TMI Blog2022 (7) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... uct, level of processing, time of import etc.. Even though Revenue has placed reliance on betel nuts imported through the ports of Chennai and Nhava Sheva, no quality test report is available on records. Even the Betel nuts imported by the Appellants are not tested to ascertain its grade and quality. In the absence of any quality assessment test reports, the contemporaneous nature of goods cannot be ascertained. NIDB data and the documents relied upon by the Department are not made available to the Tribunal and the same is not seen part of the Order-in-Original. Therefore, there is no clarity and specificity on the probative value of the documents on which reliance is placed by the Department in support of its allegation of under-valuation. In the present case, Department has rejected transaction value under Rule 12 (1) and re-determined under Rule 5 of the Customs (Determination of Value of Imported Goods) 2007, finding that there are contemporaneous imports through the ports at Chennai and Nhava Sheva on higher transaction value. Rules are very clear to the extent that, in order to invoke Rule 5, evidences of similar goods at the same commercial level and in substantially the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication proceedings by the Revenue Authorities under the Customs Act, 1962, alleging undervaluation and violation of EXIM Policy. As per Notification No.49 (RE-2006)/2004-2009 dated 20.02.2007, issued by the DGFT, import of betel buts was allowed only through the port of Mangalore. In addition to this, as per Notification No. 15 (RE-08)/2004-09 dated 04-06-2008, DGFT fixed Minimum Import Price for import of Betel Nuts. Appellant challenged this Notification before the Hon ble High Court of Kerala in W.P.C No. 9624 of 2007 but pending disposal of the case, the said notification pertaining to port restriction was withdrawn. In the said Writ Petition, Department filed clarification petition and secured orders from the Hon ble High Court of Kerala, to assess goods independently, keeping the policy aspect aside. Accordingly, the Original Authority conducted assessment and passed Order-in-Original, rejecting the transaction value under Rule 12 (1) and re-determining the same under Rule 5 of the Customs (Determination of Value of Imported Goods) Rules 2007. Challenge against the Order-in-Original was dismissed by the Commissioner of Customs (Appeals), which resulted in this batch of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court had held in Ranjana Mitra V. Ashok Kumar Mazumdar (MANU/DE/1538/2021) that it is crystal clear from a mere reading of the impugned judgment that except for citing the submissions made by the parties, the findings and the conclusions of the Trial Court, the First Appellate Court has not dealt with the contentions raised by the Appellant and has not even given any reasons for concurring with the findings of fact and law given by the Trial Court, as also the reasons why the contentions of the Appellant challenging the judgment of the Trial Court were devoid of merit . (viii) That although the above judgment relates to a civil case, the ratio holds good even in the case of consideration of cases under the Customs Act, 1962. Appellants approached the Appellate Authorities/Tribunals being aggrieved by orders passed which have serious civil consequences to them. The authorities have to bestow the same level of care and diligence while dealing with cases, as they are quasi-judicial authorities vested with powers under the Statute. They are not different from Civil Courts, except the absence of some of the trappings/formalities of a Civil Court. In the scheme of the Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment in Motor Industries Co.Ltd (2009 (244) ELT 4 SC) etc.. were placed before the 1st Appellate Authority, along with a detailed Note, but were ignored. This Hon ble Tribunal in Global Industries case held that the ratio of the judgment in Radhey Shyam Ratan Lal (2009) 13 SCC 157 was not applicable on the facts of that case. Yet, the 1st Appellate Authority had approved the Order-in-Original which had relied on the ratio of the judgment in Radhey Shyam case. Evidence of bank remittances, and copies of audited balance sheet and P L were produced, which again were ignored for no reason. In this is nothing short of judicial indiscipline. (xii) That the Original Authority had valued the goods under Rule 5 of CVR after recording that there were contemporaneous goods imported at higher value through other ports. However, the objections raised by the Appellants before the original authority was not considered. (xiii) That without testing the samples, in an agricultural commodity, similarity cannot be established. (xiv) That there was nothing on record to show that the values of contemporaneous imports were declared as mandated in DGFT Notification (which had fixed a minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed and ungarbled goods. This burden has not been discharged at all by the revenue. (xx) That by merely providing NIDB data (which is the value on which duty was paid) and copies of some BEs, the above onus is not