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TMI Blog2024 (5) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... es were issued to many parties including the present appellants wherein the value was proposed to be enhanced and consequential duty demand was proposed along with penalty and interest. The import were made at Kandla Port as well as Mundra Port however the Adjudication order was passed by a common adjudicating authority. The show cause notices were adjudicated and the undervaluation was confirmed and consequently the differential custom duty demand, interest thereon and penalties were imposed on the importer as well as on the persons involved in the importer firm, therefore, the present appeals filed by the appellants. 2. Shri Amit Laddha, learned counsel appearing on behalf of the appellants, at the outset, submits that in the present appeals there is no need of elaborated arguments for the reason that under a same investigation and the documents which are basis for the demand raised are common in all the present appeals as well as in the case of Beena Sales Corporation. He submits that the case of Beena Sales Corporation has been decided by this Tribunal vide Final Order No. A/10376/2019 dated 26.02.2019 by giving a detailed analysis of entire evidence and detailed findings, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to in such annexure were said to have been found by the investigating authority from the premises of Shri Rajendra Agrawal and Shri Avinash Jindal at the time of search in respect of other importers. Also statement of Shri Deepak Maloo of Appellant concern has also been relied upon. 7.1. As far as documents seized from Shri Rajendra Agarwal and Shri Avinash Jindal are concerned, preliminary we find that the said persons has refused the veracity of such documents. Also both of these persons in their cross examination has retracted from their statements. They refused that they maintained any accounts or ledger of the appellant on behalf of the suppliers or the importers. Shri Rajendra Agarwal, in his cross examination in respect of data / e-mails retrieved from the hard disc stated that he did not know how to operate the computer and he never made any handwritten entries over the documents. With regard to his signing the seized documents, he stated that he had signed the documents without seeing the contents on the insistence of the officers. Shri Avinash Jindal, in his cross examination, stated that he was only a commission agent as well as he is in business of imports, but nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dra Agarwal and Shri Vineet Jha , Accounts Asst. of Shri Rajendra Agarwal are not corroborated by any evidence and thus cannot form the basis for alleging under-valuation as held in case of Akshay Exports Vs Commissioner 2003 (156) ELT 268 and Galaxy Funworld 2006 (206) ELT 800. Further the statement of Shri Vineet Jha cannot be relied upon as he was not cross examined. In case of KARAN TRADERS 2016 (339) E.L.T. 249 (Mad.), the Hon'ble High Court of Madras has held that if a person is not made available for cross examination his statement cannot be relied upon. 7.3. We find from the tender documents of M/s Prime Timbers and M/s Janki Exports, who were awarded the tender by the Tanzanian Govt, that the tenders were awarded @ $ 95 to $ 120 per CBM. After cutting and processing, the average cost of yielded material comes to $ 160 to $ 200 per CBM, thus, enhancing the value by 60% . Considering the ocean freight and other charges and transportation of goods to India, the price would be around $ 300 per CBM. Adding 10% profit margin, the price of the goods would be around $ 330 per CBM whereas, the Appellant imported the same material at $ 350 to $ 400, which is quite normal. Thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ata/01/Account 26.01.10" report located in file path "live data/01/Accounts/Ambrish Bhai" and import bill located in the file path "live data/02/Agarwal-Teak 19.01.2010" found in hard disk recovered from Shri Rajendra Agarwal. It is alleged that the actual value of imported timber was found to be higher than the declared valued and relied upon the statement of Shri Rajendra Agarwal and Shri Deepak Maloo. 7.5. We find that the statement of Shri Rajendra Agarwal has been denied by him. In respect of "A/c Export Trading", the document does not show the rates at which the goods were purchased nor the Appellant was questioned about the same during investigation. The billed quantity and amount in the document located in file path "live data/01/Agarwal-Teak 19.01.2010 and "livedata/01/Accounts/Ambrish Bhai" does not match. The quality mentioned in file path "live data/02/Agarwal-Teak 19.01.2010" is for "Ripper" quality timber whereas the show cause notice alleged that it is "Repla" quality. Even though the aforesaid records are in respect of 12 containers but the prices in each document varies. In case of "Repla" quality of Timber the documents mentioned in contained different prices of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal stands retracted. The statement of proprietor of the Appellant concern Shri Deepak Maloo, who accepted under-valuation cannot be the basis to conclude that the goods were under-valued as it is not corroborated with any independent evidence. 