Custom, Excise & Service Tax Tribunal
Sumridhi Aluminium P Ltd vs Patparganj on 13 September, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
Customs Appeal No. 52491 of 2019
[Arising out of Order-in-Appeal No. CC(A)/CUS/D-II/ICD/PPG/PALWAL/2699-
2737/2018 dated 16/11/2018 passed by the Commissioner of Customs
(Appeals), New Delhi.]
M/s Sumridhi Aluminium (P) Ltd., ...Appellant
Devoli Mandkol near Balaji Dharam Kanta,
Vill Bhagola, Palwal
Haryana-121102
Versus
The Commissioner of Customs ...Respondent
ICD Parparganj, Gazipur, Delhi - 110096.
WITH C/52492/2019 C/52493/2019 C/52494/2019 C/52495/2019 C/52496/2019 C/52497/2019 C/52498/2019 C/52499/2019 C/52500/2019 C/52501/2019 C/52502/2019 C/52503/2019 C/52504/2019 C/52505/2019 C/52506/2019 C/52507/2019 C/52508/2019 C/52509/2019 C/52510/2019 C/52511/2019 C/52512/2019 C/52513/2019 C/52514/2019 C/52515/2019 C/52516/2019 C/52517/2019 C/52518/2019 C/52519/2019 C/52520/2019 C/52521/2019 C/52522/2019 C/52523/2019 C/52524/2019 C/52525/2019 C/52526/2019 C/52527/2019 C/52528/2019 C/52529/2019 C/52556/2019 C/52557/2019 C/52558/2019 C/52559/2019 C/52560/2019 C/52561/2019 C/52562/2019 C/52563/2019 C/52564/2019 C/52565/2019 C/52566/2019 C/52567/2019 C/52568/2019 C/52569/2019 C/52570/2019 C/52571/2019 C/52572/2019 C/52573/2019 C/52574/2019 C/52575/2019 C/52576/2019 C/52577/2019 C/52578/2019 C/52579/2019 C/52580/2019 C/52581/2019 C/52582/2019 C/52620/2019 C/52621/2019 C/52622/2019 C/52623/2019 C/52624/2019 C/52625/2019 C/52626/2019 C/52627/2019 C/52628/2019 C/52629/2019 C/52630/2019 C/52655/2019 C/52656/2019 C/52657/2019 C/52658/2019 C/52659/2019 C/52660/2019 C/52661/2019 C/52662/2019 C/52663/2019 C/52664/2019 C/52665/2019 C/52666/2019 C/52667/2019 C/52668/2019 C/52669/2019 APPEARANCE:
Shri N.L. Jangir, Advocate for the appellant Shri Rakesh Kumar, Authorized Representative of the Department CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER NO._51191-51282/2023_ DATE OF HEARING: 30.08.2023 DATE OF DECISION: 13.09.2023 2 C/52491/2019 and 91 others JUSTICE DILIP GUPTA M/s Sumridhi Aluminium (P) Limited, Palwal1 imported various kinds of scrap of aluminium like zorba, tally and twitch during the period from June 2018 to October 2018 and filed 92 Bills of Entry. The assessing officer enhanced the assessable value on the basis of contemporaneous imports data, which value was accepted by the appellant in writing with a further statement that the appellant would not want a speaking order to be issued nor it would require any show cause notice to be issued or opportunity of personal hearing to be granted. The appellant also deposited customs duty on the enhanced value accepted by the appellant and thereafter out of charge order was also issued by the department. It is thereafter that the appellant filed appeals before the Commissioner (Appeals) challenging the enhancement by the assessing officer of the value mentioned by the appellant in the Bills of Entry. These appeals have been dismissed by the Commissioner (Appeals) by four separate orders namely the order dated 15.11.2018 covering 39 appeals; the order dated 07.12.2018 covering 15 appeals; the order dated 15.11.2018 covering 27 appeals; and the order dated 07.12.2018 covering 11 appeals. The Commissioner (Appeals) has upheld the order of reassessment and rejected the appeals primarily for the reason that the appellant had accepted the re-determined enhanced value of the imported aluminium scrap in writing and thereafter cleared the imported 1 the appellant 3 C/52491/2019 and 91 others goods after paying duty on the enhanced value. The Commissioner (Appeals) also found as a fact that the re-determined value had been arrived at in accordance with internationally accepted London Metal Exchange prices with reasonable discounts. It is these four orders passed by the Commissioner (Appeals) covering 92 appeals that have been assailed by the appellant.
