TMI Blog2024 (3) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... GH SECRETARY 6 [ 2011 (5) TMI 941 - GUJARAT HIGH COURT] has not specifically dealt with the fact of coercion while granting relief of presence of advocate. The series of statements recorded thereafter of the directors are exculpatory. It is thus clear that they were serious doubts on record as to the nature of initial statement and the onus clearly shifted on the department to indicate that the initial statement dated 13.10.2010 was voluntary and same should have been subjected to examination-in-chief by the adjudicating authority, at least in the factual background of the matter before placing reliance on the same. When statement was retracted, the investigating officer instead of pronouncing his own version as to why the statement was voluntarily, should have instead of left this job to be done by the adjudicating authority while adjudicating the matter. Another opportunity before higher officer can be an apt course of action to follow in such situation - it is found that initial statement dated 13.10.2010 could not have been relied upon without discharge of burden by the department of same being voluntary by examination of the entire statement of director by the adjudicating aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 M. Tons at the aforesaid rate. With the second party, a written agreement was entered into for supply of 300 M. Tons to be supplied within one year, also at the same rate. It is in the course of supplies made by these parties that the first two consignments were imported. 3. A search was conducted at the appllant s premises on 15.09.2010. The director of the appellant Shri Ramesh Gidwani was called for interrogation on the next day i.e. 16/9/2010 at the office of DRI, Paldi, Ahmedabad. He remained present. The Director was again asked to come the next day i.e. 17/9/2010. He again remained present. Again on the 17th September, a statement was allegedly placed before him and his signature was sought on it. In the evening, he was given a summons to remain present before DRI, Surat. As per the appellant, the Director also remained present at Surat. The under valuation was accepted by the Director allegedly under coercion and a sum of Rs. 5.00 lakhs was also taken in his statement dated 13.10.2010. The appellant after his statement dated 13.10.2010 was recorded filed a sworn Affidavit dated 18th October 2010 which was sent to the DRI, Ahmedabad Surat retracting various parts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement desired by it. It also denied that the so called evidence recovered from their computer by the DRI had anything to do with the valuation of imported goods or that any additional consideration was ever sent by them. It also referred to man handling by the DRI officials. There is also reference to director being under treatment even in the rebuttal letter dated 22.10.2010. As per the appellants, after they were put under pressure while recording their statement, they approached Hon ble High Court of Gujarat in special civil application. Same was decided on 12.05.2010 in which the Hon ble Gujarat High Court permitted presence of advocate as and when interrogation is sought by the revenue authorities. The advocate was directed to remain within sight but not within hearing range. The Hon ble High Court however, had not commented on the allegation of the petitioner regarding coercion. It was appellant s case that whatever statements were recorded after the direction of Hon ble High Court were clearly explaining their position and were not culpatory like their retracted statement of 13.10.2010. That both for fabrics as well as stamping foils which are the impugned goods, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainable and that the adjudicating authority has correctly evaluated the whole evidenced. In rejoinder, appellant supported their submissions by case relied upon as follows:- 2007 (214) ELT 3 (SC)-COMMISSIONER OF CUSTOMS. CALCUTTA VS. SOUTH INDIA TELEVISION (P) LTD. 2019 (365) ELT 3 (SC)-C.C.E. S.T., NOIDA VS. SANJIVANI NONFERROUS TRADING PVT. LTD. 2018 (360) ELT A192 (Tri-Mum.) affirmed by SC reported at 2020 (371) ELT A249 (SC) 2021 (378) ELT 193 (Tri.-Del.) affirmed by SC reported at (2023) 3 Centax 195 (SC) 2016 (336) ELT 97 (Tri.-Mum.)-TELE BRANDS (INDA) PVT. LTD. VS. COMMISSIONER OF CUS. (INPORT), MUMBAI 2021 (378) ELT 155 (Tri.-Ahmd.)-AGARWAL METALS ALLOYS VS. COMMISSIONER OF CUSTOMS, KANDLA (2023) 2 Centax 44 (Tri.-Ahmd)-NPT PAPERS PVT. LTD. VS. COMMISSSIONER OF CUSTOMS, MUNDRA 2018 (363) ELT 539 (Tri.-Chan.)-SARASWATI KNITWEARS PVT. LTD. VS. COMMISSIONER OF CUSTOMS, AMRITSAR 2016 (337) ELT 232 (Tri.-Chennai)-NATIONAL FRUITS AGENCY VS. COMMISSIONER OF CUS, (EXPORTS), CHENNAI 2016 (344) ELT 436 (Tri.-Mum.)- S.K. DHAWAN VS. COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI. 7.1 We have considered the rival submissions. It is seen that the department s case is based primarily on the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en while examining any statement even under Section 108 and also there has to examination of the statement by the adjudicating authority and then cross of every statement recorded under Section 108, before relying upon the same. That they had also produced medical evidence of various injuries having been treated while making rebuttal of letter of investigating officer in response of their retraction. That the overall circumstances indicated that the statement was recorded under duress and inculpatory portion of statement dated 13.10.2010 deserved to be rejected. That proforma invoice cannot be equated with the real invoice and that there was a mismatch in description in relation to the grade of goods and the goods were B C grade invoice whereas the same were A grade in the proforma invoice stated to have been recovered. It was specifically emphasized that the department had drawn samples of the impugned goods i.e. stamping foils and same did not indicate that the grade of the invoice goods was not B C . It was also mentioned that in relation to polyester knitted fabrics, the price have been similarly treated as undervalued without any evidence and despite evidence to the contrary o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is placed on order of the Hon'ble Tribunal in the case of M/s. Jeen Bhavani International Vs. CC Nhava Sheva - III reported at (2023) 6 Centax 11 (Tri.