7.7. It is also a fact that at the time of importation the goods were reassessed by the Customs Authorities after examination and the value was enhanced. In case of Bill of Entry No. 155709 dated 02.07.2010, reliance was placed upon emails of Shri Avinash Jindal to allege that the values and quantities declared in the said e-mails were correct and that the values declared by the Appellant were much lower. We find that the enhancement of value is not proper as the said document is not corroborated by any independent evidence. No evidence is forthcoming that the value and quantity of goods mentioned in the invoice are final or agreed upon or it was not changed subsequent to sending of the invoice. Even the quantity shown in all the containers are same, which is not possible. Further, the quantity mentioned in the e-mail does not match with the quantity mentioned in the bill of entry. At the time of importation, the goods were re-assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iner no., PIC, CBM, invoice, rate US$ and size. The remaining two columns do not have heading. For enhancing the value, figures mentioned in one of the un-named columns has been used without ascertaining as to what this figure actual meant. Shri Avinash Jindal was never questioned or was asked to clarify as to what the unnamed figures represent. It is also found that the goods at the time of importation was re-assessed and the value was enhanced from US$ 350 to US$ 375. In view of such circumstances, there is no reason to enhance the value. 7.9. In case of Bill of Entry No. 4794 dated 30.09.2010, the Revenue has relied upon the e-mails from Shri Avinash Jindal to Leo Timbers. The e-mail contains information regarding container number, number of pieces, CBM, average rate and amount that has been alleged to be corresponding to the materials imported by the Appellant. On the basis of such e-mails and statement of Shri Deepak Maloo, it was held that the goods were under-valued. We find that the material mentioned in e-mail was not imported by the Appellant. None of the container numbers or any particulars identified in the e-mail corresponds to any of the containers imported by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctually made to Shri Avinash Jindal or even if the payment was made, it was on what account . In absence of any confirmation from Shri Avinash jindal or from Shri Deepak Maloo about the authenticity of such papers, no allegation can be made against the Appellant. A hand-written page from the made-up file of Shri Avinash Jindal has been made as basis for alleging that the Appellant imported Tanzanian timber from Shri Avinash Jindal through one container of 1" material of 14.556 CBM at US$ 391 per CBM, one container of "silli" material of 22.329 CBM at US$ 785 per CBM. We find that there is no evidence that the material mentioned was imported by the Appellant as there is no corresponding bill of entry. The only evidence is the statement of Shri Avinash Jindal, however, the same has been retracted in cross examination and , thus, cannot be relied upon. 8. In some cases for alleging undervaluation, reliance has been made upon the e-mail between Shri Avinash Jindal and Shri Sunil Gupta on account of Timber allegedly purchased by the Appellant. However we find that the Appellant was not a party to such e-mails. The Appellants were never shown these e-mails during the questioning. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant, no incriminating document was found. 10. Similarly in case of packing lists of containers of Tanzanian timber found in the hard disk of Shri Rajendra Agarwal, on the basis of which the demand was made against the Appellant, we find that the Appellants were never shown the above records nor their statement was recorded. It has been alleged that the accounts statement found from the hard disk of Shri Rajendra Agarwal indicates the rates at which he purchased the material from one Shri Ambrish Bhai. However, we find that these transactions are of private documents of Shri Rajendra Agarwal with no corroboration from the Appellant. Further the transactions in respect of Appellants were listed under the sub-heading "Through Bank", which even the investigating authority stated as official payment. The name of the Appellant does not appear in sub-heading "Cash", which clearly shows that the imported material was not undervalued by the Appellant. Shri Deepak Maloo, proprietor of the appellant in his statement was not questioned about such statements. 11. The SCN has also relied upon packing list of 2 containers of Timber from file path "livedata/01/2x20containers packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with them so as to undervalue or mis-declare the imported goods. 12. Further, the Appellant have imported Timber even after the disputed period more or less at the same price at which the Appellant imported the goods in disputed period, as we find from the data submitted by the Appellant, there is no specific evidence that the prices were influenced by non-commercial consideration. In case of M/s Oswal Fats & Oils - 2007 (220) ELT 795, the Tribunal has held that the price of the goods would not remain same for the imported goods when the prices fluctuate and the prices in a particular situation can be rejected only when there is information or evidence that the transaction was not a commercial transaction. We find that the Appellant has given the import data of Timbers from the same country and same size and similar period, which shows that there are a number of instances and evidences of contemporaneous imports which are of the same price as declared by the Appellant. In terms of Rule 3 the transaction value has to be accepted unless it falls under the exceptions carved out in Rule 3 (iii) of Custom Valuation Rules. Since this is not the case the transactional value has to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action value in terms of Rule 4(2) of the Customs Valuation Rules, 1988. The case-laws cited by the appellants are relevant. It is not the case of the Revenue that the appellants had paid more than what has