TMI Blog2023 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have got the goods shifted to a Customs bonded warehouse under section 49. The appellant s contention that the rejection of the transaction value under Rule 12 was not correct holds no water. The values declared in the Bills of Entry were doubted because they were far lower than the values of the contemporaneous imports available in the NIDB. When these were shown, the appellant accepted valuation on the basis of the NIDB data. Therefore, rejection of the transaction value as per Rule 12 is absolutely correct - The appellant s contention that valuation should have been done as per Rule 3 is not correct because, Rule 3 is subject to Rule 12 under which the transaction value can be rejected as has been done in this case. Having rejected the declared assessable value under Rule 12, the department sought to re-determine it under Rule 5 based on the contemporaneous value of similar goods imported into the country. It needs to be noted that since the imported goods were miscellaneous motors of various specifications there cannot be identical goods to determine duty as per Rule 4 and hence determining duty on the basis of values of similar goods under Rule 5 is fair and proper. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valued at Rs. 48,36,860/- and the redemption fine imposed was Rs. 10,00,000/-. The seized goods imported under Bill of Entry dated 17.2.2009 were valued at Rs. 63,09,086/- and the redemption fine imposed was Rs. 12,50,000/. In the factual matrix of this case, the fines imposed are fair. Order holding the goods imported under the five past Bills of Entry liable to confiscation and imposition of redemption fine since they were not available - HELD THAT:- If the goods are not available neither can the government take over the goods nor can it return them to the owner or payment of fine. The case of the goods imported under the above two Bills of Entry was different as they were seized and were provisionally released on execution of a bond and bank guarantee. The bond and bank guarantee are meant to cover the redemption fine, if any, imposed if the goods are confiscated and released. Penalty on the importer under section 114A - HELD THAT:- As it is found that the demand of differential duty under section 28 in respect of the past Bills of Entry cannot be sustained, the penalty under section114A as well is set aside. As far as the duty on the two current Bills of Entry are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 28(11), the officers of DRI and others were retrospectively empowered to issue notices for demand of duty under section 28. Subsequently, there was another judgment by the Supreme Court in Canon India deciding the question of competence of officers of DRI to issue an SCN under section 28 and the Review Petition filed by the Revenue against the judgment is pending before the Supreme Court. Further, in the Finance Act, 2022, some retrospective amendments were also made to empower officers of DRI and others to issue notices under section 28 of the Customs Act. The vires of these amendments are also said to be challenged before the Supreme Court. 3. However, in this case, both sides wanted to argue the matter only on merits and hence the question of jurisdiction of the officer two issued the Show Cause Notices [SCN] has not been argued nor are we examining it. 4. M/s. Javeria Impex India Pvt. Ltd. [Importer], the appellant in Customs appeal no. 3/2011, is aggrieved by the Order in Original [Impugned order] dated October 8, 2010 whereby differential duty was demanded on the goods imported by it under two Bills of Entry dated 09.02.2009 and 17.02.2009 (hereinafter called cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forty five lacs two thousand four hundred ten only) covered under Bills of Entry Nos. 760587 dated 14.01.09, 746857 dated 17.11.08, 725687 dated 30.08.08, 708103 dated 04.07.08 and 698659 dated 28.05.08 are also liable for confiscation under Section 111(m) of Customs Act, 1962. However, as these are not available, I impose redemption fine of Rs.30,00,000/- (Rs. Thirty lacs only) in lieu of confiscation under Section 125 of Customs Act, 1962. (f) The differential duty amounting to Rs.51,73,595/- pertaining to seven Bill of Entry 7668815 dated 17.02.09, 766759 dated 09.02.09, 760587 dated 14.01.09, 746857 dated 17.11.08, 725687 dated 30.08.08, 708103 dated 04.07.08 and 698659 dated 28.05.08, is hereby confirmed. The importer is directed to discharge duty liability alongwith statutory interest under Section 28AB of Customs Act, 1962. (g) I impose a penalty of Rs.59,76,148/- (Rs.Fifty nine lacs seventy six thousand one hundred forty eight only) representing equal amount of duty plus interest on M/s.Javeria Impex India Pvt. Ltd., D-21, DDA Colony, West Gorakh Park Extn., New Zafrabad, Shahdara, Delhi under Section 114A of Customs Act, 1962. In case the importer avails the option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in NIDB was Rs. 32,827/- and the value determined by the Chartered Engineer was Rs. 30,000/-. Similar large variations were found in the values of all the other motors. 7. Therefore, the goods imported under the two Bills of Entry were suspected to be undervalued and hence liable to confiscation under the Act and were seized under section 110 of the Act but they were later released provisionally on execution of bonds and bank guarantees. 