2. Shri N.L. Jangir, learned counsel appearing for the appellant made the following submissions:
i. The assessing officer has not given any specific instance of contemporaneous import wherein the declared value of aluminium scrap is higher than the value declared by the appellant in the Bills of Entry;
ii. The assessing officer did not elaborate the reasons for rejecting the declared value and, therefore, there was no occasion to enhance the value of goods declared by appellant on the basis of contract price or commercial invoice under section 14 of the Customs Act 19622;
iii. The value declared by the appellant did not fall under the exceptions provided under the Customs Valuation (Determination of Value of Imported Goods) Rules 20073 and , therefore, could not have rejected under rule 12 of Valuation Rules;
iv. The appellant had not submitted letters of acceptance of the enhanced value nor the appellant had submitted any
2. the Customs Act
3. the Valuation Rules 4 C/52491/2019 and 91 others letter stating that show cause notice should not be issued or a speaking order should not be passed;
v. In support of the contentions, learned counsel for the appellant placed reliance upon a decision of the Supreme Court in C.C.E & S.T., Noida vs Sanjivani Non-Ferrous Trading Pvt. Ltd.4 and other cases to which reference shall be made at the appropriate stage.
3. Shri Rakesh Kumar, learned authorized representative appearing for the Department made the following submissions:
i. The Assessing Officer had reason to doubt the accuracy of the value declared in the Bills of Entry submitted by the importer as they were grossly undervalued as compared to the contemporaneous import data and since the importer had submitted letters clearly stating that it agreed for enhancement of the value and did not require any personal hearing or a speaking order, the Assessing Officer enhanced the value. Thus, once having accepted the value of the goods in writing and cleared the goods on payment of duty it was not open to the importer to subsequently challenge the value of the goods;
ii. The finding of the Commissioner (Appeals) that the importer had accepted the enhanced value does not suffer from any illegality as it is based on records and the appellant has made an incorrect statement that letters accepting the enhanced value were not submitted by the
4 2019 (365) E.L.T.. 3 (S.C.) 5 C/52491/2019 and 91 others appellant;
iii. The out of charge was given only after the appellant had deposited customs duty on the enhanced value and all the appeals have been filed by the appellant before the Commissioner (Appeals) after the out of charge order was given; and iv. The submission of the appellant that the valuation of the cleared goods has to be first rejected under rule 12 of the Valuation Rules is not correct in the facts and circumstances of the present case.
4. The submissions advanced by the learned counsel appearing for the appellant and the learned authorized representative appearing for the Department have been considered.
5. Section 14 of the Customs Act deals with „Valuation of Goods‟ and is reproduced below:
"Section 14. Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf:
Provided xxxxxx xxxxxx xxxxxx"
6. It would be seen that section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may 6 C/52491/2019 and 91 others be specified in the rules made in this behalf. The Valuation Rules have been framed in exercise of the powers conferred by section 14 of the Customs Act. Rule 12 deals with rejection of the declared value and is reproduced below:
"Rule 12. Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule(1) of rule 3.
(2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule Explanation.-(1) For the removal of doubts, it is hereby declared that:-
(i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9.
(ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers.
(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include -
(a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed;
(b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price;
(c) the sale involves special discounts limited to exclusive agents;
(d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production;
(e) the non declaration of parameters such as brand, grade, specifications that have relevance to value;
(f) the fraudulent or manipulated documents."
7. Rule 12 provides that when the proper officer has reason to 7 C/52491/2019 and 91 others doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of rule 3(1). Explanation
(iii) to rule 12 provides that the proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons, which may include any of the six reasons contained therein, one of which is that there is a significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed.
8. It would also be useful to reproduce the relevant portion of section 17(5) of the Customs Act and it is as follows:
"Section 17. Assessment of duty.- (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, selfassess the duty, if any, leviable on such goods. (2) The proper officer may verify the entries made under section 46 or section 50 and the self-assessment of goods referred to in sub-
section (1) and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary. Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria.