been reflected in the invoices. Investigations have not brought out any evidence against the appellants in this manner. It is further seen that the insurance covers the value of the goods enhanced by 10% as per the international practice. Further, we find that reliance has been placed on photocopies without proper signature or official seal of the foreign Customs officers. It has already been held in M/s. Truwoods Pvt. Ltd. case, cited supra, that such documents cannot be relied on to enhance the declared value. Further, we have seen that the appellants have given enormous evidence to show that the value of contemporaneous imports in respect of other importers is more or less the same as those of the appellants. In these circumstances, we do not find any valid reason for enhancement of the Transaction Value. Further, the documents received from M/s. MSAS Blue Skies in respect of M/s. Maxworth Plywood Pvt. Ltd. has not been supplied to the appellants and the lower authority has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be done based on Section 14 itself. In the present case, the Department has charged the respondent-importer alleging mis-declaration regarding the price. There is no allegation of mis-declaration in the context of the description of the goods. In the present case, the allegation is of under-invoicing. The charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared 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 transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment in support of its allegation of under-valuation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore, the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The 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. 7. Applying the above tests to the facts of the present case, we find that there is no evidence from the side of the Department showing contemporaneous imports at higher price. On the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice, the Department invoked Rule 8 on the ground that the invoice submitted by the importer was incorrect. In Eicher Tractors (supra) this Court observed that Rule 4(1) of the Customs Valuation Rules refers to the transaction value. Utilization of the word „the" as definite article indicated that what should be accepted as the transaction value for the purpose of assessment under the Customs Act is the price actually paid by the importer for the particular transaction, unless it is unacceptable for the reasons set out in Rule 4(2). In the said judgment, it has been further held that, the word „payable" in Rule 4(1) also refers to the "transaction value" and payability in respect of the transaction envisaged a situation where payment of price stood deferred. Therefore, this decision of the Supreme Court directs the Revenue to decide the validity of the particular value instead of rejecting the transaction value. We wish, however, to clarify that it is still open to the Department based on evidence, to show that the declared price is not the price at which like goods are sold or offered for sale ordinarily, which words occur in Section 14(1). Lastly, it is im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced in comparison with the contemporaneous imports after physical inspection and examination of the goods. In such case, there is no reason to doubt the declared value as the goods were permitted to be cleared after physical examination. The Appellant has made payments through letters of credit and there is no evidence of having made payments to Shri Rajendra Agarwal or Shri Avinash Jindal on behalf of the suppliers. In such case, the value cannot be discarded. The Appellant has also annexed the prices of imported goods in the domestic market and we do not find any major difference between the declared price and the sales price in local market. There is no evidence acquired from the Appellant such as private records or records of any payment made in cash or recovery of any unaccounted cash which can be supported the cases that the Appellant has indulged in under-valuation. From the difference between the declared value and the price at which the goods were sold in the domestic market, there appears to be a normal profit margin. The Revenue has not investigated even a single buyer, who has purchased such imported goods from the Appellant, to ascertain the correct position. The Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply the price of comparable or similar goods as per the Customs Valuation Rules. However, the dispute arises on the sole ground that the chemical composition of such comparable goods relied upon by the department as contemporaneous imports was so widely different from the chemical composition of the goods imported in these cases by the appellants that it would not be correct to hold the two sets of goods as comparable. We find that ld. Advocate has in detail submitted the chemical composition as per the Analysis Certificate on record which have not been disputed. Comparison of these show that whereas any cost of imports relied upon by the department the concentration of major Vitamins was many times lower in the goods imported from both Pingtai as well as Zuelling when compared to the concentration of similar Vitamins in the products imported by these appellants. We have seen these Analysis Certificates on record and we find that the difference between the two is very wide and certainly not marginal. We find that the major value element of such Vitamin Mixes is derived from the active ingredients in such ingredients namely the major Vitamins and not the fillers and other impurities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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