TMI Blog2023 (5) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the supplier has erroneously dispatched the DEBAO D-16 model machines. This error has been admitted by the shipper/exporter, which fact has not been found to be untrue. So far whatsapp data obtained from Samsung 4 G LTE mobile phone, alleged to be submitted by Shri Pankaj Jain to the Revenue at the time of recording of his statement on 23.05.2016, a question was put to him by Revenue please tell since when u are using the Samsung 4G LTE brand phone. In answer, Shri Pankaj Jain stated - that this phone is being used at his home for almost 2 years. This phone is also used for the purpose of the business. It is further recorded that Shri Pankaj Jain submitted the Samsung 4G LTE mobile phone to the Revenue for further investigation, which was sealed in an envelope (without recording the IMEI No.) bearing signature of Shri Pankaj Jain. Evidently, IMEI number is the identification number of a mobile phone - the appellant have, in course of recording his further statement by Revenue on 18.05.2018, stated that he has never used Samsung 4 G LTE mobile phone and it was under coercion exercised by the officers of DRI, he was made to write that he has used the Samsung 4 G LTE phone a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radewell as its C.O.O. Revenue have earlier booked a case of undervaluation and mis-declaration against M/s. Tradewell for import of similar goods /paper cup machines. Goods imported vide Bill of Entry dated 31.10.2015 by M/s. Tradewell were seized and show cause notice was issued. 3. The DRI officials conducted enquiry with respect to Bill of Entry No. 5275518 dated 16th May, 2016 (filed at ICD-Garhi Harsaru by appellant) with respect to import of 16 paper cup machines at declared value of US D 80,000 (USD 5,000 per machine) equivalent to ₹ 54,86,759/-, duty liability of ₹ 14,50,055/-.It appeared to Revenue that the machines were under-invoiced. Accordingly the machines were seized under Section110 of the Customs Act and were put under the care of the custodian of the ICD GhariHarsuru, Gurgaon vide seizure dated 17th May 2016. Search was also conducted at the residential premises of the proprietor, Shri Pankaj Jain. During the search, some relevant documents and electronic gadgets were recovered. The imported machines bore the brand name Tradewell . The model number of the machine was mentioned as TW D16. Commercial invoice dated 6th March, 2016was issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was handed over (while recording statement) for further investigation and sealed in an envelope, duly signed by Mr. Pankaj Jain. The seized 16 paper cup machines were provisionally released on the request of the appellant, on execution of bond and bank guarantee by order dated 16th May, 2016 by the Principal Commissioner, ICD, Patparganj, New Delhi. 5. Forensic testing of the Samsung 4G LTE mobile phone was conducted by the Computer Engineer Shri Santosh Kumar in the office of DRI, Jaipur on 27th May 2016. Shri Santosh Kumar retrieved the saved and deleted data, out of the said mobile phone. The proceedings of data retrieval were recorded under panchnama dated 27th May, 2016. 6. From the retrieved data, it was revealed that one mobile number was saved as Hawala China Tarun Baid. It was found that appellant was involved in whatsapp chat with Tarun Baid, the Hawala Operator based at Jaipur, and was also exchanging messages on whatsap with Ms. Kitty Jiang, Sales Manager of M/s. Zhejiang New Debao Machinery Co Ltd, China (the China-based supplier of paper cup machines). 7. Investigation was conducted in respect of Mr. Tarun Baid, the Hawala Operator and his statement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeing the statement of Shri Pankaj Jain dated 23rd May, 2016 (wherein, Mr. Jain submitted the Samsung 4G LTE mobile phone), he stated that he never had any Samsung brand mobile phone and had never purchased such phone. That Shri Pankaj Jain and his other members of family never gave any mobile phone for use. Further, he has never sent any messages from the said Samsung brand mobile phone to Ms. Kitty Jiang. Therefore, the contention of Shri Pankaj Jain that Mr. Om Prakash Sharma could tell about the messages exchanged with Ms. Kitty Jiang, was completely wrong. He did not even know any Ms. Kitty Jiang, nor he has ever met her. 11. Statement of one Mr. Kanchan Sanyal, Regional Manager M/s. Unicorn Logistics, Nehru Place, New Delhi was recorded on 23 rd August, 