(3) For the purposes of verification under subsection (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.
(4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, 8 C/52491/2019 and 91 others the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.
(5) Where any re-assessment done under subsection (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re- assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be.
9. It would be seen that though in a case where re-assessment has to be done under sub-section (4) of section 17 of the Customs Act, the proper officer is required to pass a speaking order on the re-assessment, but if the importer or exporter confirms his acceptance of the re-assessment, a speaking order is not required to be passed.
10. Though the learned counsel for the appellant submitted that the appellant had not submitted any letter accepting the enhanced value on the basis of the contemporaneous NIDB data or that it did not require any speaking order on the reassessment or any show cause notice or personal hearing to be provided, but the learned authorized representative appearing for the Department has placed such letters of the appellant accepting the enhanced value in respect of all the appeals, except a few.
11. The letters submitted by the appellant which have been produced by the learned authorized representative appearing for the department are similarly worded and one such letter dated 21.06.2018 submitted by the appellant to the Deputy /Assistant Commissioner of Customs signifying acceptance of value in respect of goods covered by Bill of Entry number 6791989 dated 14.06.2018 is reproduced below:-
9
C/52491/2019 and 91 others SUMRIDHI ALUMINIUM PRIVATE LIMITED (AN ISO/TS 16949 : 2009 CERTIFIED COMPANY) Works DEVALI-MANDKOL ROAD, VILLAGE-BHAGOLA DISTT: PALWAL (HARYANA) Phone: 09254370829-37, Fax: 011-46570836 Superintendent Please Allow Date: 21.06.2018 To, The Deputy/Assistant Commissioner of Customs ICD Palwal Sir, Subject: Acceptance of value in respect of goods covered vide Bill of entry no. 6791989 Dtd. 14.06.2018 regarding.
We M/s Sumridhi Aluminium Pvt. Ltd have imported Twitch_ (code/grade of Aluminum scrap) Aluminum scrap under bill of lading no MSCUWK710587 dtd 28.04.2018 and have filed a bill of entry no 6791989 dtd 14.06.2018 for clearance of the same declaring value therein @1475/mt(CIF/CSF/CI). We were shown the contemporarious Import of the said Aluminum scrap from the NIDB date and LME price of prime Aluminum for the corresponding period @________/mt Having taken into consideration factors like insurance, freight, landing charges etc, to arrive at the assessable value of said _Twitch_ (code/grade) Aluminum scrap a discount of _25%_ on the said LME price of prime Aluminum is correct and appropriate. Accordingly, in view of the said contemporarious NIDB date and discount from LME price of prime Aluminum, we voluntarily accept the assessable value of the said@$ 1801/mt.
2. Since we are voluntarily accepting the price of said Twitch_(code/grade) Aluminum scrap, we do not want any speaking order on the re-assessment of the same. We also do not want any Show Cause Notice and opportunity of personal hearing as provided under Section 124 of the Customs Act 1962.
3. It is requested to urgently release our consignment at the above mentioned rate.
Yours faithfully Cont. no. 011 46570835 IEC no. 0510080626 FOR SUMRIDHI ALUMINIUM PVT. LTD.
Sd-
Auth Signatory
12. The aforesaid letter clearly mentions that though the appellant had filed the said Bill of Entry for clearance of twitch grade 10 C/52491/2019 and 91 others aluminium scrap by declaring the value as 1475 dollars per MT but on being shown the contemporaneous import data of the aluminium scrap from the NIDB data and Lucknow Metal Exchange Price, the appellant has voluntarily accepted the assessable value of the goods at the rate of 1801 dollars per MT. The letter also specifically states that the appellant would not want any speaking order to be passed on the re-assessment nor would the appellant require a show cause notice to be issued or opportunity of personal hearing to be provided. In fact, the appellant also requested that the consignment should be released urgently at the above mentioned rate.
