TMI Blog2022 (9) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Samay International and the duty was assessed in the name of M/s Samay International and it was paid in the name of M/s Samay International. However, subsequent statements of Shri Pradeep Kumar, Shri Surinder Kumar, Shri Joginder Kumar and the owner of M/s Samay International show that duty was paid in cash by Shri Pradeep Kumar to K R Express who deposited it through TR-6 challans in the name of M/s Samay International. Shri Anil Kumar the proprietor of M/s Samay International claimed that he had no knowledge of the imports. It is not found that either Shri Surinder Kumar or Shri Joginder Kumar or K R Express have held themselves to being the importers . Shri Anil Kumar, the IEC holder, has consistently maintained that he had nothing to do with the imports. Thus, in this case, according to all the documents such as Bill of Entry, Bill of Lading, invoice, IGM, the importer is M/s Samay International. According to statement of Shri Pradeep Kumar, he was the importer. Further, according to another statement of Shri Pradeep Kumar, Shri Joginder Kumar and Shri Surinder Kumar are also the importers being equal beneficiaries in the imports - Commissioner has not followed the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted ignoring the previous rules and without discussing the as to why the previous rules are not applicable. Further, the statements of Shri Pradeep Kumar, based on which the value was re- determined, is not relevant as the procedure under Section 138 B was not followed. The values indicated in the show cause notice were lowest values of the similar goods imported at that time. It is also found that NIDB data was equally available to the assessing officers at that time. The goods, having been assessed and cleared during the period by the assessing officer, there are no sufficient reason to enhance the value as per impugned order. At any rate, since it is found that the importer, as per the documents was M/s Samay International and the statements before officer to the contrary were not relevant in view of section 138 B, the demand of duty under section 28, if any, has to be made on the importer. The importer is not a noticee in this case. The enhancement of value and determination of duty is not sustainable. Consequently the penalties imposed upon the appellants are also not sustainable - As per all the relevant documents, M/s Samay International is the importer and the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assailing the imposition of penalty upon him and also assailing the order of recovery of differential duty along with interest from him. 4. The facts of the case are that the eighteen (18) bills of entry were filed by M/s K R Express Pvt Ltd. [ K R Express ] who is a licensed customs broker in the name of M/s Samay International, New Delhi whose IEC is 0511069324. All the documents such as bills of lading, invoices, Import General Manifest [ IGM ] were in the name of M/s Samay International. The goods were cleared after assessment by the assessing officers. 5. The Delhi unit of Directorate Revenue of Intelligence [ DRI ] received intelligence that some syndicates were operating to make remittances to Hong Kong based entities for under- invoiced imports by various importers, using banking channels in the name of front/bogus firms including M/s Samay International. According to the intelligence, the modus operandi was to submit bogus import proforma invoices in order to remit advance payments against supposedly future imports. No imports were thereafter actually made and the remittances so made by the syndicates were adjusted against the payments due for under-valued imports ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder a panchanama dated 05.1.2013. The hard disks were examined under a panchanama on 29.03.2014 and they had several formats of invoices and packing lists related to imports created in word and Excel formats with missing details. The officers of DRI inferred that these were meant to create bogus documents. The statement of accounts and the remittances showed that Rs. 102 crores were remitted abroad using the account of M/s Samay International. These remittances in the name of M/s Samay International are not in question in the present proceedings. Under dispute in these proceedings are the imports actually made in the name of M/s Samay International. Shri Anil Kumar, Proprietor of M/s Samay International sent a letter dated 31.03.2013 to DRI stating that his IEC was misused by K R Express for importing goods and that he had not authorised K R Express to import goods on his behalf and that he had not imported any goods nor has paid any customs duty. He further stated that he has filed a police complaint on 17.01.2013 against K R Express and prayed that strict action may be taken against them. 8. Statement of Shri Joginder Kumar, Director of K R Express was recorded on 05.01.2013, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h an intent to evade the payment of duty. The extent of under valuation was assessed by the investigating agency. 