2016, wherein he stated that they have handled 2 shipments/consignment of M/s. Tradewell, Jaipur; that they did not handle the customs clearance and have handled only freight activities in China. Mr. Sanyal also submitted copy of documents (commercial invoice, customs declaration and packing list in respect of M/s. Tradewell) received from M/s. Best shipping Co Ltd., China, who had obtained documents from the Chinese su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y had visited Canton Fair as well as factory of Zhejiang New Debao and had finalised deal of DBL 16 machines, which was high speed machine and better than DBL 12 machines. Further stated that one machine was imported at Kolkata Port by M/s. Tradewell, Jaipur and later on, Jain Sons imported 16 paper cup machines DBL 16 at ICD Garhi Harsaru, Gurgaon. In his further statement recorded on 5th April, 2017, Mr. Y.D. Sharma reiterated his earlier statement and also stated that Mr. Pankaj Jain used to take consultancy from him on drawing and design of various machines. He had visited China along with Mr. Pankaj Jain on the request of Mr. Pankaj Jain and also the cost of tickets etc. was borne by Mr. Pankaj Jain, and thereafter, Mr. Pankaj Jain had imported 16 DebaoD-16 paper cup machines through ICD Garhi Harsaru. 14. Revenue got the valuation of the 16 paper cup machines done by Mr. R.K. Agarwal, Chartered Engineer, a Government Registered Valuer located at New Delhi on 21st March 17. Mr. Agarwal submitted his valuation report dated 22nd March, 2017, wherein as per the valuation report, the C F value of each D 16 machine was USD 13,000. Accordingly, it appeared to Revenue th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection appeared to be of DEBAO D-16 Model. The appellant also mis-declared the actual transaction value as C F USD 5000 per machine. Whereas the actual transaction value (C F) was USD 12,450 per machine, as mentioned, in the Customs declaration dated 01.11.2015 in the invoice of the Chinese Exporter dated 23.10.2015 (before Chinese Customs). 16. As it appeared to Revenue, in view of the aforementioned facts that a case of mis-declaration as to value and brand of the machine is made out against the appellant, show cause notice dated 8.5.2017 was issued by the Additional Director, DRI, Jaipur dated 8.5.2017, proposing confiscation of 16 paper cup machines, imported vide bill of entry No. 5275518 dated 16.05.2016 at ICD, Ghari Harsaru, under Section 111(m) of the Act. Further, penalty was proposed under Section 112(a) and (b) of the Act. Show cause notice was adjudicated on contest by the Joint Commissioner of Customs, ICD, Patparganj, New Delhi vide order-in-original dated 28.09.2018 confirming confiscation of 16 paper cum machines revalued at Rs. 1,36,62,031/-.Further, with option to redeem on payment of redemption fine of Rs. 20 lakhs. Further, penalty of Rs. 2,20,000/- wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon. Further, such data (electronic evidence) is also not supported by an appropriate certificate, as required under Section 138 C(4) of the Act read with Section 65 (B) of the Indian Evidence Act. 16.7 The statement of Mr. Tarun Baid cannot be relied upon. Firstly, because Mr. Tarun Baid has immediately retracted from his statement. Secondly, he has not been made a party to the show cause notice nor has been examined by the Adjudicating Authority in the proceedings. Thus, his statement is not reliable for failure to meet the conditions precedent under Section 138 B of the Act. The statement is also not reliable as the appellant was given a copy of such statement without the Annexure to the statement. 16.8 The show cause notice is also bad as the Revenue have proceeded to re-value the goods without rejecting the transaction value. Further, the goods have not been valued as required under Rule 14 of the Act read with Customs Valuation Rules, 2007. 16.9 Further, urges that in absence of proper determination of the fair market value of the imported goods under Section 14 of the Act read with the Valuation Rules, the show cause notice is bad and the impugned order is fit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice. Recording of the reasons is necessary to eliminate vice of arbitrariness. 