8. The officers of SIIB also scrutinized five of the past Bills of Entry of similar goods imported by the appellant between 28.5.2008 and 14.1.2009 which had already been cleared and they came to the conclusion that they were also similarly undervalued and accordingly, the values of the goods imported under the five Bills of Entry and the corresponding values of similar goods under the NIDB database were tabulated as Annexures C, D, E,F and G to the SCN. 9. Statements of Shri Qasim were recorded under section 108 of the Act on 24.2.2009,25.2.2009 and 24.3.2209. In his statements with respect to the Bill of Entry dated 9.2.2009, he said that the declared value was Rs. 11,85,733/- compared to the value of Rs. 48,36,860/- of contemporaneous i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declared value. The values at which the goods were assessed by the department in these Bills of Entry were lower than what was proposed in the SCN in this case. 13.3 The Commissioner of Customs wrongly rejected the declared value under Rule 12 and no proof of contemporaneous import of similar goods at higher values was relied upon. The expert opinion is vague and is not based on any proof of similar import at higher values. 13.4 There was no admission of higher values by the appellant in the two statements made. No hawala payment or direct or indirect payment other than the declared value was noticed to substantiate the charge of mis-declaration of value by the department. Therefore, the allegation of mis-declaration is arbitrary and whimsical. 13.5 The adjudicating authority did not produce any evidence showing the alleged relied upon NIDB data. The department did not produce catalogues of the goods imported in the contemporaneous imports whose values were relied upon for re-assessment so that the appellant could compare the specifications. 13.6 In the absence of detailed information such as Bills of Entry, invoices, examination reports, etc. of all the cases whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.2.209 and 24.3.2009 under section 108 of the Customs Act. In these statements, which have not been retracted till date, the appellant accepted the re-determination of values. 14.2 The values of contemporaneous imports of goods were comparable to the values determined by the Chartered Engineer. The differential duty was calculated accordingly. 14.3 The values of the goods imported under the five past Bills of Entry were also determined accordingly. 14.4 Once the appellant accepted the enhanced value in writing, it was binding on both sides as per section 147. In fact, there was not even a need to issue any speaking order as per section 17(5) of the Act. 14.5 There was no forced acceptance of the valuation based on the NIDB data. If the appellant did not agree to the re-determination of value, it did not have to accept the proposed value or it could have paid duty under protest. If the appellant wanted to get the goods cleared while not accepting the values proposed by the department, it could have also got the goods provisionally assessed pending finalization of assessment. If it wanted to avoid demurrages, it could have got the goods shifted to a Customs bonded ware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty on the importer under section 114A sustainable? f) Is the imposition of penalty on Shri Qasim under section 112(a) sustainable? Rejection of transaction value and re-determination of value in respect of the two current Bills of Entry 17. The case of the appellant is that the goods should be valued as per transaction value as per Rule 3 as there is no evidence of any payment through Hawala or any other direct or indirect payment by the importer to the overseas seller and no evidence to this effect was put forth by the Revenue. It is also its case that the appellant accepted the values proposed by the Revenue to avoid demurrages and ensure quick clearance. It is further its assertion that it has not been provided with copies of the Bills of Entry, invoices, catalogues, etc. whose values were used to reject its transaction value and therefore, there is no comparison of the value of the goods. It also asserts that the Chartered Engineer s certificate is vague and should have been rejected. 18. The case of the Revenue is that once the appellant accepted in writing the proposed transaction value based on the NIDB data, it cannot be permitted to play cat and mouse game ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value , and determination of value for the purposes of this section. 22. The Rules were framed as per the second proviso to sub-section 1 of section 14. These are 13 Rules in all of which Rules 1 and 2 are Preliminary rules. Rule 3 states that subject to Rule 12, the value shall be the transaction value adjusted according to Rule 10. Rule 10 provides for certain costs to be included in the transaction value. Rule 12 provides for the proper officer to reject the transaction value if he has reason to doubt its truth and accuracy. Thus, unless the proper officer rejects the transaction value under Rule 12, valuation has to be based on transaction value as per Rule 3 with some additions, if necessary, as per Rule 10 . 23. Rule 3 further provides that if the valuation cannot be done under that Rule, i.e., as per the transaction value with additions as per Rule 10, then it must be done sequentially under Rules 4 to 9. Rule 4 provides for the valuation to be done on the basis of identical goods. Rule 5 provides for the valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is rejected and there is no value of identical goods or similar goods and if it is also not possible to determine the value through deductive method or computational method, then value may be determined through the residual method by the officer following the above principles (Rule 9). 