11. Of the 18 bills of entry 7 are listed in Annexure A to the show cause notice. In respect of three bills of entry, viz, 6118312 dated 28.02.2012, 6288714 dated 19.03.2012 and 6089748 dated 24.02.2012 the statement of Shri Pradeep Kumar that these goods were under-valued to the extent of three to four times was relied upon and accordingly values were enhanced by 3.5 times. In respect of the remaining four bills of entry, the values were correspondently assessed at double declared valued based on the statements of Shri Pradeep Kumar. 12. In respect of 11 bills of entry mentioned in the Annexure B to the show cause notice, the transaction values were rejected and they were re-determined on the basis of lower contemporaneous prices declared by similar goods in terms of Rule 5 of the Customs Valuation (Determination of Value of imported Goods) Rules, 2007 [ Valuation Rules ]. Thus, the differential duty table was worked out as follows: Sr. No No of Bills of Entry Declared Assessable Value (Rs) Duty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said SCN evaded/shortpaid by them and order for recovery of the said Customs duties from Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar) under Section 28(4) of the Customs Act, 1962; (iv) I, hereby, order and confirm for recovery of interest under Section 28AA of the Customs Act, 1962 at the applicable rates on the above said duty as mentioned in para ) above from Noticee No. 01 (M/s KR. Express Pvt Ltd.) and Noticee No. 04 (Shri Pradeep Kumar). (v) , hereby, order for appropriation of Rs. 10,60,000/- deposited by them during investigation towards their duty liabilities i.e. Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar); (vi) I, hereby, impose Penalty amounting to Rs. 97,55,307/- (Rs. Ninety Seven Lakh Fifty Five Thousand Three Hundred Seven Only) under Section 114A of the Customs Act, 1962 on Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar) for their acts of omission and commission as discussed in foregoing paras. (vii) I hereby, impose Penalty amounting to Rs. 1,00,00,000/- (Rs. One Crore only) under Section 114AA of the Customs Act, 1962 on Noticee No. 01 (M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already imposed on both the directors of the appellant firms. 16. Although the judgment of Supreme Court in Canon India vs. Commissioner of Customs in Customs Appeal No. 187 of 2018 in which the Supreme Court held that DRI officers are not proper officers to show cause under Section 28 was relied upon earlier, but during the hearing, learned consultant said that he was not pressing this submission as the matter is pending before the Supreme Court in Review petition filed by the Revenue and also certain amendments were made in the Finance Act, 2022. He argued only on merits. 17. Learned consultant for the appellants submitted that there is no relationship between the alleged modus operandi discovered by the DRI that remittances were being made using various accounts including that of M/s Samay International but no imports were being made at all and the present show cause notice which alleges that imports have been made in the name of M/s Samay International but through undervaluation. He further submitted that there is no evidence or even allegation that any amounts have been transferred to the suppliers of the goods over and above the invoice value. Therefore, the allegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re confiscated in the impugned order under section 111 (d) and 111(m) of the Customs Act but no redemption fine was imposed. In other words, the goods were absolutely confiscated. Once the goods are confiscated, the goods vest in the Government of India and so no duty is payable by them. For this reason also, the impugned order is not sustainable. He, therefore, prays that the impugned order may be set aside and appeals may be allowed and Revenue s appeals may be rejected. 21. Learned Authorised Representative for the Revenue vehemently supported the impugned order. He points out that although the goods were imported in the name of M/s Samay International, as evident from the statement of Shri Anil Kumar, its proprietor, the goods were imported without his knowledge and all documents were prepared in the name of M/s Samay International and Bills of entry were filed by M/s K R Express in the name of M/s Samay International. However, duty could not have been paid through its bank account. Therefore, Shri Pradeep Kumar paid cash to K R Express who deposited the same as duty through a TR-6 challan in the name of M/s Samay International. M/s Samay International was, therefore, oblivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no infirmity in re-assessment of duty and demand of duty under section 28 (4) of the Customs Act along with interest. 