19. It is further urged that show cause notice is speculative and based on assumptions and presumptions. Further, the allegations of mis-declaration is bad and not sustainable as admittedly the appellant have filed the bill of entry on the basis of import documents. There is no mis-match in the bill of entry with the import documents. The supplier has admitted that there is an error at their end in dispatching the goods, instead of dispatching the machinery of Model TW-D 16, they have mistakenly sent machines of DEBAO D-16 model. Such statement of foreign supplier has been ignored without the same being found to be untrue. It is further urged that Revenue have failed to point out the trail of money involved in respect of alleged Hawala transactions. Revenue have merely relied upon the whatsapp chat and the retracted statement of Mr. Tarun Baid, in support of their contentions. 20. Further, urges that in the facts and circumstances, the appeal may be allowed and the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement, which bears the signature of deponent /Shri Pankaj Jain. As regards non-rejection of declared transaction value, evidently, show cause notice has been issued for under-valuation of the imported goods. Thus, ipso facto the declared value has been rejected by the Revenue. Further, urges that the rate per machine of USD 12450 has been adopted by the Revenue pursuant to investigation, wherein this fact was known from the declaration made by the shipper before the Chinese Customs, copy of which was given to Revenue by the freight forwarder-M/s. Unicorn Logistics, New Delhi, which was received by them from their principal- M/s. Best Shipping Company Ltd., China, via email. As regards the Valuation Report by Chartered Engineer, Shri R.K. Agarwal, it is urged that he is Government registered Valuer having B.E. degree in Production Engineering. Hence, the Valuation Report by Chartered Engineer cannot be rejected on the ground that he is competent under the law to value only second hand machinery. As regards opportunity to cross-examine the witnesses of the Revenue, the Adjudicating Authority have rejected such request, wherein such examination was not required and has allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction value was similar, have also admitted under-valuation and paid differential duty with interest. Accordingly, prays for dismissing the appeal. 24. Having considered the rival contentions, considered the material facts on records, and record my findings as follows:- 24.1. Admittedly, Shri Pankaj Jain has not admitted any under-valuation of the imported goods. Shri Pankaj Jain has stated that such machinery is also manufactured in India and he has purchased one similar machine from M/s. Lami Coats Shivakashi (T.N.) vide their invoice No. 0281 dated 16.12.2015 for Rs. 4,50,000/- plus GST of Rs. 9,000/-. This machine was equivalent in efficiency with the model imported by the appellant viz. TW- D16. This fact has not been found to be untrue by the Revenue. 24.2 So far the allegation of mis-declaration of brand is concerned, admittedly, there is no mis-match in the data contained in the bill of entry filed by the appellant and the import documents viz. bill of lading, invoice, etc. The appellant have stated that he had ordered for TW-D16 machines whereas the supplier has erroneously dispatched the DEBAO D-16 model machines. This error has been admitted by the shipper/exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la is concerned, I find that firstly the alleged Hawala Operator - Shri Tarun Baid has immediately retracted his statement on the very next day. Further, in spite of prayer of the appellant, Revenue failed to examine Shri Tarun Baid in the adjudication proceedings and also failed to offer its witnesses for cross examination. I further find that the statement of Shri Tarun Baid is not reliable also for the reasons that he has not been made a co-noticee in the show cause notice. Accordingly, I hold that the statement of Shri Tarun Baid is not a reliable piece of evidence. 24.6 So far the Valuation Report submitted by the Chartered Engineer, Shri R.K. Agarwal is concerned, who had valued the imported machines as USD 13,000 per machine. The appellant have disputed the valuation by Shri R.K. Agarwal, Chartered Engineer on the ground of competency and also on merits. The Chartered Engineer has been empowered to value only in case of import of second hand machinery under the Customs Valuation Rules. In case of new machinery, Rules require valuation to be done on the basis of contemporaneous imports (NIDB data). In absence of such data, authority is required to follow the Valuation Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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