has rejected the declared price on the basis of the assumption that the initial quote was the finally agreed price ignoring totally the commercial practice of negotiation and discounting. We find from the statement of Shri Manivannan that it is abundantly clear that the international prices of the yacht were falling during the lean period and as such, there is no reason to disbelieve the submission of the appellants, saying that they are mere hearsay and not evidenced by any documents. The shipping websites documents as submitted by Shri manivannan do indicate a slum in the market and consequential fall in prices. This aspect has been compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value . 12.2 Hon'ble Apex Court in case of Commissioner of Customs, Calcutta vs. South India Television P. Ltd., reported in MANU/SC/2966/2007 : 2007 (214) ELT 3 (SC) wherein, by paragraphs 6, 7 and 8 it has been laid down 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 undervaluation 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 undervaluation. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere prediction on grounds and material in the form of certain reasons and not mere ipse dixit. Subjecting imports to enquiry on mere suspicion because one is distrustful and unsure, without reasonable and certain reasons, would be contrary to the scheme and purpose behind the provisions which ensure quick and expeditious clearance of goods. 12.5 In the case of NPT Papers Pvt. Ltd Others V. C. C., Mundra Others , (MANU/CS/0120/2021), the Tribunal by following the judgments in Bayer India Ltd. V. Commissioner Of Customs, Mumbai [2006 (198) ELT 240], upheld by Hon ble Supreme Court [2015 (324) ELT 17 SC] and Tele Brands (India) Pvt. Ltd. V. Commissioner Of Customs (Import) Mumbai, reported in [2016 (336) ELT 97 (Tri. Mum.)], held that there should be evidence on record to show that the importers have paid directly or indirectly any amount over and above the invoice value. Once it is proved that there is no evidence of extra remittance, transaction value cannot be discarded. 13. In view of the above discussion, we are of the considered opinion that in so far as the valuation of the yacht is concerned, Revenue has not made out any case of mis-declaration and consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus, cannot be interfered with at this juncture. Therefore, we held that differential duty along with interest in the impugned order on the said goods is proper and justified and are liable for confiscation under Section 111 (l) ibid. We also noticed that though the impugned order has imposed redemption fine on both the category of improperly imported goods, but imposed the fine combined, without bifurcating the same product-wise. Since, the assessable value determined in the impugned order was to the tune of Rs.14,78,128/-, we are of the view that imposition of redemption fine on such value should be confined to 10% of such value. Accordingly, it is ordered that the appellant is liable to pay redemption fine of Rs.1,47,812/- in respect of V-SAT connection with dish antenna imported by them. However, the appellant is not exposed to the penal consequences provided under Section 114A ibid, especially for the reason that non-levy or short-levy of duty was not due to the reason of willful mis-statement or suppression of facts etc. 15. The personal penalty imposed on the other appellants in respect of the goods V-SAT connection with dish antenna cannot also be sustained ina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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