Custom, Excise & Service Tax Tribunal
Swastik Stockists And Traders Private ... vs Kolkata-Port on 18 August, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Customs Appeal No. 77102 of 2017
(Arising out of Order-in-Original No. Kol/Cus/Commissioner/Port/33/2017 dated
18.09.2017 passed by the Commissioner of Customs (Port) Custom House, 15/1,
Strand Road, Kolkata 700 001)
M/s. Swastik Stockists And Traders Pvt. Ltd. : Appellant
S. N. Banerjee Road, 3 Floor,
RD
Room No. 38, Kolkata 700014
VERSUS
Commissioner of Customs (Port), Kolkata : Respondent
Custom House, 15/1, Strand Road,
Kolkata 700 001
AND
Customs Appeal No. 77103 of 2017
(Arising out of Order-in-Original No. Kol/Cus/Commissioner/Port/33/2017 dated
18.09.2017 passed by the Commissioner of Customs (Port) Custom House, 15/1,
Strand Road, Kolkata 700 001)
Mr. Suresh Agarwal : Appellant
106A, S. N. Banerjee Road, 3RD Floor,
Room No. 38, Kolkata 700014
VERSUS
Commissioner of Customs (Port), Kolkata : Respondent
Custom House, 15/1, Strand Road,
Kolkata 700 001
APPEARANCE:
Dr. Samir Chakraborty, Sr. Advocate
Shri Arnab Chakraborty, Advocate
For the Appellant(s)
Shri Faiz Ahmed, Authorized Representative
For the Respondent
CORAM:
HON'BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs.77325-77326/2025
DATE OF HEARING: 12.08.2025
DATE OF PRONOUNCEMENT: 18.08.2025
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Appeal Nos.: C/77102 & 77103/2017-DB
Order: [PER SHRI K. ANPAZHAKAN]
Brief facts of the case are that during the
period from 23.02.2011 to 01.07.2014, M/s. Swastik
Stockists and Traders Private Limited, Kolkata
(hereinafter referred to as the "appellant") imported
multiple consignments of carpets, speakers, and
blankets from overseas suppliers in Indonesia and
Hong Kong, China. The said goods were imported
against proper shipping documents, including
commercial invoices, and Bills of Entry drawn in
terms of the Customs Act, 1962 ("the Act").
2.1. All the subject consignments, save for one
consignment of speakers imported against Bill of
Entry 6987461 dated 1.6.2012, that was intercepted
by the DRI post-commencement of the investigation
against the appellant, were imported and cleared
following assessment and inspection by the customs
authorities, without any objection being raised at the
time in respect of the declarations made by the
appellant as to description, classification, quantity or
value.
2.2. On 08.02.2012, the officers of Directorate of
Revenue Intelligence (DRI), Kolkata Zonal Unit,
undertook a search of the office and residential
premises of the late Director of the appellant, Suresh
Agarwal (Ghoriwala). During the course of such
search, and in the period thereafter, several
statements of the said Director were recorded by the
DRI, which were purported to be confessional in
nature, inasmuch as the Director allegedly admitted
to undervaluing some imports. In addition to
obtaining statements of the said Director, the officers
of DRI allegedly also recovered two Proforma
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Invoices from the appellant's residence, purportedly
obtained information from overseas customs
authorities of Indonesia and China, during the course
of the subject investigation. Four months after the
stated search, the DRI examined the said
consignment of speakers sought to be imported
under the stated Bill of Entry 6987461 dated
1.6.2012 and detained the same apprehending that
the same had been misclassified by the appellant.
The said consignment of speakers was subsequently
released provisionally against PD Bond No. S37(VB)-
35/2012A (PD) and Bank Guarantee (BG) No.
S37(VB)-03/2012A (BG) both dated 02.11.2012.
2.3. On completion of the Investigation, a Show
Cause Notice dated 01.09.2014 was issued to the
appellant, followed by an addendum thereto issued
on 08.03.2016. In the Notice, it was alleged that
during the said period the appellant had imported
the said goods by deliberately undervaluing them
with intent to evade payment of customs duty, and
in the case of multi-media speakers, by also
misclassifying them to suppress CVD liability on the
retail sale price basis. The SCN proposed rejection of
the declared assessable transaction values under the
Customs Valuation (Determination of Value of
Imported Goods) Rules, 2007, redetermination of
value, and recovery of differential duty with interest
under sections 28 and 28AA of the Act, along with
confiscation of the goods under section 111(m) and
imposition of penalties under sections 114A and
114AA of the Customs Act, 1962.
2.4. On adjudication, the Ld. Commissioner of
Customs (Port), Kolkata proceeded to pass the said
impugned order, rejecting the declared values for the
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said goods, confirming the re-determined assessable
values and corresponding duty demands as set out in
the Show Cause Notice, upholding the proposals for
reclassification of speakers, confiscation of the said
goods, and imposition of penalties, while accepting
the declared values in respect of other minor goods
such as glassware, bags, trolleys, toys and keychain
for want of corroborative evidence.
2.5. By the subject impugned Order No.
KOL/CUS/COMMISSIONER/PORT/33/2017 dated
18.09.2017, the Commissioner of Customs (Port)
has confirmed the following demands:
(i) Duty differential demand of Rs.
1,16,50,256 against 87 consignments of
carpets particularised in Annexures A and
E of the Show Cause Notice dated
01.09.2014, with interest thereon under
Sections 28 and 28AA/AB of the Customs
Act, 1962.
(ii) Duty differential demand of Rs.
46,64,532 against consignments of
speakers particularised in Annexures D
and F of the Show Cause Notice dated
01.09.2014 with interest thereon under
Sections 28 and 28AA/AB of the Act;
(iii) Duty differential demand of Rs. 1,66,372
against consignments of blankets
particularised in Annexure G of the Show
Cause Notice dated 01.09.2014 (with
interest thereon under Sections 28 and
28AA/AB of the Act;
(iv) Confiscations of the carpets, speakers
and blankets (henceforth collectively
referred to as the "said goods") under
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Section 111(m) of the Act subject to
redemption against a fine of Rs.
1,00,000/-
(v) Imposition of penalty under Section 112
of the Act of Rs. 1,00,000/- and under
Section 114A of the Act of Rs.
1,76,87,038
Other demands based on Annexure B and C of the
Show Cause Notice dated 01.09.2014 on
miscellaneous items including glassware, were
dropped and the value declared by the appellant
during their importation was accepted by the
Commissioner.
2.6. Aggrieved against the confirmation of the
demands of duty along with interest and penalties
confirmed in the impugned order, the appellant has
filed this appeal.
3. The Ld. Senior Counsel appearing on behalf of
the appellant submits that the said impugned order
is patently erroneous, contrary to the facts and
materials on record, based on assumptions and
presumptions unsupported by materials on record
and/or incorrect conclusion arrived at by
misconstruing records. It is his submission that the
findings arrived at in the said impugned order are
misconceived, arbitrary and violative of the principles
laid down by Courts and Tribunals on the issues
involved including the principles of natural justice;
that the purported demand of duty is even otherwise
barred by limitation.