13. It is not possible to accept the bald submission made by learned counsel for the appellant that the appellant had not submitted the letters. The Commissioner (Appeals) has recorded a categorical finding of fact that the appellant had accepted the redetermined and enhanced value in the letters submitted by the appellant and the finding recorded by the Commissioner (Appeals) is as follows:-
5.9 In addition, it is on record that the appellant have from time to time accepted the re-determination and enhanced values of the impugned Bills of Entry and cleared the imported goods after paying duty on enhanced values. Vide letters submitted to the jurisdictional Asstt./Deputy Commissioner of Customs, the appellant have agreed for accepting the values of the goods as re-
determined by the Department and voluntarily relinquished their right to issuance of Show Cause Notices and personal hearings too. Thus, it is evident that the appellant have accepted the method of re-determination of value and also the enhanced prices for purpose of assessment.
14. This finding has not been challenged in the appeals since such a ground has not been taken in the memo of appeal. It is also seen that it is only after the submission of such letters by the appellant and after payment of customs duty on the enhanced value accepted 11 C/52491/2019 and 91 others by the appellant that the out of charge orders were issued and the goods were cleared. The appeals were filed by the appellant before the Commissioner (Appeals) much after the out of charge orders were issued. If the appellant had actually not submitted the letters there was no reason for the appellant to pay customs duty on the enhanced value that was accepted by the appellant. It is more than apparent that after having accepted the enhanced value and after having paid customs duty and after having received the out of charge orders and after having cleared the goods, that the appellant filed the appeals before the Commissioner (Appeals) to challenge the enhancement of the value of the goods.
15. As noted above, it is because of the letters submitted by the appellant that the goods were cleared after the appellant deposited the requisite customs duty on the enhanced value. There was no reason for the appellant to pay the customs duty on the enhanced value if the appellant was actually contesting the enhanced value and had not submitted any letters accepting the enhanced value.
16. A chart containing Customs Appeal Number, Bill of Entry Number with date, date of acceptance of valuation and out of charge order date, as provided by the department, is reproduced below:-
S. Customs Bill of Date of Out of
No. Appeals Entry No. Date Acceptance charge
of
valuation
1. C/52556/2019 6791989 14.06.2018 21.06.2018 02.07.2018
2. C/52557/2019 6975350 23.06.2018 02.07.2018 02.07.2018
3. C/52558/2019 6964317 26.06.2018 05.07.2018 05.07.2018
4. C/52559/2019 6897576 21.06.2018 03.07.2018 04.07.2018
5. C/52560/2019 6961334 26.08.2018 05.07.2018 05.07.2018
6. C/52561/2019 6961300 26.08.2018 05.07.2018 06.07.2018
7. C/52562/2019 6963921 26.06.2018 05.07.2018 06.07.2018
12
C/52491/2019 and 91 others
8. C/52563/2019 6897566 21.06.2018 09.07.2018 10.07.2018
9. C/52564/2019 6897605 21.06.2018 11.07.2018 12.07.2018
10. C/52565/2019 6897493 21.06.2018 11.07.2018 12.07.2018
11. C/52566/2019 7008983 29.06.2018 16.07.2018 17.07.2018
12. C/52567/2019 7008973 29.06.2018 23.07.2018 24.08.2018
13. C/52568/2019 7256797 18.07.2018 24.07.2018 24.07.2018
14. C/52569/2019 7299781 20.07.2018 25.07.2018 25.07.2018
15. C/52570/2019 7299793 20.07.2018 27.07.2018 28.07.2018
16. C/52571/2019 7257211 18.07.2018 30.07.2018 30.07.2018
17. C/52572/2019 7429175 30.07.2018 09.08.2018 10.08.2018
18. C/52573/2019 7257259 18.07.2018 01.08.2018 01.08.2018
19. C/52574/2019 7256860 18.07.2018 01.08.2018 01.08.2018
20. C/52575/2019 7299818 20.07.2018 31.07.2018 01.08.2018