discharged. In the case of agricultural produce such as Betel Nuts, quality, time of crop, time of import, age of the goods (in Betel Nuts older/drier nuts obtain higher value), level of processing etc., impact the value/price. These factors could be determined only through testing. None of the contemporaneous goods and no imported goods were tested. Therefore, to invoke Rule 5 of CVR for rejecting the declared value and assessing the goods at higher values was clearly arbitrary and unsustainable. (xxi) That in all these cases, goods were cleared after paying 50 % of differential duty and providing Bank Guarantee for the remaining value. The Appellants had suffered huge loss by having their essential working capital tied up in the above manner for a period in excess of 11 years. The entire business of the Appellants have collapsed and their processing facilities have shut down. 03. Smt. D.S. Sangeetha, Additional Commissioner (Authorised Representative) made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sk the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods. Rule 5. Transaction value of similar goods.- (1) Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as the goods being valued: Provided that such transaction value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962. (2)The provisions of clauses (b) and (c) of sub-rule (1), sub-rule (2) and sub-rule (3), of rule 4 shall, mutatis mutandis, also apply in respect of similar goods. Note to rule 5 says; 1. In applying rule 5, the proper officer of customs shall, wherever possible, use a sale of similar goods at the same commercial level and in substantially the same quantities as the goods be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. 4.1 Betel nut being an agricultural product, similarity and identical nature of goods can be ascertained only by quality assessment, as the price of betel nuts are largely depended on grade, quality, time of yield, age of the product, level of processing, time of import etc.. Even though Revenue has placed reliance on betel nuts imported through the ports of Chennai and Nhava Sheva, no quality test report is available on records. Even the Betel nuts imported by the Appellants are not tested to ascertain its grade and quality. In the absence of any quality assessment test reports, the contemporaneous nature of goods cannot be ascertained. NIDB data and the documents relied upon by the Department are not made available to the Tribunal and the same is not seen part of the Order-in-Original. Therefore, there is no clarity and specificity on the probative value of the documents on which reliance is placed by the Department in support of its allegation of under-valuation. The Commissioner of Customs (Appeals) has also passed an order without discussing the merits of the case, argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se behind the provisions which ensure quick and expeditious clearance of goods. 4.4 In the case of Global Industries Vs. Commissioner of Customs, Cochin [2011(272)ELT724 (Tri. bang)] it was held that in the absence of data relating to the imports of goods of same quality, quantity and commercial level with higher transaction value, contemporaneous import cannot be accepted. In this instant case, Revenue has not placed any data to evidence contemporaneous imports; rather the Adjudicating Authority found that there are no contemporaneous imports. 4.5 We find that both Original Authority as well as Appellate Authority have not applied their mind in as much as rejection of transaction value and its re-fixation has been made without following the mandates of Rules as well as decisions of Hon ble Supreme Court. 4.6 The term identical goods is defined under Rule 2(d) of the Customs (Determination of Value of Imported Goods) 2007, which means imported goods- (i) which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods; (ii) p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders passed by the Original Authority as well as Appellate Authority. Before concluding, we may observe that the both Original order and Appellate Orders places no reliance on Rule 4, even though it applied mutatis mutandis to Rule 5. Even in the absence of such reference, we find that Rule 4 (1) (b), (c), 4(2) and 4(3) also speaks about applicability of this rule in cases of identical goods in a sale/or not and its cost component, at the same commercial level and in substantially the same quantity. We have already discussed in the foregoing paragraphs and found that identical nature of the goods, compared in this case, are not proved in the manner established under law and therefore applicability of this rule and sub rule mutatis mutandis to Rule 5 also fails. 4.8 During the course of arguments, Learned Authorised Representative submitted about the minimum import price (herein after referred to as MIP) by the Director General of Foreign Trade for all imports pursuant to Notification No. 15 (RE-08)/2004-09 dated 04-06-2008. The question with regard to M.I.P has already travelled to Hon ble High Court and the same is not the subject matter of this appeal. Therefore, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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