24. The next question which arises is when can the proper officer reject the transaction value. Rule 12 reads as follows: 12. Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask 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 declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper officer may raise doubts about the truth and accuracy of the transaction value have been illustrated in explanation 1 (iii) to Rule 12. The list is inclusive and not exhaustive. 26. In this case, the officers received intelligence that the motors imported by the appellant were under-valued. Acting on this intelligence, the goods were examined in detail and they were found as declared in the two Bills of Entry but their values appeared to be too low. The importer was asked for evidence to support their values but it could not produce anything other than the invoices. The declared values were compared with the values of similar goods imported through several ports across the country as available in the NIDB and it was found that the declared values were, indeed, quite low. A Chartered Engineer Shri Pankaj Gupta was asked to inspect the goods and give his opinion on the value of the goods and he did so. The values determined by the Chartered Engineer were similar to the values found in the NIDB. 27. In this factual matrix when the officers had, in the first place, a reason to doubt the truth or accuracy of the transaction value. They called for further information fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined by a Chartered Engineer who submitted his report dated 23.2.2009. Another statement of Shri Qasim was recorded on 25.2.2009 in which he was shown the Chartered Engineer s certificate as well as the charts showing the values as per the NIDB data. In his statement, he, inter alia, stated as follows: .. I have been shown the chart prepared by the Customs officials on the basis of the Chartered Engineer report according to which the value of the imported goods is Rs. 44,01,050 and the Customs duty on this value comes to Rs. 10,51,625/- I have seen the Chartered Engineer certificate Ref no. PG/CRT/424/IMP/2008-09 dated 23.02.2009 and I have signed the same in token of its correctness. I have also been shown the chart prepared by the Customs officers on the basis of NIDB data as per the chart the assessable value of my imported goods i.e., 886 pieces of assorted electrical motors of different KVA vide Bill of Entry No 766759 dated 9.2.09 has been worked out to Rs. 48,36,860/- and the customs duty has been worked out to Rs. 11,56,761/-. I have also signed the statement in token of its correctness. I further state that the value as per the NIDB chart is correct and I am rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poraneous imports, the relevant data was extracted from the NIDB. The department also referred the matter to a Chartered Engineer to determine the value of the imported goods. In his first statement dated 24.2.2009, Shri Qasim was shown the NIDB data and he requested that the matter may also be referred to an expert to arrive at a fair value. On 25.2.2009, Shri Qasim was shown both the NIDB values and the report of the Chartered Engineer and he made a categorical statement accepting the chart prepared by the Customs officers based on the NIDB data with respect to the Bill of Entry dated 9.2.2009 that he accepts the value proposed by the Customs officers and that he was ready to pay the Customs duty accordingly. Further, he had also indicated that he did not want either an SCN or a personal hearing in the matter. He made a similar statement on 24.3.2009 with respect to the Bill of Entry dated 17.2.2009. None of the three statements have been retracted till date. 32. The appellant is now disputing the NIDB data on the ground that the Bills of Entry of the data and the brochures related to the goods imported under them were not provided to him. The appellant is also asserting that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree statements explicitly state that the statements were voluntary and none of them have been retracted. If the appellant wanted to avoid demurrages and was not willing to accept the valuation, the appellant could have transferred the goods to a Customs bonded warehouse under section 49 and it would not have had to pay any demurrages but only the rent to the warehouse keeper. The appellant could have, as an alternative, disagreed with the re-assessment but paid duty under protest and asked for a speaking order. The appellant could also have sought provisional assessment. All these alternative methods are routinely used in the Custom houses by the importers. 36. Learned counsel also submitted that the NIDB data is not unquestionable and that the Chartered Engineer s certificate is vague and hence should be rejected. In this case, the NIDB data has not only NOT been questioned but has positively been accepted by the appellant. The Chartered Engineer s certificate was also provided to the appellant and he had not disputed it at all. After seeing both and the chart of valuation prepared by the Customs authorities, the appellant explicitly agreed to the valuation. What is accepted ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods, filed an appeal questioning the same values which the appellant had accepted, this Tribunal had in Hanuman Prasad Sons held as follows: 35. The following position emerges from the aforesaid decisions of the Tribunal: (i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valueaion as the consented value, in effect, becomes the declared transaction value requiring no further investigation; (ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; (iii) The burden of the department to establish the declared value to be incorrect is discharged if the enhanced value is voluntarily accepted. 