21. C/52576/2019 7678583 17.08.2018 29.08.2018 29.08.2018
22. C/52577/2019 7634298 17.08.2018 23.08.2018 23.08.2018
23. C/52578/2019 7619834 13.08.2018 23.08.2018 24.08.2018
24. C/52579/2019 7597448 11.08.2018 20.08.2018 21.08.2018
25. C/52580/2019 7442344 31.07.2018 14.08.2018 14.08.2018
26. C/52581/2019 7492194 03.08.2018 13.08.2018 14.08.2018
27. C/52582/2019 7443354 31.07.2018 20.08.2018 20.09.2018
28. C/52620/2019 8195579 25.09.2018 01.10.2018 03.09.2018
29. C/52621/2019 8341007 05.10.2018 06.10.2018 10.10.2018
30. C/52622/2019 8338828 05.10.2018 09.10.2018 09.10.2018
31. C/52623/2019 8355054 06.10.2018 15.10.2018 16.10.2018
32. C/52624/2019 8355028 06.10.2018 11.10.2018 11.10.2018
33. C/52625/2019 8443739 13.10.2018 15.10.2018 16.10.2018
34. C/52626/2019 8341586 05.10.2018 15.10.2018 16.10.2018
35. C/52627/2019 8033253 13.09.2018 07.09.2018 17.09.2018
36. C/52628/2019 7958476 07.09.2018 14.09.2018 14.09.2018
37. C/52629/2019 8115690 19.09.2018 24.09.2018 25.09.2018
38. C/52630/2019 8195623 25.09.2018 26.09.2018 26.09.2018
39. C/52655/2019 8182085 24.09.2018 01.10.2018 24.09.2018
40. C/52656/2019 8095885 18.09.2018 24.09.2018 25.09.2018
41. C/52657/2019 8056815 15.09.2018 24.09.2018 25.09.2018
42. C/52659/2019 8089709 17.09.2018 19.09.2018 20.09.2018
43. C/52660/2019 7845115 30.08.2018 10.09.2018 10.09.2018
44. C/52661/2019 8443534 13.10.2018 16.08.2018 16.10.2018
45. C/52663/2019 8443543 13.10.2018 16.08.2018 16.10.2018
46. C/52664/2019 8334909 05.10.2018 11.10.2018 11.10.2018
47. C/52666/2019 8332783 05.10.2018 09.10.2018 10.10.2018
48. C/52667/2019 8182088 24.09.2018 05.10.2018 06.10.2018
49. C/52668/2019 8226718 27.09.2018 05.10.2018 05.10.2018
50. C/52669/2019 8181996 24.09.2018 05.10.2018 05.10.2018
51. C/52665/2019 8197321 25.09.2018 10.10.2018 11.10.2018
52. C/52662/2019 8463038 15.10.2018 16.10.2018 17.10.2018
53. C/52658/2019 7904777 04.09.2018 11.09.2018 12.09.2018
54. C/52491/2019 6876247 20.06.2018 29.06.2018 29.06.2018
55. C/52492/2019 6992279 25.06.2018 03.07.2018
56. C/52493/2019 6910334 12.06.2018 06.07.2018
57. C/52494/2019 6866620 19.06.2018 05.07.2018 05.07.2018
13
C/52491/2019 and 91 others
58. C/52495/2019 6961347 26.06.2018 12.07.2018
59. C/52496/2019 6994615 28.06.2018 12.07.2018
60. C/52497/2019 7022860 30.06.2018 13.07.2018
61. C/52498/2019 7075587 04.07.2018 18.07.2018
62. C/52499/2019 7075584 04.07.2018 18.07.2018
63. C/52500/2019 7089403 05.07.2018 18.07.2018
64. C/52501/2019 7026477 30.06.2018 19.07.2018
65. C/52502/2019 7107473 06.07.2018 24.07.2018
66. C/52503/2019 7006914 29.06.2018 24.07.2018
67. C/52504/2019 7008465 29.06.2018 28.07.2018
68. C/52505/2019 2063210 03.07.2018 26.07.2018
69. C/52506/2019 7678521 17.08.2018 28.08.2018 17.08.2018
70. C/52507/2019 7606191 13.08.2018 27.08.2018
71. C/52508/2019 7492096 03.08.2018 23.08.2018
72. C/52509/2019 7557797 08.08.2018 23.08.2018 25.08.2018
73. C/52510/2019 7259809 18.07.2018 02.08.2018
74. C/52511/2019 7544498 07.08.2018 25.08.2018
75. C/52512/2019 7620015 13.08.2018 28.08.2018 31.08.2018
76. C/52513/2019 7492213 03.08.2018 21.08.2018
77. C/52514/2019 2442227 31.07.2018 21.08.2018
78. C/52515/2019 7384589 27.07.2018 17.08.2018
79. C/52516/2019 7538992 07.08.2018 14.08.2018
80. C/52517/2019 7597515 11.08.2018 27.08.2018
81. C/52518/2019 2538893 07.08.2018 13.08.2018 14.08.2018
82. C/52519/2019 2538954 07.08.2018 08.08.2018
83. C/52520/2019 2443064 31.07.2018 07.08.2018
84. C/52521/2019 2384339 27.07.2018 08.08.2018
85. C/52522/2019 7346406 24.07.2018 07.08.2018
86. C/52523/2019 2305961 21.07.2018 08.08.2018
87. C/52524/2019 7262581 18.07.2018 06.08.2018
88. C/52525/2019 7257175 18.07.2018 06.08.2018 07.08.2018
89. C/52526/2019 7257208 18.07.2018 06.08.2018
90. C/52527/2019 7294941 20.07.2018 07.08.2018
91. C/52528/2019 7294936 12.07.2018 03.08.2018
92. C/52529/2019 7178317 29.06.2018 31.07.2018 28.07.2018
