9911796707
TMI Blog2025 (3) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Act on M/s. S.K. Works and Vyapar Private Limited (hereinafter referred to as the "appellant"). A penalty of Rs.24,46,788/- under Section 114A and a penalty of Rs. 50,00,000/- under Section 114AA of the Act were also imposed on Shri Shalabh Jalan, Director of the appellant-company(one of the appellants herein). 2. Aggrieved by the confirmation of the demands and imposition of penalties and redemption fine, the appellants have filed these appeals. 3. The facts of the case are that the appellant-company, M/s. S.K. Works & Vyapar Pvt. Ltd., imported 3 consignments of different consumer goods such as bowl sets, buckle, elastic rope button cells, garment accessories, umbrella, bags, etc., in the month of February, 2014 from M/s. Lakshmi Overseas Hong Kong Limited, Hong Kong. The total value of these consignments was USD 33,293.48 (C&F). Accordingly, the appellant filed 3 Bills of Entry after adding insurance charge as 1.125%, as per norms. The details of the Bills of Entry, as submitted by the appellants, are furnished below: - Sl. No. Bill of Entry No. Date Declared Ass. Value (in Rs.) Admitted duty (in Rs.) 1. 4746451 26.02.2014 5,57,580.65 1,90,593. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 14 of the Customs Act, 1962. 21.3. I order re-determination of MRP/RSP of the goods imported as detailed in Table No. 4 at above in terms of provision to sub-Section (2) of Section 3 of Customs Tariff Act, 1975 read with section 44 of the central Excise Act, 1944. 21.4. 1 order demand and recovery of the differential duty amounting to Rs. 24,46,788/- under section 28 (4) of the customs Act, 1962 along with interest under Section 28AA of the Customs Act, 1962 from the importer. 21.5. 1 order appropriation of the already paid duty of Rs. 10,65,171/- and Revenue deposit of Rs. 7,20,695/- and Bond of Rs. 61,71,413/- furnished at the time of provisional release of goods imported vide the said three Bills of Entry towards the duty demand of Rs. 24,46,788/- as detailed in Table No. 5. 21.6. I order confiscation of the goods imported vide Bills of Entry Nos. 4746451 dated 26.02.2014, 4746281 dated 26.02.2014 and 4720638 dated 24.02.2014 and valued at Rs.22,43,617/- Rs. 16,08,490/- and Rs.88,77,874/-respectively (as detailed in Table No. 4 & 5 at above) under Section 111(i), (1) & (m) of Customs Act, 1962. However, the noticee is given an option to redeem the goods under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding value available for identical items and hence, the value could not be determined in terms of Rule 4 of the Valuation Rules, 2007; finally, the value of similar goods has been taken into consideration for re-determining the value under Rule 5 of the Customs Valuation Rules. In this regard, the appellant submits that the invoices submitted by the importer-firm at the time of import has been rejected by the ld. adjudicating authority as false and without any evidence, but sufficient materials were not placed on record by the ld. adjudicating authority for rejection of the invoices issued by the supplier. 7.3. The appellant has also made the following submissions in support of their contentions: - (i) In respect of the allegation at Para 12 of the SCN that the invoice submitted at the time of import was false / wrong invoice, the appellant submits that the supplier had already admitted their mistake in wrong shipment of goods vide a letter dated 22.03.2014. Therefore, the invoice should not be held as false / wrong invoice as the invoice was issued by the supplier themselves. The invoice could only be treated as false if the supplier affirmed that they had not issued those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be rejected in the absence of any allegation of extra payment. In this regard, the appellant cited the following decisions : a) Rajashree Packagers-(2006(195) ELT 254 (Tri-Bang)] in the absence of any allegation of extra payment, transaction value cannot be rejected; b) Bayer India Ltd-[2006(198) ELT 240 Tri)]- Rule 10A of CVR'88 can be invokedonly if there is doubt as to genuineness of transaction value between exporter and importer such as in the event of extra remittance c) CC Vs- Radheshyam Ratanlal-[2006 (202) ELT 500 (Tri-Mum)]- there was no evidence that there was a flow back of any additional funds from the importer to the supplier and hence held the transaction value to be genuine which was affirmed by the Supreme Court-2007(210) ELT A 72. (v) In Para 8 of the Show Cause Notice it has been stated that the contemporaneous import data of identical and similar goods was accessed and it was found that identical/similar items were being imported at higher values than the declared value of the imported goods by the importer. On the other hand, it is stated at Para 9 that as the contemporaneous import data of identical items was not available, the value should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice mentioned that the Director had already explained to the investigation on 11.09.2014 while giving statement that the overseas supplier had admitted their mistake. They had confirmed that due to heavy pressure in their warehouse and just before the Chinese New Year, some mistakes were made during loading of goods of various customers and hence mis-match of the goods occurred. The supplier had also forwarded the amended invoice and packing list which were submitted before the department. Thus, it is clear that there was no mala fide intention on their part to import excess goods. Therefore, the goods should not be liable for confiscation. (ix) The importer further submitted that even assuming but not admitting that re-determination of higher value in terms of Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, is sustainable in law, it did not necessarily mean mis-declaration of value. Mis-declaration of value could sustain in law only when there was remittance of extra payment to the overseas supplier. Remittance of extra payment to the overseas supplier had not even been alleged against them and therefore confiscation under Section 111(m) should not susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st them. The mandatory penalty under Section 114A is imposable where the duty has not been levied or has been short levied by the reason of collusion or any wilful mis-statement or suppression of facts. This means that when the demand is required to be issued invoking larger period of five years under Section 28(4) of the Customs Act, 1962, then only Section 114A comes in the picture. (xvi) Firstly, the subject case was not at all a case of non-levy or short levy of duty/interest. Before provisional release of the goods, excess goods were detected and the higher values of all the goods including the excess goods were estimated by the department itself. Consequently, they have paid the difference of duty or Rs. 7,20,695/- and furnished bank guarantees for Rs. 6,14,827/- Rs. 13,40,963/- and Rs. 5,00,896/-.Thus it is clear that short levy of duty, if any, was properly secured by the department before release of the goods. (xvii) Secondly, the subject demand notice itself is premature as the provisional assessment has not been finalised. (xviii) Thirdly, the subject demand notice has been issued within normal period of one year and there was no need to invoke extended period. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, the appellant had resorted to mis-declaration of the goods imported. He also submitted that the value declared in the invoices were found to be very low as compared to similar goods imported t other locations. Thus, the value has been enhanced on the basis of value of similar goods available at contemporaneous imports. Thus, mis-declaration of the quantity of the goods imported and under valuation of the goods imported have been established. Accordingly, he justified the enhancement of value as per Rule 5 of the Customs Valuation Rules, 2007. Thus, he submits that the goods are liable for confiscation and both the appellants and the Director of the Appellant-company are liable for penalty. 8.1. In view of the above submissions, the Ld. Authorized Representative of the Revenue supported the impugned order. 9. Heard both sides and perused the appeal records. 10. We find that in the present case, three Bills of Entry were filed by the appellant-company and the declared assessable value of the goods was Rs.12,27,175.67. On 100% examination, the goods were found to be in excess quantity than the quantity declared in the Bills of Entry. The details of the goods which were foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as mis-declaration of value. 10.3. Regarding mis-declaration of quantity and non declaration of goods, we observe that the explanation given by the appellant that the supplier has loaded excess goods by mistake is not acceptable. The appellant has failed to produce any evidence to show that the goods loaded in excess were due to mistake of the supplier. The letter dated 22.03.2014 issued by the supplier accepting their mistake cannot absolve the appellant from the mis-declaration and excess quantity of goods found on examination. Had there been no examination, the excess goods could have been cleared without payment of customs duties. In these circumstances, we hold that the mis-declaration of the goods in respect of the three Bills of Entry filed by the appellant is established. Accordingly, we hold that the goods found to be in excess are liable for confiscation. However, from the impugned order we observe that confiscation has been ordered even in respect of the quantity of goods declared in the Bills of Entry, which is not correct. Thus, we hold that the goods found in excess and the undeclared goods alone are liable for confiscation. Accordingly, we uphold the confiscatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. This is not relevant for the purpose of the present appeal as the requirement that transaction value is to be accepted only when the transaction between the importer and the exporter are under fully competitive condition came into force only in September 2001 with amendment of Rule 4(2) of the Customs Valuation Rules. 14. The Commissioner has found that the price at which Mancozeb has been imported into India by others during 1994 to 2000 is steadily increasing and for this purpose, the following evidence has been cited :- Import by United Phosphorous from China and Lupin Agro Chemicals from Netherlands 1994 Rs. 63.52 per kg. 1999 Rs. 77.93 per kg. 2000 Rs. 78.99 per kg. 15. We agree with the appellants that import of mancozeb from other countries cannot be treated as import of identical goods into India as per the definition of identical goods in Rule 2(c). The cif price in US$ is being compared with the price in Indian rupees. It is, however, to be kept in mind that due to rupee devaluation and increase in exchange rate of US$, the cif price in US$ after conversion into Indian rupees always shows a higher price of the goods. Applying the exchange rate of US ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent's contention. The facts clearly state that the supplier was unwilling to fulfil the contractual obligation and it was only with the intervention of the DGFT and the Indian Embassy and with the full knowledge of the authorities in the Custom House that the foreign supplier was forced to supply the contracted quantity. There is no mention in the facts or in the evidence that the subsequent supplies were not made at the contracted value or that there was a flow back of any additional funds from the importers to the supplier. In other words it can be conclusively held that the transaction value declared was the genuine value and there was no other consideration either direct or indirect received by the supplier. Therefore, once the transaction value cannot be rejected as per Rule 4(1) and Rule 3 the same has to be considered as the value for the purpose of Section 14(1). There is no contradiction between the Rules and the provisions of Section 14(1) as has been brought out by the Apex Court in the case of Bureau Veritas cited supra wherein it has been very clearly held that both Section 14(1) and Rule 4 provide that the price paid by an importer to the vendor in the ordinary course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im liable to any penalty. Section 114A provides for imposition of mandatory penalty on the person who is liable to pay the duty and in this case the importing company is liable to pay and penalty has already imposed on the appellant importer under this section. Accordingly, we hold that penalty under section 114A is not imposable on the Director of the appellant company. Penalty can be imposed on the Director of an importing company under Section 112(a) of the Customs Act, 1962 only on the charge of abatement of commission / omission of some act which would render the imported goods liable to confiscation under Section 111 of the Customs Act, 1962. However, since there was no proposal for imposing penalty on him under Section 112(a) in the show cause notice, we observe that penalty under Section 112(a) is not imposable on the Director. 11.2. Regarding the penalties imposed on both the appellants under Section 114AA, we observe that the said section is applicable when there is no existence of goods but the documents are filed fraudulently. In this case, the supplier has agreed that the documents issued by him are genuine, Accordingly, we hold that Section 114AA of the Customs Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