39. The decision in Hanuman Prasad Sons was followed in several other decisions. We, therefore, answer question (a) framed by us in paragraph 16 in favour of the Revenue and against the appellants. Re-determination of value and confirmation of demand in respect of the five past Bills of Entry 40. Insofar as the past five Bills of Entry are concerned, the case of the appellant is that the goods were cleared by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave imported the same goods by 2-3 Bills of Entry from China. At present I am not having the details, I am ready to pay Customs duty for the same if any. 45. A plain reading of the above shows that at the time of recording the statement, the appellant could not remember the exact number of Bills of Entry filed before and also did not have the details. All that is stated is that he is ready to pay Customs Duty for the same, if any. Neither were the details of the Bills of Entry nor the goods imported under them, their declared values, corresponding values of goods in the NIDB and why it became necessary to re-open the assessment which were already finalized shown to the appellant nor were they agreed to. This statement does not support the case of the Revenue in any sense. 46. We, therefore, answer the question (b) in paragraph 16 above in favour of the appellant and against the Revenue. Confiscation of the goods imported in the two Bills of Entry and their release on payment of redemption fine 47. The goods imported under the two Bills of Entry valued at Rs. 48,36,860/- were seized and they were provisionally released on bond and bank guarantee. In the impugned order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 125 requires that, unless the goods are prohibited goods, the owner should be given an option to redeem the goods on payment of fine. If they are prohibited goods, the adjudicating authority has the discretion of allowing redemption or not. This section further restricts the quantum of penalty to the market value of the goods. It is not the case of either side that the motors imported by the appellant were prohibited goods. Therefore, they were released on redemption fine. The seized goods imported under Bill of Entry dated 9.2.2009 were valued at Rs. 48,36,860/- and the redemption fine imposed was Rs. 10,00,000/-. The seized goods imported under Bill of Entry dated 17.2.2009 were valued at Rs. 63,09,086/- and the redemption fine imposed was Rs. 12,50,000/. In the factual matrix of this case, the fines imposed are, in our opinion, fair. 50. We, therefore, answer question (c) of paragraph 16 in favour of the Revenue. Order holding the goods imported under the five past Bills of Entry liable to confiscation and imposition of redemption fine since they were not available. 51. The adjudicating authority also held that the goods imported under the past five Bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. of the duty or interest, as the case may be, so determined: ****** 53. As we have found that the demand of differential duty under section 28 in respect of the past Bills of Entry cannot be sustained, we set aside the penalty under section114A as well. As far as the duty on the two current Bills of Entry are concerned, they are a matter of re-assessment under section 17 and not a case of duty not levied or short levied under section 28. We, therefore, answer question (e) of paragraph 16 in favour of the appellant. Penalty on Shri Qasim under section 112(a) 54. In the impugned order, penalty of Rs. 15,00,000/- was imposed on Shri Mohd. Qasim Khan under section 112(a) of the Act. This section reads as follows: 112. Penalty for improper importation of goods, etc. Any person, (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted with the filing of the two Bills of Entry and the values of the goods in these did not match the imported goods which rendered the goods liable to confiscation under section 111(m). Therefore, Shri Qasim squarely falls under Section 112(a) and is liable to penalty under it. 56. However, in the impugned order, penalty under section 112(a) has been imposed considering the differential duty confirmed in respect of the two current and five past Bills of Entry. We have already found that the demand in respect of the five past Bills of Entry cannot be sustained. We, therefore, find it proper to reduce the penalty on Shri Qasim also from Rs. 15,00,000/- to Rs. 3,00,000/- 57. In view of the above: a) Customs Appeal No. 3/2011 filed by M/s. Jhaveria Impex is partly allowed by upholding the re-assessment of duty in the impugned order in respect of the two current Bills of Entry filed on 9.2.2009 and 17.2.2009 and confiscation of the goods imported under these two Bills of Entry and the redemption fines imposed. The demand of duty on the five past Bills of Entry, confiscation of the goods imported under them and imposition of redemption fine in lieu of the confiscation and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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