TaxTMI 
TaxTMI 
2022 (7) TMI 1556
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....e brief facts of the case are that the Appellant imported 05 consignments of betel nuts from Thailand and 17 consignments of betel nuts from Indonesia. The Commissioner of Customs, Cochin, issued Show Cause Notice, proposing rejection of transaction value, confiscation of goods and violation of Exim Policy, issued through the Director General of Foreign Trade vide Notification No.49 (RE-2006)/2004-2009 dated 20.02.2007, whereby import of betel buts was allowed only through the port of Mangalore. Appellant challenged the said Notification before the Hon'ble High Court of Kerala in W.P.C No. 9624 of 2007 but pending disposal of the case, the said notification was withdrawn. 1.2 The Show Cause Notice, adjudicated by the Commissioner of Customs, Cochin, culminated in Order-in-Original No. 05/2010 dated 17.05.2010, whereby the Adjudicating Authority ordered rejection of transaction value, confiscation of goods, re-determination of value and demanded differential duty, besides imposing redemption fine and penalty. The Appellant challenged this Order-in-Original before the Tribunal and one among other grounds of appeal was the competency of the First Secretary (Commerce), High Commission....
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.... and passed Order-in-Original No.COC-CUSTOM-000-COM-48-15-16 dated 30.03.2016, rejecting the transaction value under Rule 12 (1) of the Customs Valuation Rules 2007, re-determining the same under Rule 9 and ordered confiscation of goods besides imposing redemption fine and penalty, which is impugned in this Appeal. 02. Learned Counsel for the Appellant Shri C.K. Karunakaran, Advocate assisted by Shri. M.S. Sajeev Kumar, Advocate made the following submissions; a) That the Appellant is a regular importer of bulk quantities of Betel nuts from Indonesia and other countries. They imported 2nd quality ungarbled betel nuts from Indonesia. The period of import in all cases are between March 2007 and June 2008 and during the relevant period, imports of the Appellant at declared value of USD 300/MT was allowed. b) That, it is the trite law that justice not only needs to be done but also should appear to have been done and therefore the action of CBEC forcing the officer, who decided to recuse himself from adjudication, was incorrect. c) That when the Letter issued by the very same officer was under challenge, the officer will have a natural bias to uphold the contents of the letter, ....
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....ep their price low in order to compete with Sri Lanka. i) That the Adjudicating Authority rightly rejected the allegations in the Show Cause Notice that the declared value were below contemporaneous imports as there were no imports of identical or similar goods. After rejecting the allegations in the show cause notice and the proposed assessable value thereon, invocation of rule 12 of Customs Valuations Rules was incorrect. The adjudicating authority also held that provisions of rule 4 to 8 can't be applied and hence adopted rule 9 of CVR 2007. However, the adjudicating authority failed to follow the binding precedent in Global Industries case and Keveeyem Supariwala V. Commissioner of Customs. j) That the rejection of declared value under Rule 12 (1) and resorting to Rule 9 was erroneous. The only reason for rejection of declared value was that there were alleged contemporaneous imports through other ports. After the Adjudicating Authority finding that the aforementioned contemporaneous imports didn't relate to similar or identical goods, the Adjudicating Authority couldn't have rejected the declared value and relied on Rule 9. k) That the Rule 9 of CVR 2007 corresponds to R....
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.... Cochin port in the periods that preceded the instant imports would show that the Appellants have imported quantities far in excess of that contracted by M/s. Global Industries. The original authority did not consider the question as to whether the alleged discount in Global Industries would justify the reduction in price from the assessed value of USD 750/MT to USD 275 per M.T (the value as upheld by this Hon'ble Tribunal). The normal price even in Global Industries case could reasonably have been only around USD 300/MT from which the discount granted could have brought the price down to USD 275/MT, as upheld by the Hon'ble Tribunal. To assume, as the adjudicating officer has done, that the discount in Global Industries case had brought the price down from USD 750/MT to USD 275/MT is unreasonable and is an example of total non-application of mind. p) That as regards imports from Thailand, a neighbouring country with a long and free border with Indonesia the declared prices which were much lower was accepted without demur. Without testing the imports from Thailand, Sri Lanka or from Indonesia, the Adjudicating Authority had concluded that the quality, nature etc., were not compar....
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....hat the adjudication was conducted as per the decision of the Board. In support of this contention, learned AR placed reliance on the judgment of Hon'ble High Court of Andhra Pradesh in Mahaveer Tobacco Company V. Asst. Collector Of Central Excise, Guntur [2000 (123) ELT 61(AP)], Bharati Airtel Ltd. V. Commissioner Of Customs [2012 (286) E.L.T 270 (TRI.BANGALORE)] and K.P.Abdul Majeed V. Collector Of Customs & Central Excise, Trichy [1995 (79) ELT 554 (MAD.)]. b) That the Appellant never sought cross examination of the First Secretary (Commerce), High Commission of India, Singapore when the matter was taken up for adjudication in the first round, leading to the issuance of Order-in-Original No.5/2010 dated 17.5.2010, even though there was a contention not to adopt the report of the First Secretary (Commerce). The request for cross examination was raised only after the First Secretary (Commerce), High Commission of India, Singapore took charge as the Commissioner of Customs, Cochin and refused to recuse himself from conducting adjudication. Hence the contention about denial of cross examination is unsustainable. c) That the First Secretary (Commerce), High Commission of India, S....