3.1. It is also submitted by the appellant that the
allegations against them are entirely based on
statements of the then-Director, Suresh Agarwal
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(Ghoriwala), now deceased, purported to be of a
confessional nature; that in the first statement of
Mr. Agarwal (Ghoriwala) dated 08.02.2012, he
claimed to be the Director of the appellant, and the
authorised signatory of a different proprietary
concern namely, M/s Glass Style International; that
he expressly denied any undervaluation in course of
importing glassware. However, it is submitted by the
Ld. Sr. Counsel for the appellant that regarding
"other items" imported by "both the above firms",
the director stated that "there might be chance of
undervaluation the value and the amount of which I
cannot exactly remember; in this statement, there is
no reference to any period, consignment, bills of
entry, invoice, or even a product description of the
goods he thought may have been undervalued.
3.2. He further points out that in the next
statement dated 11.02.2012, the Director had stated
that post importation, items were mixed up and
separate distinction between the stocks of the
appellant and the other concern, M/s. Glass Style
International belonging to another proprietor, Vikas
Agarwal, was not maintained; he claimed to have
undervalued blankets from USD 3.00 per kg to USD
2.25 per kg. Further, he submits that as regards
carpets, the Director stated that "carpets had not
been imported recently though we sell imported
carpets by taking the same from other importers";
thus, save for "blankets", there was no specific
reference to any good to which his purported
confession of undervaluation pertained. It is also
stated that the Director also said that the goods once
imported were mixed together with those of the
other firm, M/s Glass Style International in the
godowns where the imported goods were kept; there
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was no reference to any period during which
undervaluation took place, and there was also no
reference to any bill of entry, or any specific
consignment to which such purported confession of
undervaluation pertained. It is also his submission
that it was also not clear from the statement if he
was referring to goods imported by M/s Glass Style
International that were undervalued or those of the
appellant, be it blankets or otherwise.
3.3. The appellant further submits that during the
course of providing his statement dated 11.02.2012,
the Director was also shown 2 pro forma invoices
showing sale of carpets from a supplier of Indonesia,
which was allegedly recovered from his premises;
on seeing them, the Director stated "I do not know
whether the sale actually took place or not." He said
further, "I am not anywhere related to the said
transaction but I might have kept copies of those
documents as a part of the original unit price of
carpets which might be useful for my export
business"; that the Director clarified that "Those
documents were sent to me for handing over to
some other person like forwarding agent/clearing
agent/indenting agent at Kolkata." The appellant
thus contends that therefore it is evident from this
statement, that the pro forma invoices were not
related in any manner to the imports made by the
appellant and that the Director retained them to
remember the price of the specific type of carpets
described in the invoices; he did not admit to any
undervaluation of the carpets and never claimed that
the pro forma invoice values represented the actual
value of the carpets that the appellant had imported;
there is also no confession of any sort that the type
of carpets described in the pro forma invoices
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matched with those imported by the appellant;
rather, the Director asserted that these invoices
were not related to the imports "in any manner".
3.4. It is further mentioned by the Ld. Sr. Counsel
for the appellant that in the following statement
dated 23.07.2014, the Director stated in Answer to
Question No. 60, that "earlier these carpets were
imported at 2 dollars per square meter FOB, now it is
being imported at 2.20 dollars FOB. We generally
import only one quality of carpet but sizes and
colours differs"; that as regards importation of
speakers, the Director stated in answer to Question
No. 8, that "We generally import 2.0, 2.1, 4.1 & 5.1
Channel Multimedia Speakers but without any brand
name. If the MMS were imported under any brand it
was of suppliers and wo don have any brand as
such."; in answer to Question No. 11, the Director
stated further that "the utility of MMS is to get good
quality sound when attached to other multimedia
devices". Whereas in answer to Question No. 27, the
Director stated that USB/SD/FM Radio are "optional
features" of the speakers imported. Hence, the
appellant stresses that there is absolutely no
confession of any sort to any undervaluation or
misclassification in the said statement dated
23.07.2014, and a clear clarification was provided
that the USB playback feature on the speakers were
"optional" negating thereby any presumption that all
speakers imported necessarily or mandatorily carried
that feature.
3.5. It is also pointed out that the Director
subsequently claimed in his reply dated 15.03.2016
to the Show Cause Notice that the statements were
obtained at the dictates of the authority recording
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the same, and that they had been obtained under
threat and/or coercion. Relying upon the decision of
the Hon'ble Supreme Court in Commissioner of
Customs (Imports), Mum v. Ganpati Overseas
[(2023) 11 Centax 101 (SC)], the appellant contends
that such a statement cannot be used against the
person making the statement.
3.6. In view of the aforesaid submissions, the
appellant submits that regardless of whether the
Director had belatedly disclosed the fact of duress or
coercion in course of the obtainment of the
statements, there is absolutely no consignment-
specific admission or confession to valuation; that
there is also no period-specific confession to
undervaluation and also no undervaluation admitted
in respect of carpets or speakers, both forming the
bulk of the demand. As regards blankets, it is
submitted that there was an overarching, general
statement of undervaluation given by the Director,
but there is no reference to any consignment or
period in relation to which such undervaluation was
purported admitted by the Director. As regards the
pro forma invoices, the appellant's submission is that
the Director himself claimed the same to be
unrelated to the imports, and there was no indication
that the values specified therein had any relevance
to the carpets imported. In the case of the subject
speakers imported by the appellant, it is mentioned
that the dispute is purely based on how they were
classified, the matter being one of pure
interpretation of the tariff chapter heads; there is
also no admission or confession of any deliberate
misclassification by the appellant or the Director
either.
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3.7. It is the further submission of the appellant that
the statements are uncorroborated; that in
particular, the Department seeks to place reliance on
information purportedly obtained from overseas
customs authorities to justify the revaluation of the
carpets and blankets. In this regard, the appellant
contends that the said impugned order and the Show
Cause Notice have purported to rely on a letter dated
June 2012 of the Directorate General of Customs and
Excise, Indonesia, addressed to the First Secretary
(Commerce), High Commission of India in Singapore,
written in response to the letter of the First
Secretary, dated 04.04.2012; the said letter dated
June 2012 provides references to 2 containers
containing "Carpets" bearing Container Nos.