-Bom) (Para-9). The aforesaid view of the Hon'ble Tribunal is affirmed by the Hon'ble Supreme Court in judgement reported at (2023) 6 Centax 14 (SC) CC Nhava Sheva-Ill Vs. Jeen Bhavani International. 8.4 It was also submitted that the statement of the Director was firstly recorded on 20.09.2010 and second statement was recorded on 13.10.2010. The Director was badly beaten by the Officers on 13.10.2010 and his statement was recorded under threat of arrest, duress and pressure by the Departmental Officers. The Director Shri Ramesh had swelling in his left eye and fracture in nasal bone. The Director had undergone various treatments immediately from 14.10.2010 with reputed doctors and also in the Civil Hospital and had retracted the statement immediately on 18.10.2010. In such facts, the statement could not have been relied. However, the Ld. Commissioner has observed that the same is filed after a delay of five days and hence, the same is afterthought and such belated retraction cannot be considered. 8.5 In this regard, reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to call the person for cross examination with regard to statement made by him. The Adjudicating Authority is first required to examine the person making statement and after conducting his examinationin- chief decide whether statement was voluntary or not and could be admitted as evidence. If this was not done, the statement cannot be relied. Hence also it is submitted that the order confirming demand on retracted statements is bad in law and requires to be quashed. 8.8 It was also submitted that the demand is confirmed on the basis of Proforma Invoices recovered from the computer of the appellants. It was submitted that the aforesaid Proforma Invoices are of A Grade Goods (Table at Page 282), however, the appellants had imported 'B' and 'C' grade goods. Hence, the Proformas cannot be relied for enhancing value of goods. It was also submitted that 4 consignments of goods imported after investigation were seized and samples were drawn vide Panchnama dated 08.10.2010, 22.12.2010, 09.02.2011 and 11.02.2011. The same were sent for testing and analysis to the Central Excise and Customs Regional Laboratory, Vadodara and the report (Page No. 280 Para 8.6) obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14) E.L.T. 3 (S.C.) (ii) CCE ST Noida vs. Sanjivani Non-ferrous Trading Pvt. Ltd. reported at 2019 (365) E.L.T. 3 (SC) (iii) Sarto Electro Equipments Pvt. Ltd. vs. Com. reported at 2018 (360) E.L.T. A192 (Tri. Mumbai) affirmed by Hon'ble Supreme Court reported at 2020 (371) E.L.T. A249 (S.C.) (iv) H.S. Chadha vs. CC (Prev.), New Delhi reported at 2021 (378) E.L.T. 193 (Tri. Del.) affirmed by Hon'ble Supreme Court reported at 2023 (384) E.L.T. 129 (SC) (v) Saraswati Knitwears Pvt. Ltd. vs. CC, Amritsar reported at 2018 (363) E.L.T. 539 (Tri. Chan.) (vi) National Fruits Agency vs. CC (Exporters), Chennai reported at 2016 (337) E.L.T. 232 (Tri. Chennai). In all these judgements, Hon'ble Supreme Court has consistently held that quotations/parallel invoices/ proforma invoices cannot be relied for enhancement of value and the department has to provide data pertaining to contemporaneous import for enhancement of value. 10. No proof of extra payment to foreign supplier 10.1 It was submitted that though the department had extensively investigated the matter and had also seized hard disk of the computer, they could not find any details of extra payment apart from invoice value. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of director Shri. Ramesh K Gidwani was recorded and pattern of the same including the content of the initial statement which while indicating proforma invoice to be correct value did not mention the relevant grade of stamping foils also. The medical evidence about injuries and their treatments were mentioned while rebutting letters of the department in their retraction. We also find that though the Hon ble High Court of Gujarat has not specifically dealt with the fact of coercion while granting relief of presence of advocate. The series of statements recorded thereafter of the directors are exculpatory. It is thus clear that they were serious doubts on record as to the nature of initial statement and the onus clearly shifted on the department to indicate that the initial statement dated 13.10.2010 was voluntary and same should have been subjected to examination-in-chief by the adjudicating authority, at least in the factual background of the matter before placing reliance on the same. 13.1 Considering all the aspects and facts of the matter, we find that when statement was retracted, the investigating officer instead of pronouncing his own version as to why the statement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumptions especially since he himself has stated on various occasions that there is no undervaluation and these are quotations. Tyres are regularly imported all over the country and therefore the Department could have easily garnered evidence of contemporaneous imports which it admittedly did not do. Otherwise also, Mr. Chadha has not been examined by the Adjudication Authority before placing reliance on his statements, which was mandatorily required to be observed in compliance of Section 139 of the Customs Act. It is also trite law that quotations cannot be the basis for re-determining the value of goods as held by Ld. CESTAT in Nava Durga Enterprises v. Commissioner of Customs (Sea Import) - 2013 (295) E.L.T. 277. Thus the allegation of undervaluation is not proved. From the above, it is clear that not only Customs Valuation Rules have to be sequentially followed but also that the electronic evidence can only be relied upon by the department as per provision of Section 138C which lays down various conditions in sub clause (2) about which there is no mention of the same having been followed. 13.2 We therefore hold that in the facts and circumstances of the matter enhancement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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