17. It is seen from a perusal of section 17(4) of the Customs Act that the proper officer can re-assess the duty leviable, if it is found on verification, examination or testing of the goods or otherwise that the self-assessment was not done correctly. Subsection (5) of section 17 provides that where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer, the proper officer shall pass a speaking order on 14 C/52491/2019 and 91 others the re-assessment, except in a case where the importer confirms his acceptance of the said re-assessment in writing.
18. In the present case, as noticed above, the proper officer doubted the truth or accuracy of the value declared by the appellant for the reason that contemporaneous data had a significantly higher value. It was open to the appellant to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared and seek a reasonable opportunity of being heard, but the appellant did not do so. On the other hand, the appellant submitted in writing that though it had declared the value of the imported goods at a particular price, but on being shown contemporaneous data, it agreed that the value of the goods should be enhanced to that value indicated by the proper officer. The appellant also specifically stated that it did not want any show cause notice to be issued or personal hearing to be provided or a speaking order to be passed on the Bills of Entry. It needs to be noted that section 124 of the Customs Act provides for issuance of a show cause notice and personal hearing, and section 17(5) of the Customs Act requires a speaking order to be passed on the Bills of Entry, except in a case where the importer/exporter confirms the acceptance in writing.
19. It is no doubt true that the value of the imported goods shall be the transaction value of such goods when the buyer and the seller of goods are not related and the price is the sole consideration, but this is subject to such conditions as may be specified in the rules to be made in this behalf. The Valuation Rules have been framed. A perusal of rule 12(1) indicates that when the 15 C/52491/2019 and 91 others proper officer has reason to doubt the truth or accuracy of the value of the imported goods, he may ask the importer to furnish further information. Rule 12(2) stipulates that it is only if an importer makes a request that the proper officer shall, before taking a final decision, intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared and provide a reasonable opportunity of being heard. To remove all doubts, Explanation 1(iii)(a) provides that the proper officer can have doubts regarding the truth or accuracy of the declared value if the goods of a comparable nature were assessed at a significantly higher value at about the same time.
20. Explanation (1)(i) to rule 12 of the Valuation Rules, however, provides that the rule only provides a mechanism and procedure for rejection of declared value and does not provide a method for determination of value and if the declared value is rejected, the value has to be determined by proceeding sequentially in accordance with rules 4 to 9.
21. In Century Metal Recycling Pvt. Ltd. vs Union of India5, the Supreme Court summarized the provisions of rule 12 of the Valuation Rules and the observations are as follows :
"15. The requirements of Rule 12, therefore, can be summarised as under :
(a) The proper officer should have reasonable doubt as to the transactional value on account of truth or accuracy of the value declared in relation to the imported goods.
(b) Proper officer must ask the importer of such goods further information which may include documents or evidence.
(c) On receiving such information or in the absence of response from the importer, the proper officer has to apply his mind and decide whether or not reasonable doubt as to the truth or accuracy of the value so declared persists.