AMFU8872831 and BSIU9152315. It is also their
submission in this regard that there is no reference
to any bill of lading, or the dates of despatch of the
containers, or any invoice reference, but there is a
reference to the receiver, International Enterprises,
Hong Kong; that this letter indicates that the
container was in relation to a shipment from
Indonesia to Hong Kong, and not from Indonesia to
India. They submit that the subject imports in the
present case were made from Indonesia directly to
India and therefore, it is clear that the consignment
to which the container pertained could not have
under any circumstances pertained to the imports in
the present case, and given the absence of any
consignment details provided in the said letter dated
June, 2012, there is no means of determining what
connection if any, the same could have with the said
goods imported by the appellant. Further, the
appellant submits that the purported letter of the
First Secretary, High Commission of India in
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Singapore, dated 04.04.2012 has also not been
disclosed by the respondent authorities, be it with
the Show Cause Notice or during the adjudication
and period thereafter; the said letter dated
June, 2012 also contains no description of the
carpets, and what size or number of carpets, or
variety or characteristic thereof that were being
exported, and from which the unit price thereof could
have been determined; there are no accompanying
shipping documents or any bill of entry, even the
one alleged in paragraph 19.4 of the said impugned
order (i.e. B/E 2833582 dated 23.02.2011), enclosed
with the said letter dated June, 2012 and none have
been incorporated as part of the relied upon
documents. The appellant therefore submits that it is
apparent that the letter dated June 2012 in isolation
offers absolutely no information regarding the
subject imports, and bears no relevance to the
present case, and cannot in any manner serve to
corroborate the statements of the Director or support
any theory or allegation of undervaluation pertaining
to carpets.
3.8. The appellant draws attention to the fact that
there are innumerable varieties of carpets whose
prices widely vary depending on design, commission,
size and other factors, even in respect of the same
category and quality of carpets. In the facts and
circumstances, they contend that there is no basis to
allege undervaluation of the subject consignments of
carpets.
3.9. As regards information purported obtained
from China Customs authorities, it is the appellant's
contention that the same contain all but a tabulation
with import particulars of two entities, being the
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appellant and the said proprietary concern, M/s Glass
Style International (prop. Vikas Agarwal); there is no
authentication of any sort by any customs authority
of China, and there is no covering letter of any
customs authority indicating that such tabulation
forms part of a communication involving the customs
authorities in China; apart from a mere averment on
the part of the respondent authorities, there is
absolutely no indication that such tabulation
represents any real transaction or evidences any
communication with or by the customs authorities in
China; the stated tabulation averred to be containing
details allegedly provided by the customs authorities
in China. Thus, from the above, the appellant
submits that the price available in the said proforma
Invoices should be disregarded altogether and no
relevancy may be accorded to the same to the
present case.
3.10. It is also their contention that it is trite law
that sole uncorroborated statements, confessional or
otherwise, cannot be relied upon for establishing
undervaluation of goods by the relevant assessee,
particularly where the same is vague, inconsistent
and contradictory; they argue that the Commissioner
ought to have appreciated that the statements
sought to be relied upon in the said order, by
themselves, are not sufficient for establishing any
undervaluation of the said goods. Further, referring
to various judgements of Hon'ble Courts, it is
submitted that such statements are relevant and
admissible only when examined by the adjudicating
authority under Section 138B of the Act. In this
connection reliance is placed by the appellant, inter
alia, upon the following decisions:
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(i) Hi Tech Abrasives Ltd. Vs. Commissioner of
C.Ex&Cus [2018 (362) ELT 961
(Chhattisgarh)]
(ii) Basudev Garg Vs. Commissioner of Customs
[2013 (294) ELT 353 (Del)]
(iii) Gobinda Das Vs. Commissioner of
Customs(Prev.) [(2023) 7 Centax 201(T-
Cal)]
3.11. Insofar as the alleged overseas information
purportedly obtained from customs authorities in
China, the appellant submits that they are unsigned
and unattested tabulations without any covering
letter indicating their source or authenticity; that it is
settled law that no presumption can be raised under
Section 139 of the Act in respect of such unsigned
and unauthenticated documents; they are
inadmissible. Based on such documents, it is their
contention that the transaction value of the said
goods cannot be enhanced. The appellant places
reliance in this regard on the following decisions:
(i) Commissioner of Customs Vs. Bussa
Overseas Properties Ltd. [2007 (216) ELT
659 (SC)]
(ii) Commissioner of Customs Vs. TruwoodsPvt.
Ltd. [2016 (331) ELT 15 (SC)]
3.12. With regard to the four computer
printout invoices copies relied upon in the impugned
order, the appellant submits that none of them
satisfy the requirements of Section 138C(2) of the
Act for being treated as a document which is
admissible in any proceedings as per Section
138C(1) of the Act. Thus, they contend in this regard
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that the said printouts are inadmissible evidence and
no demand can be raised or confirmed against the
appellant on the basis thereof. In support of this
contention, the appellant relies on the following
decisions:
(i) Commissioner of Customs Vs. Junaid
Kudia [(2024) 16 Centax 504 (SC)]-
affirming Juniad Kudia Vs. CC [(2024) 16
Centax 503(T)]
(ii) Commissioner of Customs Vs. Jeen
Bhavani International, (2023) 6 Centax
14 (SC)- affirming Jeen Bhavani
International Vs. Commissioner of
Customs [(2023) 6 Centax 11(T)]
3.13. It is the appellant's further submission
that the respondent authorities have also sought to
rely on a Bill of Entry No. 5951708 dated February 8,
2012 drawn by another importer, one M/s S. Krishna
& Co., whereby carpets were imported from M/s Pt
Universal Carpet & Rugs, Indonesia, being the same
supplier from whom they had imported their carpets;
however, no copy of such Bill of Entry is included in
the relied upon documents accompanying the Show
Cause Notice; that in the said Bill of Entry, M/s
S. Krishna & Co, being a completely unrelated party,
had allegedly imported the said carpets at the rate of
USD 2.00 per sq.m. It has been alleged in the said
impugned order and the Show Cause Notice
however, that though M/s S. Krishna & Co. had
declared the valuation of the said carpets to the
Indian Customs Authorities at $2.00 per sq.m, its
actual value, as purportedly obtained from the
Indonesian Customs Authorities was $3.3 per sq.m.
Such notice of undervaluation was purportedly
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provided to the concerned authorities by the Acting
Director, DGCE, Ministry of Finance, Indonesia by his
letter dated April 30, 2013. However, the appellant
has submitted that no copy of such letter dated
30.4.2013 has been disclosed with the Show Cause
Notice and the said impugned order acknowledges its
absence in para 19.4 of the impugned order. Thus,
the appellant stressed that said letter cannot be
relied upon as evidence to reject the transaction
value declared by them.
3.14. Likewise, the appellant also contends
that the details and particulars of carpets purportedly
imported by M/s S. Krishna under Bills of Entry No.
2986679 dated March 17, 2011, and No. 3725162
dated June 7, 2011 at the alleged unit price of 3.4
per sq.m, has not been provided in the Show Cause
Notice or at any stage during or post-adjudication;
none of the copies of the said Bills of Entry dated
17.3.2011 and 7.6.2011 have been disclosed either.
3.15. Accordingly, it is the appellant's submission
that the documents referenced in the impugned
order, cannot be accorded any evidentiary value
whatsoever for purposes of rejecting the transaction
value and re-determining the assessable value for
the purpose of charging customs duty.
