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TMI Blog2024 (8) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... was initiated. Out of the total 20 consignments of imports, in respect of 14 consignments of imports from Turkey by the appellants, it was found by DRI that the magnitude under invoicing was about 50 to 60%. A chart showing the details of Declaration No. & Date, invoice number, transaction (TR) Value in $, TR quantity in Kg., Indian value $, India quantity, difference in value $ and difference in quality, and the same was received by DRI from Turkish customs authorities. On examination of the said the data received from Turkish customs authorities and by comparison of Public Ledger & UN COMTRADE data, the DRI concluded that there was undervaluation in import of goods and proposed for redetermination of the value of imported goods, its confiscation and penalty on the appellants by issue of Show Cause Notice (SCN) dated 25.01.2012. In adjudication of the said SCN, learned Commissioner of Customs (Imports) had conformed the proposals made in the SCN. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal. 3.1 Learned Advocate for the appellants at the outset has submitted that the appellants have imported poppy seeds from Turkey by f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained from Turkish Customs authorities to diplomatic channels, there is a presumption that they are admissible evidence as per Section 139(ii) of the Customs Act, 1962. Therefore, he claimed that confirmation of demand of differential duty, imposition of fine and penalty by the adjudicating authority in the impugned order is sustainable. 5. Heard both sides and perused the records of the case. We have also considered the additional written submissions given in the form of paper books by learned Advocate for the appellants as well as Authorised Representative for the Revenue. 6. The short issue for determination before us regarding alleged undervaluation of imported poppy seeds from Turkey and examining whether the impugned order confirming demand of differential duty, and imposing of fine and penalty by the adjudicating authority in the impugned order is legally sustainable or not. 7. It is a fact on record that the entire demand of differential duty is on the basis of documents obtained from Turkish Customs authorities and the chart indicating that there is undervaluation of goods as concluded in the DRI investigation. We also find that the basic issue involving rejection o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from 7th September 2001 and incorporating further qualifications for acceptance of contracted price as 'transaction value' of imported goods, rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 acquired teeth for subjecting declared values to the test of conformity by placing importer on notice that responsibility for establishing acceptability was now shifted and, thereby, disengaging the assessment process from the rigour of compliance with the four conditions, then existing in proviso to rule 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, as directed by the Hon'ble Supreme Court in Eicher Tractors Ltd v. Commissioner of Customs, Mumbai [2000 (122) ELT 321 (SC)/2000 taxmann.com 53 (SC)] at least till the new Rules came into force. 7. According to Learned Senior Counsel appearing for the appellant, no evidence has been adduced by customs authorities to demonstrate that the suppliers of the impugned goods were operating as a cartel and, even if that was so, such oligopoly among suppliers should, contrarily, have caused prices to be higher. It was also submitted that, on mere allegation of cartel op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of value without undertaking detailed deliberations for rejection of declared value is improper. Further reliance was placed on the decision in Radha V Company v. Commissioner of Customs, Mumbai [2003 (156) ELT 810 (Tri. - Mumbai)], in Kanhaiyalal & Co v. Commissioner of Customs, Pune [2004 (163) ELT 33 (Tri. - Mumbai)] and in Dhirish International v. Commissioner of Customs, Bangalore [2005 (187) ELT 94 (Tri. - Bang)]. It was further contended that reliance placed upon the decision of the Tribunal in Commissioner of Customs, Tuticorin v. Rabbani Exports [2011 (271) ELT 533 (Tri. - Chennai)/[2010] 1 taxmann.com 908 (Chennai - CESTAT)] was misdirected as also that on decision of the Hon'ble Supreme Court in Radhey Shyam Ratanlal v. Commissioner of Customs (Adjudication), Mumbai [2009 (238) ELT 14 (SC)/2009 taxmann.com 856 (SC)]. It was also further argued that prices in 'Public Ledger' are of goods of 99.99% purity and hence not acceptable for comparison. 10. Per contra, it is the submission of Learned Authorized Representative that the very fact of cartel operation in Indo-Turkish trade, in the absence of effective rebuttal by the appellants, sufficed for rejecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o preclude similar judicial intervention henceforth; however, the principle of reasonable cause espoused in re Eicher Tractors Ltd may be discarded only at the cost of conferment of limitless empowerment, and more particularly from the unabashed resort to 'residual method' of valuation insensible to the obligation of justifying discard of the preceding modes definitively, on customs authorities tasked with valuation of imported goods. Hence the enunciation in re Eicher Tractors Ltd that, unlike Customs Valuation Rules, 1963, in the successor Rules 'Both Sections 14(1) and Rule 4 provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularized in rule 4(2). Rule 4(1) speaks of the transaction value. Utilization of the definite article indicates that what should be accepted as the value for the purpose of assessment to customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4(2)....if the transaction can be determined under Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of Value of Imported Goods) Rules, 2007 has not retained that special consideration for being resorted to in consignments imported after 10th October 2007. The rejection of declared value is, thus, without authority of law. 14. Turning to the adoption of prices from 'Public Ledger', a survey of the several alternatives in Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 do not admit to such option. Rule 8 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, titled as the 'residual method', envisages determination using reasonable means consistent with the principles and general provisions of the Rules and is further qualified by restriction on adoption of a value on the basis of, inter alia, price of goods for export to country other than India which the 'Public Ledger' makes no pretence of not being. In re Kanhaiyalal & Co, it has been held '6. After hearing both sides and considering the matter, it is found :- (a) the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under clause (ii) of Rule 3. Rule 8 is the residuary provision under this scheme. Rule 9 provides for certain additions to the price actually paid or payable, to arrive at the assessable value. Rule 10 casts an obligation on the importer to declare the details of the value of the goods accurately as also to furnish such document or information as may be required by the proper officer for determination of the assessable value...... The above rule is a rule of procedure, which enables the proper officer to decide as to whether he can accept the declared value of the goods under Rule 4(1) or should proceed sequentially through Rules 5 to 8 for arriving at the value of the goods. If, even after considering the information documents/evidence furnished by the importer, the proper officer has reasonable doubt about the truth or accuracy of the declared value, it shall be deemed that the value of the goods cannot be determined under Rule 4(1). This deeming provision contained in Rule 10A has necessarily to be pressed into service at the very initial stage under the sequential scheme. It has no role after the scheme has worked itself out." Thereafter, the Tribunal held that what was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Therefore, for the above reasons we find that the proceedings of the lower authorities have been undertaken on erroneous premise of law which does not even have the saving grace of proper resort to the relevant method of valuation and requires the impugned orders to be set aside for allowing the appeals." In view of the above decision taken by the Co-ordinate Bench of the Tribunal, we of the considered opinion, that we cannot take a different stand on the matters involving similar set of facts and circumstances. 8.2 In the Civil Appeal Diary No. 40257/2023 filed by the department against the said order of the Tribunal, the Hon'ble Supreme Court had upheld the said order of the Tribunal and dismissed the appeal filed by the department vide its judgement dated 03.11.2023. 9. In view of the foregoing discussions and analysis, and on the basis of the orders of the Tribunal and Hon'ble Supreme Court, we are of the considered view that the impugned order dated 20.01.2014 passed by the Commissioner of Customs (Import), Mumbai is not legally sustainable and the therefore the same is set aside. 10. In the result, by setting aside the impugned order dated 20.01.2014, we allow th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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