TMI Blog2023 (10) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of precious/semiprecious stones, pearls as well as gold/silver and jewellery for customs purposes. No valuer can give exact valuation of rough precious stones at any stage of time, however an expert the valuer may be. Generally, the prices are given with a margin of fluctuation of +/- 20% and the value declared by the appellant was well within this range. It has further been contended that the valuation report of the said Government approved valuer does not specify whether the rate is wholesale or retail sale value or the CIF value. Further, during the course of investigation itself, it has been observed that the valuation cannot be determined under Rules 4 to 7 of Customs Valuation Rules, 2007 as the nature of each stone and its value is distinct and varied, and even the market value cannot be ascertained. Consequently, other than the valuation report submitted by the valuer who does not appear in the panel of Government approved valuers, and there being no other corroborative evidence to establish any undervaluation by the appellant, the transaction value is liable to be accepted. The Department has failed to prove that the transaction value/invoice price was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same has happened due to the mistake on the supplier side. Therefore, the goods viz., Natural Rough Diamond are permitted to be re-exported, without payment of redemption fine. Thus, no penalty or fine is leviable on the appellant - appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri Arun Goyal, Advocate for the Appellant Shri Girijesh Kumar, Authorized Representative for the Respondent ORDER The present appeal has been filed against the Order in Appeal No. 12-RLM-Cus-Jpr-2023 dated 19.04.2023, by M/s Mahakaal Jewels Pvt. Ltd. Jaipur (hereinafter referred to as the appellant) wherein the customs duty of Rs.64,866/-, fine of Rs. 54 lakhs and Rs. 2 lakhs along with penalty was imposed on the appellant. The brief facts of the case are the appellant filed a Bill of Entry No. 686 9180 dated 28.12.2021, for clearance of 14474.45 carat Emerald Rough Stone falling under CTH71031031. The consignment was examined by the customs officer, in the presence of the authorized customs broker. During the course of examination, nine packets of Emerald Rough Stone, as declared in Bill of Entry was found and three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested the Revenue to return the consignment of Natural Rough Diamond to the shipper/overseas suppliers, which was otherwise permitted vide Circular No. 53/2003-Cus. dated 23.06.2003. 3. The learned counsel further stated that the entire consignment was got valued by Shri Kamal Kant Parekh, said to be a Government approved valuer, in the presence of the Director of the appellant. However, the appellant was not permitted to confront or cross examine the said valuer. No cogent reasons were given for rejecting the declared value, and for getting valuation done of Natural Rough Emerald wherein the value was correctly declared. He relied on the following decisions in support of his contentions: (i) Bikash Saha Vs. CC, Kolkata 2020 (371) ELT 763 (Tri.-Kol.) (ii) Rubal International Vs. CC, New Delhi 2022 (381) ELT 93 (Tri.-Del.) (iii) PCC, ACC Import Vs. Wall Street Impex CESTAT Final Order dated 15.12.2022. (iv) Motor Industries Co. Ltd. Vs. CC 2009 (244) ELT 4 (SC). The learned counsel contended that no legally permissible reason was given for rejection of the declared value of Natural Rough Emerald, and merely states that the same was done as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relied on the following decisions: (i) DJP International Vs. CC, Delhi 2017 (350) ELT 294-(Tri-Del). Maintained by Apex Court in 2017-350-ELT-A65-SC. (ii) Bikash Saha Vs. PCC, Kolkatta 2020 (372) ELT 884-(Tri.-Kol). (iii) Chahat Trading Corp. Vs. CC, New Delhi 2017 (357) ELT 937 (Tri.-Del.). 8. The learned counsel further submitted that no case had been made out of any mens rea or mis-declaration with intent to evade any duty, as the total duty liability was only Rs.2,747/-. In this regard, the learned counsel relied on the decision in the case of M/s Devgan Mechanical Works Vs. CC, Ludhiana 2021-TIOL-330-CESTAT-CHD. 9. Learned Departmental Representative submitted that it is clear from the facts of the case that an attempt was made to clear of undeclared good (i.e. Natural Rough Diamond), which are restricted in nature, by the importer. The Policy condition No. 3 of Chapter 71 of ITC (HS) 2017, Schedule-I (Import Policy) clearly says that import of rough diamond shall be permitted only if accompanied by Kimberley Process (KP) Certificate, as specified by Gem and Jewellery EPC . The importer could not produce the said mandatory certificate. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as import of rough Diamonds is permitted only if accompanied by Kimberley Process Certificate (KP Certificate) as specified by Gems and Jewellery EPC. The undeclared good i.e. rough diamonds weighing 271.40 Ct. was estimated at Rs. 10,98,670/- separately by the Govt. Approved Valuer. He strongly contended that the assessable value of the declared goods was provided in the form of Valuation report and the same was accepted and signed by the importer. 12. The learned Authorised Representative further submitted that it was during the course of examination, the undeclared goods viz. Rough Diamond were found in 3 packets and the same had not been declared in any of the import documents like B/E, Invoice etc. Further, the goods were restricted in nature, which signifies and establishes the involvement of the importer in the attempt to clear the undeclared and prohibited (without KP certificate) goods. The same was also averred from the para 5(i) 5(j) of the statement of the importer recorded under Section 108 of the Customs Act, 1962 of the OIO NO. 53/2022-ADC dated 27.12.2022, whereby it appears the falsification of the signature and fabrication of the invoices and letter provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precious stones at any stage of time, however an expert the valuer may be. Generally, the prices are given with a margin of fluctuation of +/- 20% and the value declared by the appellant was well within this range. It has further been contended that the valuation report of the said Government approved valuer does not specify whether the rate is wholesale or retail sale value or the CIF value. Further, during the course of investigation itself, it has been observed that the valuation cannot be determined under Rules 4 to 7 of Customs Valuation Rules, 2007 as the nature of each stone and its value is distinct and varied, and even the market value cannot be ascertained. Consequently, other than the valuation report submitted by the valuer who does not appear in the panel of Government approved valuers, and there being no other corroborative evidence to establish any undervaluation by the appellant, the transaction value is liable to be accepted. We take note of the fact that the differential value is Rs 80 lakhs approximately, involving a mere duty difference of Rs. 64,866/- only. We find that the Revenue has been unable to lead any evidence before us for the rejection of the transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Bill of Entry is the value referred to above and not merely the invoice price. On a plain reading of Section 14(1) and Section 14(1A), it envisages that the value of any goods chargeable to ad valorem duty has to be deemed price as referred to in Section 14(1). Therefore, determination of such price has to be in accordance with the relevant rules and subject to the provisions of Section 14(1). It is made clear that Section 14(1) and Section 14(1A) are not mutually exclusive. Therefore, the transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e., at the time when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion. 16.1 In view of the above discussions, we hold that the Department has failed to prove that the transaction value/invoice price was incorrect. Consequently, the valuation done by the valuer cannot accepted and is set aside. We now take up the matter relating to the imposition of Rs 50 lakh as RF on the said goods under Section 111 read with Section 118(a) and 119 of the Customs Act, 1962. The relevant provisions of Section 111 are reproduced hereinafter to appreciate the Revenue s contentions:- Section 111. Confiscation of improperly imported goods, etc. The following goods brought from a place outside India shall be liable to confiscation: - (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond issue on imposition of redemption fine on the undeclared Natural Rough Diamonds. It has been argued before us that the Department did not possess any intelligence or information about smuggling of such rough diamond. The import consignment was opened and examined in a routine manner by the customs officer wherein nine packets of Natural Rough Emerald and three packets of Natural Rough Diamond were found. It is on record that the packets were not concealed or hidden in any manner, to allege smuggling. We note that the original adjudicating authority has held that the Natural Rough Diamond was restricted in nature, and the appellant importer could not produce a valid Kimberley Process certificate, hence the goods took on the nature of prohibited goods. Therefore, the original adjudicating authority has gone on to confiscate the Natural Rough Diamonds valued at Rs. 10,98,670/- under Section 111 of the Customs Act, 1962, with an option given to the importer to redeem the goods for re-export on payment of redemption fine of Rs. 2 lakh. It is a fact on record that 3 packets of natural rough diamond were found in the consignment which had not been declared by the appellant. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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