3.16. As regards the importation of blankets, the
appellant puts forth the contention that apart from a
general statements by the Director regarding their
undervaluation, which was not specific to any
consignment or bill of entry or any exporting or
importing party for that matter, there was no
corroborative evidence of any sort put forward by
the respondents in this regard; that the appellant by
its reply to the Show Cause Notice, submitted a copy
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of a Bill of Entry No. 7256218 dated 03.11.2014
against which it had during the course of
adjudication imported blankets with a declared unit
value of USD 2.2 per kg, but this contemporaneous
evidence has been rejected by the adjudicating
authority on the purported basis that the same is not
contemporaneous even though the Show Cause
Notice dated 01.09.2014 had only been issued only 2
months prior to the presentation of such Bill of Entry
dated 03.11.2014. It is their plea that the said
impugned order has proceeded solely on the basis of
the statement of the Director dated 11.02.2012 and
not produced any evidence of contemporaneous
imports with higher value.
3.17. Inasmuch as the imported speakers are
concerned, it is reiterated by the appellant that there
was no case for undervaluation, but misclassification,
and hence, the dispute was purely of an
interpretational nature; there was no confession of
any sort by any witness against the appellant, be it
of the Director or otherwise, that would indicate any
misclassification, or any intent to evade payment of
duty on the same.
3.18. Moreover, the appellant argues that it is
a settled principle of law that the burden of proof
that there has been undervaluation lies on the
Department and not on the importer; in this respect
it is obligatory on the part of the Customs authorities
to disclose contemporaneous evidence to establish
that there has been undervaluation of each of the
category of subject goods imported by the appellant
during the said period; that there has been no such
discharge of onus cast upon the Customs authorities
in the instant case and not a single piece of material
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has been disclosed which evidences that at or about
the same time when the respective goods were
imported by the appellant, goods of similar
description, quantity and volume had been imported
through any port of the country at a price more than
that declared by the appellant. It is submitted that in
such cases the purported conclusion of
undervaluation sought to be drawn in the show
cause notice and the misconceived demands of short
paid/short levied duty made therein are not based on
legal principles settled by, inter alia, the Apex Court
and, hence, untenable and unsustainable. In this
respect reliance is placed upon, inter alia, the
following decisions:
(i) Commissioner of Customs Vs. J.D. Orgochem
Ltd. [2008 (226) ELT 9 (SC)]
(ii) CCE & ST, Noida v. Sanjivani Non-Ferrous
Trading Pvt. Ltd. [2019 (365) ELT 3 (SC)]
(iii) Commissioner of Customs, Calcutta Vs.
South India Television (P) Ltd. [2007 (214)
ELT 3 (SC)]
(iv) Commissioner of Customs (Imports), Mum v.
Ganpati Overseas [(2023) 11 Centax 101
(SC)]
3.19. Regarding classification of Multi Media
Speakers, the appellant submits that the issue is no
longer res integra, as this Tribunal has decided the
classification of the said speakers under Chapter
Head 8518 and hence, contend that the demand
confirmed in the impugned order on account of
reclassification of the goods under the CTH
85279100, is not sustainable.
3.20. The appellant contends that they have not
suppressed any information from the Department; as
there is no misdeclaration or undervaluation of the
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imported goods is established, it is submitted that
there is no basis for invocation of Sections 14, 28,
28AA/AB or for confiscating goods under Section
111(m) of the Act or for imposing redemption fine
and penalty under Sections 125, 112, and 114A of
the Act.
3.21. In view of the above submissions, the
Ld. Sr. Counsel for the appellant has prayed for
setting aside the impugned order and allowing their
appeal.
4. The Ld. Authorized Representative (A.R.) of
the Revenue reiterated the findings in the impugned
order. Regarding rejection of the transaction value,
the Ld. A.R. of the Revenue submits that
investigation conducted by the officers has
established that the appellant undervalued the
carpets imported by them; that the undervaluation is
supported by the Proforma Invoices showing higher
value for the same goods retrieved from the
appellant. Accordingly, he supported the demands
confirmed in the impugned order.
5. Heard both sides and perused the appeal records.
6. We observe that the appellant has imported
multiple consignments of carpets, speakers, and
blankets from overseas suppliers in Indonesia and
Hong Kong, China. All the subject consignments,
except the one consignment of speakers imported
against Bill of Entry 6987461 dated 1.6.2012
intercepted by the DRI, were cleared following
assessment and inspection by the customs
authorities, without any objection being raised at the
time in respect of the declarations made by the
appellant as to description, classification, quantity or
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value. The investigation conducted by DRI resulted
in issue of the Notice demanding differential customs
duties on account of undervaluation and
misclassification, which ultimately resulted in
confirmation of the said duties in the impugned
order.
6.1. Regarding the differential demand of Rs.
1,16,50,256/- confirmed in respect of 87
consignments of carpets, we observe that the ld.
adjudicating authority, in the impugned order, has
relied upon the statements from the Director. The
allegation of the Revenue is that two proforma
Invoices showing higher value of carpets have been
recovered from the house of the Director. For ready
reference, the copies of the said proforma Invoices
are extracted below:
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6.2. From the Pro Forma Purchase Invoices
extracted above, we find that the said Proforma
Invoices were issued by M/s Pt Universal Carpet &
Rugs, Indonesia to M/s International Enterprise,
Hong Kong. In the pro forma invoice bearing no. 262
R1/UCR/PI/XII/2010 dated December 21, 2010
issued by M/s Pt Universal Carpet & Rugs, 'Florence'
carpets are shown priced at $3.45 per sq.m,
However, in the said pro forma invoice bearing no.
268/UCR/PI/XII/2010 dated December 21, 2012,
'Concord' carpets were valued at $5.65 per sq.m.,
which is much less than the per unit value [lesser by
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$2.20 per sq.m] of the said Florence carpets sold by
M/s Pt Universal Carpet & Rugs. In other words, it is
evident that the carpets of different kinds were being
sold by M/s Pt Universal Carpet & Rugs at vastly
different rates. Moreover, presuming that the
transactions particularised in the said pro forma
invoices did in fact take place, it does not necessarily
follow that the type of carpets sold thereunder were
identical or similar to the ones imported by the
appellant during the said period. Further, we observe
that the proforma invoice was related to a
transaction of carpets between the seller from
Indonesia and buyer from Hong Kong. It cannot be
said that the value at which goods are traded
between Hong Kong and Indonesia will be identical
or entirely consistent with the value at which goods
are traded between India and Indonesia. It is also
pertinent to note that the quantity of goods traded
during the course of a transaction is also a
determining factor of their price/value. In the instant
case, we find that no proper comparisons can be
drawn with the goods described in the said pro forma
invoices and the carpets imported by the appellant.
Thus, we are of the view that the value available in
the proforma Invoice cannot be relied upon for
purposes of rejecting the transaction value declared
by the appellant and to re-determine the assessable
value of the carpets for the purpose of charging
customs duty.