(d) When the proper officer does not have reasonable
5. 2019 (367) ELT-(SC) 16 C/52491/2019 and 91 others doubt, the goods are cleared on the declared value.
(e) When the doubt persists, sub-rule (1) to Rule 3 is not applicable and transaction value is determined in terms of Rules 4 to 9 of the 2007 Rules.
(f) The proper officer can raise doubts as to the truth or accuracy of the declared value on certain reasons which could include the grounds specified in clauses (a) to (f) in clause (iii) of the Explanation.
(g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested.
(h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules.
16. Proper officer can therefore reject the declared transactional value based on certain reasons to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression grounds for doubting the truth or accuracy of the value declared has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the reason to doubt exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared."
22. Despite the specific requests made by the appellant in the letters submitted by it, it was sought to be contended by the learned counsel for the appellant that the transaction value of the imported goods alone should have been treated to be the value of the goods, as provided for under rule 3(1) of the Valuation Rules, since none of the conditions stipulated in the proviso to sub-rule (2) of rule 3 were attracted and in any case, if the declared value could not be determined under sub-rule (1) of rule 3, it was required to be determined by proceeding sequentially through rules 4 to 9.
23. Rule 3 of the Valuation Rules is, therefore, reproduced below:
"Rule 3. Determination of the method of valuation.-
(1) Subject to rule 12, the value of imported goods shall be the 17 C/52491/2019 and 91 others transaction value adjusted in accordance with provisions of rule 10;
(2) Value of imported goods under sub-rule (1) shall be accepted:
Provided that -
(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which -
(i) are imposed or required by law or by the public authorities in India; or
(ii) limit the geographical area in which the goods may be resold; or
(iii) do not substantially affect the value of the goods;
(b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued;
(c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and
(d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below:
(3) xxxxxxxx xxxxxxxxx xxxxxxxxx (4) If the value cannot be determined under the provisions of sub-
rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9."
24. The very fact that the appellant had agreed for enhancement of the declared value in the letters submitted to the assessing authority, itself implies that the appellant had not accepted the value declared by it in the Bills of Entry. The value declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the appellant had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under rule 3(1) for the reason that the 18 C/52491/2019 and 91 others declared value has been rejected under sub rule 2, that the value of the imported goods is required to be determined by proceeding sequentially through rules 4 to 9. As noticed above, the appellant had accepted the enhanced value. There was, therefore, no necessity for the assessing officer to determine the value in the manner provided for in rules 4 to 9 of the Valuation Rules sequentially.
25. The aforesaid views find support from the decision of the Tribunal in Commissioner of Customs, Delhi vs Hanuman Prasad & Sons6.
26. In this connection, it would also be useful to refer to a decision of this Tribunal in Advanced Scan Support Technologies vs Commissioner of Customs, Jodhpur7, wherein the Tribunal, after making reference to the decisions of the Tribunal in Vikas Spinners vs Commissioner of Customs, Lucknow8 and Guardian Plasticote Ltd. vs CC (Port), Kolkotta9 , held that as the appellant therein had expressly given consent to the value proposed by the Revenue and stated that it did not want any show cause notice or personal hearing, it was not necessary for the Revenue to establish the valuation any further as the consented value became the declared transaction value requiring no further investigation or justification. Paragraph 5 of the decision is reproduced below:
"5. We have considered the contentions of both sides. We find that whatever may be the reasons, the appellant expressly gave its consent to the value proposed by
6. 2020 (12) TMI 1092-CESTAT, New Delhi
7. 2015 (326) ELT 185 (Tri.-Del)
8. 2001 (128) ELT 143 (Tri.-Del)
9. 2008 (223 ELT 605 (Tri.- Kol) 19 C/52491/2019 and 91 others Revenue and expressly stated that it did not want any Show Cause Notice or personal hearing. Even the duty was paid without protest. By consenting to enhancement of value and thereby voluntarily foregoing the need for a Show Cause Notice, the appellant made it unnecessary for Revenue to establish the valuation any further as the consented value in effect becomes the declared transaction value requiring no further investigation or justification. To allow the appellant to contest the consented value now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no Show Cause Notice, could/would have invited allegation of harassment and delay in clearance of goods. When Show Cause Notice is expressly foregone and the valuation is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per his consent suffered from fatal infirmity and such onus has not been discharged. Further, valuation of such goods requires their physical inspection and so reassessment of value in the absence of goods will not be possible. The case of Eicher Tractors v. Union of India (supra) cited by the appellant is not relevant here as in that case there was no evidence that the assessee had consented to enhancement of value."