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....n-identical nature and the same would not absolve or support the undervaluation done by the Appellant. h) That the imports by M/s Integral Traders made between November 2005 to March 2007 showed transaction value in the range of USD 600-1000/MT and the value during the said period for imports from Sri Lanka was also within the range of USD 815-907/MT but the imports made by the Appellant during the period April 2007 to May 2008 was declared to be between USD 225-300/MT. It was further submitted that the possibility of having price for same commodity in one part of the world is high and fluctuating and in the other part it's static is illogical. Therefore, the Adjudicating Authority has rightly found that transaction cannot be ascertained under Rule 3 of Customs Valuation Rules 2007 and hence value was rejected under Rule 12. i) That decision in M/s Global Industries [2011(272)ELT 724 (Tri-Bang)] has no applicability in this case as there existed a contract for bulk purchase from a single supplier. j) That acceptance of transaction value of imports made from Thailand can't be a reason for rejecting the transaction value of the present as prices of products from the countries a....
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....ue or cost of the imported goods at the time of importation, that is, at the time when the goods reach customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price the department has to give cogent reason for such rejection. This is because the invoice price forms the basis of transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, department has to find whether there are any imports of identical or similar goods at higher price around the same time. Unless evidence is gathered in that regard, question of rejecting the invoice price or transaction value cannot arise and in the absence of such evidence, invoice price has to be accepted as the transaction value. In the present case, the Adjudicating Authority, in the impugned order, finds that there are no imports of identical or similar goods at higher rate at or around the same time and therefore he chose not to adopt valuation under Rule 4 to 8 of the Customs (Determination of Value of Imported Goods) Rules 2007. 4.3 In the case of Commissioner of Central Excise and Service Tax, Noida V. Sanjivani Non-Ferrous Trading Pvt Ltd. (2019) 2 SCC 3....
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....or enhancing the price declared by them in the Bill of Entry". Hon'ble Apex Court in case of Commissioner of Customs Calcutta vs. South India Television P. Ltd. reported in MANU/SC/2966/2007 : 2007 (214) ELT 3 (SC) where in para 6, para 7 and para 8 it has been laid down as under:- "6. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Section 2(41), "value" is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. The Customs Valuation Rules, 1988 have been framed only in respect of imported goods. There are no rules governing the valuation of export goods. That must 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 evid....
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....ed. If the charge of under- valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries; collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under-valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department 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 ....
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....e of goods." 4.4 In the case of Global Industries Vs. Commissioner Of Customs, Cochin [2011(272)ELT724 (Tri.Bang)] it was held that in the absence of data relating to the imports of goods of same quality, quantity and commercial level with higher transaction value, contemporaneous import cannot be accepted. In this instant case, Revenue has not placed any data to evidence contemporaneous imports, rather the Adjudicating Authority found that there are no contemporaneous imports. 4.5 In so far as the present case is concerned, the Adjudicating Authority finds that there were fluctuations in the international price of betel nuts during the relevant period and that the value declared by M/s Integral Traders is corroborative. Learned Counsel for the Appellant rightly invited our attention to the observation in the impugned order that the case of M/s Integral Trading was under investigation and the same has not attained finality. Details of import data of M/s M.S. Enterprises, referred to in the impugned order was not made available for confrontation to the assessee and the same is not part of the show cause notice. Our attention was also invited to the absence of quality assessment te....
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....as paid any amount, in excess to the invoice value declared before customs. 4.9 In the case of NPT Papers Pvt Ltd & Others V. C. C. Mundra & Others , (MANU/CS/0120/2021) Tribunal, by following the judgments in Bayer India Ltd. V. Commissioner Of Customs, Mumbai [2006 (198) ELT 240], upheld by Hon'ble Supreme Court [2015 (324) ELT 17 SC] and Tele Brands (India) Pvt. Ltd. V. Commissioner Of Customs (Import) Mumbai reported in [2016 (336) ELT 97 (Tri.Mum)] held that there should be evidence on record to show that the importers have paid directly or indirectly any amount over and above the invoice value. Once it is proved that there is no evidence of extra remittance, transaction value cannot be discarded. 4.10 Learned Counsel for the Appellant submitted that the procedure adopted by the Adjudicating Authority to reject the transaction value is incorrect and against the settled principles of law, in as much as the Adjudicating Authority has relied upon the report of the First Secretary (Commerce), High Commission of India, Singapore, for ascertaining the domestic price of the goods. Ld. Counsel, by inviting our attention to Order-in-Appeal No.3 of 2012 dated 17.8.2012, passed by the ....
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....conclusive and not reliable for valuation. Therefore, placing reliance on this report, even as collateral evidence, for determination or redetermination of value of imported goods, cannot sustain in the eyes of law and therefore we are unable to uphold the arguments of the Revenue. Reliance is placed on the following judgment in this regard:- (i) SRR International V. Commissioner of Customs, Mundra. Reported in MANU/CS/01616/2018 Therefore, we are of the considered view that, in the absence of any quality assessment of the goods, evidences of contemporaneous imports on higher transaction value of identical/similar goods at or about the same time and in the absence of any evidence leading to the payment of any amount directly or indirectly, over and above the invoice value presented before customs, the rejection of transaction value and its re-determination is not in agreement with the procedure established by law.The Order-in-Original is flawed and contrary to law, for it doesn't give any cogent reason for rejecting transaction value in terms of section 14(1) of the Customs Act, 1962 and Rule 12 of the Customs Valuation Rules, 2007. The impugned order is not in accordance with Se....