6.2.1. In this regard, we find it relevant to refer to
the decision rendered by the Tribunal at Chennai in
the case of Oswal Metal Works v. Commissioner of
Customs, Chennai-III [2024 (10) TMI 408 - CESTAT,
Chennai] wherein it has been observed that a
proforma invoice is in the nature of a quotation or
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offer and hence does not constitute valid basis for
enhancement of value of imported goods. The
relevant observations of the Tribunal in the aforesaid
decision are reproduced below: -
"7. We find that it has been held by a Division
Bench of this Tribunal in Commissioner of
Customs, Chennai Vs Sahara Enterprises [2006
(206) E.L.T. 548 (Tri.-Chennai)] that a
proforma invoice is in the nature of a quotation
or offer and hence does not constitute valid
basis for enhancement of value of the imported
goods. It held as under;
"3. After careful consideration of the
submissions, we find that, admittedly, value
of the goods was enhanced by the original
authority on the basis of proforma invoice
issued in December 2001 by the supplier of
the goods, to another party. The subject
import was made in July 2002. There is a
gap of more than six months between the
two. Even otherwise, as rightly noted by the
Commissioner (Appeals), a proforma invoice
is in the nature of a quotation or offer and
hence does not constitute valid basis for
enhancement of value of the imported
goods. This finding of the lower appellate
authority is squarely supported by the
Tribunal's decision in the case of Mahavir
Spinning Mills Ltd. reported in 1996 (84) ELT
A147 and the Hon'ble Supreme Court's
judgment in Civil appeal No. 5263/92 in the
case of M/s Sai Impex (S.C.). In the
circumstances, we do not think that it is
necessary to look into the issue whether it
was open to the lower appellate authority to
admit additional evidence. Valuation done by
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the original authority on the basis of
quotation was not on any legally sustainable
basis. Learned Commissioner (Appeals) has
set things right. The impugned order does
not call for interference. The appeal stands
dismissed."
(emphasis added)
6.3. We also find that the investigation cited the
evidence of the value available in the proforma
invoice to reject the value declared by the appellant,
but has not applied the value of either USD 3.45 per
sq.m. or USD 5.65 per sq.m. derived from the said
pro forma invoices to re-determine the assessable
value of the carpets. An arbitrary rate of USD 3 per
Sq Mtr has been taken to quantify the demand.
Thus, we observe that the proforma invoices
recovered by the investigation has no relevance to
the facts and circumstances of the instant case for
rejecting the transaction value declared by the
appellant and to re-determine the assessable value
of the carpets.
6.4. As regards information obtained from China
Customs authorities, it is observed that the same
contains tabulation with import particulars of two
entities, being the appellant and the said proprietary
concern, M/s Glass Style International (prop. Vikas
Agarwal). There is no authentication of any sort by
any customs authority of China, and there is no
covering letter of any customs authority indicating
that such tabulation forms part of a communication
involving the customs authorities in China. Apart
from a mere averment on the part of the respondent
authorities, there is absolutely no indication that
such tabulation represents any real transaction or
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evidences any communication with or by the
customs authorities in China. Thus, we are of the
view that that the price available in the said
Tabulation Sheet should be disregarded altogether
and no relevancy can be accorded to the same in the
present case.
6.5. The other evidence relied upon by the
investigation to allege undervaluation is the various
statements recorded from its Director. We find that
the investigation alleges that the Director in his
statements accepted the undervaluation of the
carpets imported by them. We have perused the
various statements recorded from the Director. From
the answers given by the Director, we find that he
has not given any confessional statement agreeing
undervaluation. For ready reference the answers
given by the Director to the questions relevant to the
issue are analysed below.
6.6. The Director was shown 2 pro forma invoices
showing sale of carpets from a supplier of Indonesia
to allegedly recovered from his premises. On seeing
them, the Director stated "I do not know whether the
sale actually took place or not." He said further, "I
am not anywhere related to the said transaction but
I might have kept copies of those documents as a
part of the original unit price of carpets which might
be useful for my export business". The Director
clarified that "Those documents were sent to me for
handing over to some other person like forwarding
agent/clearing agent/indenting agent at Kolkata." In
the statement dated 23.07.2014, the Director stated
in Answer to Question No. 60, that "earlier these
carpets were imported at 2 dollars per square meter
FOB, now it is being imported at 2.20 dollars FOB". It
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is therefore evident from this statement, that the pro
forma invoices were not related in any manner to the
imports made by the appellant. The Director's
submission is that he has retained them to
remember the price of the specific type of carpets
described in the invoices. He did not admit to any
undervaluation of the carpets and never claimed that
the pro forma invoice values represented the actual
value of the carpets that the appellant had imported.
There is also no confession of any sort that the type
of carpets described in the pro forma invoices
matched with those imported by the appellant.
Rather, the Director asserted that these invoices
were not related to the imports "in any manner".
6.7. In this regard, we also take note of the fact
that the investigation has not brought in any
evidence to corroborate the allegation other than the
statements. We agree with the submission of the
appellant that uncorroborated statements,
confessional or otherwise, cannot be relied upon for
establishing undervaluation of goods by the
importer, particularly where the same is vague,
inconsistent and contradictory. The Commissioner
ought to have appreciated that the statements
sought to be relied upon in the said order, by
themselves, are not sufficient for establishing any
undervaluation of the said goods.
6.8. Further, as held by the Hon'ble Courts, such
statements are relevant and admissible only when
examined by the adjudicating authority under
Section 138B of the Act, which has not been done in
this case. In this connection, we place our reliance
upon the decision in the case of Hi Tech Abrasives
Ltd. Vs. Commissioner of C.Ex & Cus [2018 (362)
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Appeal Nos.: C/77102 & 77103/2017-DB
ELT 961 (Chhattisgarh), wherein it has been
observed as under:-
"9. Findings on Substantial Questions of Law (i) &
(ii) :
We shall decide the first two substantial questions
of law as they are overlapping. The submission of
counsel for the appellant has been that firstly, the
Director's statement was not admissible and
secondly it cannot be treated as admission because
in reply to Show Cause Notice, the said statement
was stated to have been obtained under duress.
We shall first examine the legal position with
regard to the admissibility of the statement of
Director which admittedly was taken during search
operations by the investigation officers.
9.1 At the outset, it needs to be clarified that
during the course of argument, Learned Counsel for
the parties agreed that second substantial question
of law is with regard to legality of procedure
adopted by the adjudicating authority and not the
Tribunal as such because the Tribunal has only
exercised appellate jurisdiction. This is quite
obvious from orders passed by the Tribunal, the
appellate authority and pleadings/ground in the
appeal. There is no dispute that the adjudicating
authority did not record the statement of the
Director Mr. Narayan Prasad Tekriwal and the basis
of the finding recorded by the adjudicating
authority as well as Customs, Excise and Service
Tax Appellate Tribunal, has been the statement of
the Director as recorded by the investigation officer
during investigation. Section 9D of the Central
Excise Act of 1944 reads as under :
Section 9D - Relevancy of statements under certain
circumstances. -- (1) A statement made and
signed by a person before any Central Excise
Officer of a gazetted rank during the course of any
inquiry or proceeding under this Act shall be
relevant, for the purpose of proving, in any
prosecution for an offence under this Act, the truth
of the facts which it contains, -
(a) When the person who made the statement is
dead or cannot be found, or is incapable of giving
evidence, or is kept out of the way by amount of
delay or expense which, under the circumstances
of the case, the Court considers unreasonable; or
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(b) when the person who made the statement is
examined as a witness in the case before the Court
and the Court is of the opinion that having regard
to the circumstances of the case, the statement
should be admitted in evidence in the interest of
justice.