[emphasis supplied]
27. In Vikas Spinners, the Tribunal dealing with a similar situation, observed as under :
"7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry dated 7-5-1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5-1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally stopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images, (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of 20 C/52491/2019 and 91 others loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly."
[emphasis supplied]
28. In Guardian Plasticote., the Tribunal after placing reliance on the decision of the Tribunal in Vikas Spinners, also observed as follows :
"4. The learned Advocate also cites the decision of the Tribunal in the case of M/s. Vikas Spinners v. C.C., Lucknow10 - in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is stopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had lodged any protest and on the contrary their letter dated 21-4-1999 clearly points to acceptance of the enhanced value by them, the cited decision advances the cause of the department rather than that of the Appellants contrary to the claim by the learned Counsel."
[emphasis supplied]
29. In BNK Intrade (P) Ltd. vs Commissioner of Customs, Chennai11 , the Tribunal observed as follows :
"2.............. It is also to be noted that the importer had also agreed for enhancement of the price based on contemporaneous prices available with the Department. We, therefore, find no merit in the contention raised in the appeal challenging the valuation and seeking the refund of the differential duty paid by the appellants on enhancement."
30. The following position emerges from the aforesaid decisions of the Tribunal:
(i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation;
(ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and
(iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted.
10. 2001 (128) E.L.T. 143 (Tri.-Del.)
11. 2002 (140) ELT 158 (Tri.-Del) 21 C/52491/2019 and 91 others
31. What, therefore, follows is that once the appellant had accepted the enhanced value it was not necessary for the revenue to determine the valuation as the consented value, in effect, became the declared transaction value. Further, once the appellant accepted the enhanced value it would not be open to the appellant to now contend that the procedure as contemplated under rule 12 of the Valuation Rules should have been complied with.
32. Learned counsel for the appellant has placed reliance upon certain decisions.
33. In Sanjivani Non-Ferrous Trading, the Supreme Court observed that it was necessary for the assessing officer to give reasons as to why the transaction value declared in the Bills of Entry was rejected. This decision would not come to the aid of the appellant for the reason that in the present case the appellant had accepted the enhanced value of the imported goods.
34. In Century Metal Recycling Pvt. Ltd. vs Union of India12, the Supreme Court again emphasized what was stated in Sanjivani Non-Ferrous Trading.
35. In Guru Rajendra Metalloys India Pvt. Ltd. vs C.C.- Ahmedabad, Gujarat13, the enhancement that was made was found to be not in consonance with the consent letter given by the appellant. This decision would also, therefore, not come to the aid of the appellant.
12. 2019 (367) E.L.T. 3 (S.C.) 13 . Customs Appeal No. 12338 of 2019 decided on 29.05.2020 22 C/52491/2019 and 91 others
36. In M/s Sunland Alloys vs C.C.,- Ahmedabad14, the Tribunal found that the assessing authority had reassessed the Bills of Entries by enhancing the value not on the basis of the any material evidence but on the basis of Director General of Valuation guideline letter dated 15.11.2018. The Tribunal held that the assessing officer should have followed the provisions of the Valuation Rules and should not have made the reassessment only on the basis of the Director General of Valuation guideline. The reason would, therefore, not help the appellant.
37. There is, therefore, no good reason to interfere with the orders passed by the Commissioner (Appeals) upholding the orders of reassessment. All the aforesaid 92 appeals filed to assail the order dated 15.11.2018 covering 39 appeals; the order dated 07.12.2018 covering 15 appeals; the order dated 15.11.2018 covering 27 appeals; and order dated 07.12.2018 covering 11 appeals are, accordingly, dismissed.
(order pronounced in the open Court on__13.09.2023_) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) Rekha
14. Customs Appeal No. 12505 of 2019 decided on 01.06.2020