23. As far as the confiscation of the goods under section 111(d) and Section 111 (m) are concerned, he submits that Section 111(m) provides for confiscation of goods imported into India which do not correspond in value or in any the particular with the entry made (i.e. bills of entry) under the Act. A true declaration in the bill of entry is a requirement under the Customs Act as well as under the Foreign Trade Development and Regulation Act, 1992 [ FIDR Act ]. The imports were made without making a true declaration and hence they have also become liable to confiscation under section 111(d). Regarding the redemption of the goods, he submits that while the goods were liable to confiscation under Section 111, no redemption fine were imposed by the Commissioner for the reason that they were no longer available and had already been cleared and disposed of by the appellants. He, therefore, asserts that the impugned order needs to be upheld except to the extent to non imposition of penalty on the appellants under Section 112 of the Customs Act. 24. He fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case, the bill of entry was filed with M/s Samay International as the importer. The bills of lading, IGM etc., were in the name of M/s Samay International and the duty was assessed in the name of M/s Samay International and it was paid in the name of M/s Samay International. However, subsequent statements of Shri Pradeep Kumar, Shri Surinder Kumar, Shri Joginder Kumar and the owner of M/s Samay International show that duty was paid in cash by Shri Pradeep Kumar to K R Express who deposited it through TR-6 challans in the name of M/s Samay International. Shri Anil Kumar the proprietor of M/s Samay International claimed that he had no knowledge of the imports. Shri Pradeep Kumar confessed to being the importer of the goods. Shri Surinder Kumar and Shri Joginder Kumar have admitted that they had not met the owner of M/s Samay International Shri Anil Kumar and had collected all the KYC documents from Shri Pradeep Kumar and had even received the duty amount in cash from Shri Pradeep Kumar and deposited the same through TR-6 challans in the name of M/s Samay International. 30. In one of the statements, Shri Pradeep Kumar said that Shri Joginder Kumar and Shri Surinder Kumar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. 31. In this case, the Commissioner has not followed the above process and hence the statements are not relevant, let alone admissible in this case. This becomes even more important in this case because of the contradictions between the statements of Shri Pradeep Kumar on the one hand and Shri Joginder Kumar and Shri Surinder Kumar on the other. Since the statements are not relevant, the importer is the one which all the documents state to be the importer viz, M/s Samay International. 32. As far as the demand of differential duty is concerned, it can be recovered if duty is not levied, short levied or erroneously refunded, from the person chargeable to duty. In this case the goods were in the name of M/s Samay International which is the importer according to all the documents. Therefore, differential duty, if any, can be demanded from it only. The duty was originally also paid in the name of M/s Samay International. 33. It is evident from the order that the goods have been confiscated under Section 111 (d) and section 111( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government. 36. As may be seen duties of customs are charged on the goods imported into or exported to India and this charge will apply to all goods belonging to Government as they apply to all goods not belonging to Government. This applies not only where goods were imported by the Government but also to cases where title of the goods gets transferred to the Government for any reason. For instance, where the goods are confiscated under the Customs Act and are not redeemed, the goods vest in the Central Government and duty liability on such goods flows along with it. The officer who is ordering confiscation is responsible to take possession of the confiscated goods. It is a matter of practice when the goods which were confiscated are subsequently auctioned or sold by the Government the sale proceeds of such goods are taken as cum-duty price and the amount of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is a reason to doubt the transaction values, they can be rejected and then valuation has to be done sequentially as per the Valuation Rules. In this case rule 9 of the Valuation Rules has been adopted ignoring the previous rules and without discussing the as to why the previous rules are not applicable. Further, the statements of Shri Pradeep Kumar, based on which the value was re- determined, is not relevant as the procedure under Section 138 B was not followed. 40. In so far as the 11 bills of entry mentioned in Annexure B to show cause notice are concerned, the declared prices were enhanced on the basis of lowest of the contemporaneous prices declared of similar goods imported during the relevant period as mentioned in Tables A, B, C and D or paragraph X of paragraph 13 of the show cause notice. Learned consultant for the appellants produced before us bills of entry for the same periods filed by certain other importers claiming that there were other lower prices of importer at that time. Therefore, we are not satisfied that the values indicated in the show cause notice were lowest values of the similar goods imported at that time. We also find that NIDB data was equally ..... X X X X Extracts X X X X X X X X Extracts X X X X
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