(2) The provisions of sub-section (1) shall, so far
as may be, apply in relation to any proceeding
under this Act, other than a proceeding before a
Court, as they apply in relation to a proceeding
before the Court.
On scanning the anatomy of the said provision, we
find that the statement made and signed by a
person before any Central Excise Officer of a
gazetted rank during the course of inquiry or
proceeding under the Act shall be relevant for the
purposes of proving truth of the facts which it
contains only when it fulfills the conditions
prescribed in clause (a) or as the case may be,
under clause (b). While clause (a) deals with
certain contingencies enumerated therein, clause
(b) provides that statement made and signed
would be relevant for the purposes of proving the
truth of the facts contained in that statement only
when the person whom made the statement is
examined as witness before the Court. (her, the
adjudicating authority).
9.2 At this juncture, we need to notice the
provision contained in Section 9D which provides
that sub-section (1) shall, as far as may be, applied
in relation to the proceedings under the Act, other
than the proceeding before the court, as they apply
in relation to proceeding before the Court. This
provision when read in juxtaposition, the small
clauses (a) and (b) under sub-section (1),
requirement of law of recording of examination as
witness would be in relation to the proceedings
before the adjudicating authority.
9.3 A conjoint reading of the provisions therefore
reveals that a statement made and signed by a
person before the Investigation Officer during the
course of any inquiry or proceedings under the Act
shall be relevant for the purposes of proving the
truth of the facts which it contains in case other
than those covered in clause (a), only when the
person who made the statement is examined as
witness in the case before the court (in the present
case, Adjudicating Authority) and the court
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(Adjudicating Authority) forms an opinion that
having regard to the circumstances of the case, the
statement should be admitted in the evidence, in
the interest of justice.
9.4 The legislative scheme, therefore, is to ensure
that the statement of any person which has been
recorded during search and seizure operations
would become relevant only when such person is
examined by the adjudicating authority followed by
the opinion of the adjudicating authority then the
statement should be admitted. The said provision
in the statute book seems to have been made to
serve the statutory purpose of ensuring that the
assessee are not subjected to demand, penalty
interest on the basis of certain admissions recorded
during investigation which may have been obtained
under the police power of the Investigating
authorities by coercion or undue influence.
9.5 Undoubtedly, the proceedings are quasi
criminal in nature because it results in imposition of
not only of duty but also of penalty and in many
cases, it may also lead to prosecution. The
provisions contained in Section 9D, therefore, has
to be construed strictly and held as mandatory and
not mere directory. Therefore, unless the
substantive provisions contained in Section 9D are
complied with, the statement recorded during
search and seizure operation by the Investigation
Officers cannot be treated to be relevant piece of
evidence on which a finding could be based by the
adjudicating authority. A rational, logical and fair
interpretation of procedure clearly spells out that
before the statement is treated relevant and
admissible under the law, the person is not only
required to be present in the proceedings before
the adjudicating authority but the adjudicating
authority is obliged under the law to examine him
and form an opinion that having regard to the
circumstances of the case, the statement should be
admitted in evidence in the interest of justice.
Therefore, we would say that even mere recording
of statement is not enough but it has to be fully
conscious application of mind by the adjudicating
authority that the statement is required to be
admitted in the interest of justice. The rigor of this
provision, therefore, could not be done away with
by the adjudicating authority, if at all, it was
inclined to take into consideration the statement
recorded earlier during investigation by the
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Investigation officers. Indeed, without examination
of the person as required under Section 9D and
opinion formed as mandated under the law, the
statement recorded by the Investigation Officer
would not constitute the relevant and admissible
evidence/material at all and has to be ignored. We
have no hesitation to hold that the adjudicating
officer as well as Customs, Excise and Service Tax
Appellate Tribunal committed illegality in placing
reliance upon the statement of Director Narayan
Prasad Tekriwal which was recorded during
investigation when his examination before the
adjudicating authority in the proceedings instituted
upon show cause notice was not recorded nor
formation of an opinion that it requires to be
admitted in the interest of justice. In taking this
view, we find support from the decision in the case
of Ambica International v. UOI rendered by the
High Court of Punjab and Haryana.
Reliance has been placed by the Counsel for the
Revenue on the decision in the matter of
Commissioner of Central Excise v. Kalvert Foods
India Private Limited (Laws (SC) 2011 838) = 2011
(270) E.L.T. 643 (S.C.). That decision turned on its
own facts. In para 19 of the judgment, it was
concluded as below :
"19. We are of the considered opinion that it is
established from the record that the aforesaid
statements were given by the concerned persons
out of their own volition and there is no allegation
of threat, force, coercion, duress or pressure being
utilized by the officers to extract the statements
which corroborated each other. Besides the
Managing director of the Company of his own
volition deposition the amount of Rs. 11 lakhs
towards excise duty and therefore in the facts and
circumstances of the present case, the aforesaid
statement of the Counsel for the Respondents
cannot be accepted. This fact clearly proves the
conclusion that the statements of the concerned
persons were of their volition and not outcome of
any duress."
Accordingly, on the first and second question of
law, we hold that the statement of the Director
could not be treated as relevant piece of evidence
nor could be relied upon without compliance of
Section 9D of the Act. The two questions of law
accordingly, stand answered in that manner."
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6.9. The same view has been expressed by this
Tribunal in the case of Gobinda Das Vs.
Commissioner of Customs (Prev.), (2023)7 Centax
201(T-Cal).
6.10. Thus, by relying on the decisions cited supra,
we hold that the statements relied upon in this case
cannot be relied upon to reject the transaction value
declared by the appellant and to re-determine the
assessable value of the carpets.
6.11. We also observe that the Ld. adjudicating
authority has relied upon some Bills of Entry of
similar imports made by other importers. However,
we find that the authorities have not provided any of
the copies of the said Bills of Entry dated 17.3.2011
and 7.6.2011. No evidence has also been brought on
record by the respondent-authorities to substantiate
that the goods imported vide the said bills of entry
are comparable goods or not. In the absence of the
copies of the said bills of entry, it is not possible to
ascertain whether the goods imported therein are
comparable or not. A similar view has been taken by
this Tribunal in the case of Sunny Sales & ors. v.
Commissioner of Customs (Port), Kolkata [2024 (10)
TMI 514 - CESTAT, Kolkata] wherein it has been
held that:
"6.5. We observe that in the impugned order the
transaction value declared by the appellant was
rejected on the basis of some contemporaneous
imports. In our view, the rejection of transaction
value can be done only on the basis of cogent and
comparable material and when there is no case of
contemporaneous bill of entry or contemporaneous
import available on record, the transaction value
cannot be rejected on the basis of materials which
are not admissible into evidence. For rejection of
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transaction value, contemporaneous import of
identical and/or similar import is essential. This
view has been crystallized by the Hon'ble Supreme
Court in the case of Commissioner of Customs,
Calcutta Vs- South India Television Pvt. Ltd.
reported in 214 ELT page 3 SC. The relevant part
of the said decision is reproduced below: "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 contrary, the
respondent importer has relied upon
contemporaneous imports from the same supplier,
namely, M/s. Pearl Industrial Company, Hong
Kong, which indicates comparable prices of like
goods during the same period of importation. This
evidence has not been rebutted by the
Department. Further, in the present case, the
Department has relied upon export declaration
made by the foreign supplier in Hong Kong. In this
connection, we find that letters were addressed by
the Department to the Indian Commission which, in
turn, requested detailed investigations to be carried
out by Hong Kong Customs Department. The
Indian Commission has forwarded the export
declarations in original to the Customs Department
in India. One such letter is dated 19-9-1996. In the
present case, the importer has alleged that the
original declarations were with the Department.
That certain portions of the originals were not
shown to the importer despite the importer calling
upon the adjudicating authority to do so. Further,
by way of Interlocutory Application No. 4 in the
present civil appeal, an application was moved by
the importer calling upon the Department to
produce the original declaration in the Court. No
reply has been filed to the said I.A. till date. In the
circumstances, we are of the view that the
Department had erred in rejecting the invoice
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submitted by the importer herein as incorrect.
Further, the Department received from the Hong
Kong supplier a Fax message dated 22-7-1996.
That was produced before the Commissioner. In
that message, he had explained that the
manufacturer of the impugned goods was getting
export rebates and, therefore, it is possible that the
manufacturer had over-invoiced the price in order
to claim more rebate. The goods were of Chinese
origin. In the Fax message it is further stated by
the foreign supplier that he was required to show
the export value on the higher side in order to
claim the incentives given by his Government. This
explanation of the foreign supplier, in the present
case, had been accepted by the Commissioner. In
his order, the Commissioner has not ruled out
over-invoicing of the export value by the foreign
supplier in order to obtain incentives from his
Government. For the aforestated reasons, we find
no infirmity in the impugned judgment of the
Tribunal." 6.6. From the impugned order, we
observe that not a single bill of entry of identical
imports at higher value has been cited. On the
contrary, we observe that the appellant has cited
several imports mentioned in the chart at page 231
Volume II and enclosed invoices and bill of entry
from pages 232 to 476 which are identical and of
near same value. However, no findings have been
given by the ld. adjudicating authority on these
averments made by the appellant. In the Show
Cause Notice, we observe that the appellant has
submitted some evidence of identical imports at
lower value, which has been admitted in paragraph
14.3 and paragraph 14.4 of the notice. The
relevant paragraph 14.3 of the Show Cause Notice
is set out hereinbelow; " ...The import value data
base of the contemporaneous period, therefore
contains in abundance data of import of
comparable goods at such misdeclared low value ,
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which themselves have either been already
subjected to or may be subjected to the scanner
under the ongoing process of investigation relating
to import made by other importers"
6.7. Thus, we observe that the ld. adjudicating
authority has not taken into account the evidences
submitted by the appellant on contemporaneous
imports with lower value. Also, he has not
furnished the details of the Bills of Entry where
higher value has been adopted.
6.8. We observe that the ld. adjudicating authority
has also not followed the valuation rules in a
systemic mannerto redetermine the Assessable
value, by stating that it will be in conflict with the
intelligence about the rampant under-invoicing as
alleged in paragraph 14.4 of the notice. In the
impugned order, it has been admitted that none of
the Rules from Valuation Rule 4 to Rule 8 are
applicable and valuation has been done under Rule
9 of the valuation rules. We observe that in the
impugned order, valuation was disputed in the
manner and the procedure adopted to re-determine
the value is unknown to law. We observe that the
machine with only head were compared with
certain imports where head was not imported, but
some other parts were imported, and by
application of Rule 9, the prices were sought to be
adjusted even when there is no comparability of
the goods in part , model, valuation, etc. Thus, we
hold that the transaction value in this case could
not have been rejected under Rule 12 of the
Valuation Rules."
6.11.1. Accordingly, we hold that the evidence
of contemporaneous imports brought in by the
investigation cannot be relied upon to reject the
value declared by the appellant. Thus, we hold that
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the documents referenced in the impugned order,
cannot be accorded any evidentiary value
whatsoever for purposes of rejecting the transaction
value and re-determining the assessable value for
the purpose of charging customs duty.
6.12. In view of the above findings, we reject the
value re-determined by the adjudicating authority
and hold that the transaction value declared by the
appellant should be accepted. Accordingly, we hold
that the demand of differential customs duty of
Rs.1,16,50,256/- confirmed in the impugned order in
respect of 87 consignments of carpets is not
sustainable and hence, we set aside the same.
7. Regarding the differential customs duty
demand of Rs.46,64,532/- in respect of Multi Media
speakers, we observe that the differential duty has
been confirmed mainly on the allegation of
misclassifying them to suppress CVD liability on the
retail sale price basis. In this regard, it is seen that
the issue of classification of Multi Media Speakers is
no longer res integra, as this Tribunal has decided
the classification of the said speakers under Chapter
Head 8518 in a catena of decisions. In support of
this view, we refer to the decision of this Tribunal in
the case of M/s. Jupiter Green Energy Pvt. Ltd. v.
Commissioner of Customs (Port), Kolkata [Final
Order No. 76550 of 2025 dated 11.06.2025 in
Customs Appeal No. 76843 of 2018 - CESTAT,
Kolkata], wherein in it has been held as under: -
"11. With regard to the first issue, we find that an
identical issue had come up before this Tribunal in
the appellant's own cases. In M/s. Jupiter
International Limited vs Commissioner of Customs
(Port), Kolkata [2025 (2) TMI 430 - CESTAT
Page 35 of 40
Appeal Nos.: C/77102 & 77103/2017-DB
Kolkata], under similar facts and circumstances, it
has been observed as under: -
"The appellant, Jupiter International Ltd
imported a consignment of Two models of
Multimedia Speakers having additional
function such as Blue
tooth/SD/MMC/USB/FM/AUX with remote
wireless Microphone and some electronic
spare parts of speakers. They have filed a
Bill of Entry No. 7866965 dated 01.09.2018
self assessing the Multimedia Speakers
under heading no.85182200. They imported
another consignment of various models of
Multimedia Speakers comprising of three
categories of speakers i.e. (i) Multimedia
Speakers with additional function of
Bluetooth and FM radio, (ii) Multimedia
Speakers with additional function of USB and
(ii) samples of Multimedia Speakers without
any additional function.....
...
8. We find that this issue was before the Banglore Tribunal in the case of Logic India Trading Co-v-C.C-2016(337) ELT 65(Tri- Bang). The Tribunal has held as under:
...
9. We find that the same issue was dealt by this Bench in the case of B.C. (Port), Kolkata
-v- M/s Santosh Radio Products (order no. F/O 76070/2018 dated 04.05.2018- (Tribunal-Kol)], wherein it has been held as under:
...
10. After going through the factual matrix, we find that the case laws cited above are squarely applicable. Hence, applying the cited case laws, we set aside the impugned order and allow the appeal."
11.1. Further, in the appellant's own case in M/s. Jupiter International Limited vs Commissioner of Customs (Port), Kolkata vide Final Order Nos. 75404-75405 of 2025 dated 05.02.2025 in Page 36 of 40 Appeal Nos.: C/77102 & 77103/2017-DB Customs Appeal Nos. 75580 & 75581 of 2020 (CESTAT, Kolkata), this Tribunal has held as under:
-
"1. The appellant has imported Multimedia Speakers/Computer Speakers on 11.01.2018 classifying the said goods under CTH 85182200. The department proposed classification of the product under CTH 8519/8527 attracting CVD on retail sale price basis. The Adjudicating authority vide O-I-O dated 13.02.2018 determined the classification of the imported goods under 85279100. Being aggrieved the appellant filed their appeal before Commissioner (Appeals), which come to be dismissed. Hence, the appellant is before the Tribunal.
2. We find that the aforesaid, question of classification of the said products has been examined in extenso and the rival entries discussed threadbare. The subject issue is no more res integra. There are a catena of decisions holding the classification of the impugned goods under heading under CTH- 8518. In the case of Logic India Trading Company US Commissioner of Customs, Cochin (2016(337)ELT 65(Tr-Bang.), as maintained by the Hon'ble Apex Court, reported in 2016(342)ELT A-34(SC), while dealing with similar set of facts, the courts have held the classification of the said goods under CTH 8518. Relevant paras of the said decision are referred to hereunder below:
....
6. The detailed analysis of the classification of all such Audio-Visual Receivers was also undertaken independently by this Tribunal in the case of ONKYO SIGHT & SOUND INDIA PVT.LTD. vs Commissioner of Customs, Chennai (2019(368) ELT 683(Tri- Chen.), wherein too the Southern Regional Bench of the Tribunal did not agree with the department's stance for classification of the said products under CTH 8527 and had retained the CTH 8518 claiming the goods as Audio Frequency Amplifier along with Home Page 37 of 40 Appeal Nos.: C/77102 & 77103/2017-DB Theatre Systems as multiple loudspeakers mounted in the same enclosure.
7. In view of said matter having been examined ad nauseam as referred supra, we find no merit in the order of the lower authority which is therefore set aside.
8. The appeal filed by the appellant is hereby allowed with consequential relief, if any, as per law."
11.2. Thus, we find that the issue is no longer res integra as the same has already been dealt with by this Tribunal in the above cited cases. Therefore, following the above judicial precedents, we hold that the appellant has rightly classified the multimedia speakers with added ancillary features of USB/SD card/ MMC Playback and/ or FM radio under CTH 8518. Accordingly, the demands confirmed against the appellant by reclassifying the said goods under CTH 8527/CTH 8519 are not sustainable and therefore, we set aside the same."
7.1. By following the ratio of the decision cited above, we hold that the appellant has rightly classified the Multi Media Speakers imported by them under Chapter Head 8518, where MRP based price is not applicable. Thus, we hold that the demand confirmed in the impugned order on account of reclassification of the goods under the CTH 85279100, is not sustainable and hence, we set aside the same.
8. Regarding the differential duty demand of Rs.1,66,372/- confirmed in respect of the consignments of blankets, it is observed that apart from a general statement by the Director regarding their undervaluation, which was not specific to any consignment or bill of entry or any exporting or Page 38 of 40 Appeal Nos.: C/77102 & 77103/2017-DB importing party for that matter, there is no corroborative evidence of any sort put forward by the respondents. The appellant by its reply to the Show Cause Notice, submitted a copy of a Bill of Entry No. 7256218 dated 03.11.2014 submitted value of contemporaneous goods of imported blankets with a declared unit value of USD 2.2 per kg. This contemporaneous evidence has been rejected by the adjudicating authority on the purported basis that the same is not contemporaneous even though the Show Cause Notice dated 01.09.2014 had only been issued only 2 months prior to the presentation of such Bill of Entry dated 03.11.2014. We observe that the said impugned order has proceeded solely on the basis of the statement of the Director dated 11.02.2012 and not produced any evidence of contemporaneous imports with higher value. Considering the above, we hold that the declared value of the blankets by the appellant in the bills of entry cannot be rejected. Accordingly, we hold the demand confirmed in the impugned order on the blankets imported by the appellant is not sustainable and hence we set aside the same.
9. Regarding confiscation of the goods in question and imposition of redemption fine, as we have already observed that the allegations of undervaluation and mis-classification cannot be sustained, we hold that the goods are not liable for confiscation. Hence, we set aside the order confiscation of goods and imposition of redemption fine in lieu of confiscation imposed in the impugned order.
Page 39 of 40Appeal Nos.: C/77102 & 77103/2017-DB
10. We have also examined the contentions raised by the appellant as to there being no basis for invocation of the extended period or imposition of penalties in this case on the ground that no information has been suppressed from the Department and no misdeclaration or undervaluation of the imported goods has been established.
10.1. In this regard, it is observed that the appellant has not acted in contravention of the provisions of the Act during the said period, as aforesaid, and hence there can be no basis to the allegation of fraud or wilful misstatement on their part with intent to evade payment of duty. Under such circumstances, we are of the considered view that the extended period of limitation cannot be invoked in terms of Section 28 of the Act, as the conditions precedent for such invocation have not been satisfied in the present case.
10.1.1. The ingredients for imposing penalties under Section 112 or Section 114A of the Customs Act being identical to those required for invoking the extended period, and the same not being satisfied in the instant case, in view of our above discussions, we hold that no penalty is imposable on the appellant under Section 112 or Section 114A ibid. Accordingly, the same are set aside.
11. Customs Appeal No. 77103 of 2017 has been filed by Shri Suresh Agarwal against the penalty of Rs.10,00,000/- (Rupees Ten Lakh only) imposed on him under Section 114AA of the Customs Act, 1962. In this regard, it is seen from the records that Shri Suresh Agarwal has expired, as evidenced by the Death Certificate issued on 05.03.2019 which has been produced by the Ld. Counsel for the appellant.
Page 40 of 40Appeal Nos.: C/77102 & 77103/2017-DB As Shri Suresh Agarwal has already expired, the demand against him in the impugned order does not survive. Accordingly, the appeal filed by him stands abated.
12. In view of the above discussions, we set aside the impugned order and allow the Customs Appeal No. 77102 of 2017, filed by the appellant-company, with consequential relief, if any, as per law. Customs Appeal No. 77103 of 2017 filed by Shri Suresh Agarwal, stands abated and hence the demand against him does not survive.
13. The appeals filed by the appellants are disposed on the above terms.
(Order Pronounced in Open court on 18.08.2025) (R. MURALIDHAR) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) rkp