Custom, Excise & Service Tax Tribunal
C.C.(Icd), New Delhi vs M/S. A.S. Imports on 6 May, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 06.05.2015
For Approval &Signature :
Honble Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No.C/663/2009-CU[DB]
[Arising out of Order-in-Appeal No.ICD/293/2009, dated 11.09.2009 passed by the C.C.(Appeals), New Delhi]
C.C.(ICD), New Delhi Appellants
Vs.
M/s. A.S. Imports Respondents
Appearance Shri BB Sharma, DR - for the appellants Shri Amitabha Das, Consultant - for the respondents CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order No.51681/2015, dated 06.05.2015 Per Mr. R.K. Singh :
The appeal has been filed by Revenue against Order-in-Appeal No.ICD/293/2009, dated 11.09.2009, which set aside the Order-in-Original dated 28.07.2009 enhancing the declared value on the ground that the enhancement was arbitrary and not based on any valid legal grounds.
2. Revenue has contended that (i) the Commissioner (Appeals) has overlooked the fact that at the time of clearance of goods the importer did not object to the enhancement of the value and cleared the goods on enhanced value without any protest or objection, (ii) it is not correct for Commissioner (Appeals) to say that the consent of the importer even in writing is not legally sustainable, (iii) in the case of CC, Amritsar Vs. Polyglass Acrylic Mfg. Co. Pvt. Ltd. [2008 (227) ELT 209 (Tri.-Del)], CESTAT dismissed the appeal of the assessee on the ground that the value enhanced by the proper officer was accepted by the assessee who paid duty without any protest. Ld. Departmental Representative.
3. The respondent stated that the primary adjudicating authority did not comply with the directions of the Commissioner (Appeals) issued vide earlier Order-in-Appeal dated 07.08.2008 and therefore the impugned order is valid.
4. We have considered the contentions of both sides and perused the records. It is seen that the Commissioner (Appeals) vide his earlier order dated 07.08.2008 observed as under:-
4. I have gone through the case records. The Appellants were heard by my predecessor, but he did not pass any order. They were again heard on 6.8.2008 when they re-iterated the submissions as contained in their MOA. I have seen the relevant Bills of Entry against which the present appeals have been filed. It is a fact that no reasons are forthcoming as to why the value was enhanced. It is also not known from the relevant documents whether the consent of the Appellants was obtained to the said enhancement in declared value. As the enhancement in declared value has been ordered without the consent of the Appellants, an speaking order should have been issued within 15 days from the date of passing the assessment order in Bills of Entry under 17(5) of the Customs Act, 1962. As per the Appellants contention, this is yet to be done.
5. Before passing an order on these appeals, I would like to mention that I have been frequently coming across identical cases in which the declared value had been enhanced without citing any reasons in the Bills of Entry and such cases had been invariably set aside by Commissioner (Appeals) and, subsequently, by the CESTAT. For example, one such case is Commissioner of Customs, ICD, New Delhi vs. K.D. Exports 2008(227)ELT 494(Tri-Del). Thus, due to non application of mind at the time of enhancing the declared value, avoidable and unproductive work is being created. In the end, no revenue accrues to the exchequer. This merry go round has to stop. To avoid such unpleasant situation, it is necessary on the part of assessment officer to uphold the majesty of law, as also to follow judicial discipline.
6. One of the main grievances of the Appellants in the subject appeals is that they have been denied that benefit of section 17(5) of the Customs Act, 1962 because no speaking order has been issued. I also find that the Department has not adduced any evidence to reject the value and that no legally permissible steps were followed in enhancing the assessable value. From this, one can rightly conclude that assessment work has not been completed and to pass an order under these circumstances will amount to condoning the lapses on the part of assessing officer. In any case, where the declared value has been enhanced without the consent of the Appellant, the speaking order is a must.
7. In view of the above, the concerned assessing officers are directed to issue speaking orders within one month of the receipt of this order as the time prescribed under section 17(5) of the Customs Act, 1962 is already over. The aforesaid Order-in-Appeal dated 07.08.2008 was not appealed against by Revenue. In the wake of a clear recording of fact by Commissioner (Appeals) that there was no consent of the appellant for enhancement of value, the Tribunal judgment in the case of Polyglass Acrylic Mfg. Co. Pvt. Ltd. (supra) cited by Revenue has no relevance. In response to that Order-in-Appeal, the Assistant Commissioner passed Order-in-Original No.340/2009, dated 28.07.2009, which is reproduced below:-
The value of the goods appeared to be low. The goods were assessed after loading the value of the same by 40%.
The importer agreed to the same and recorded his consent in writing on the hard copies of the Bills of Entry.
Subsequently, the importer filed an appeal before the Commissioner of Customs (Appeals) against the assessment of the goods at the loaded value.
However the Commissioner of Customs (Appeals), vide Order in original nos. 270, 271 and 272 directed the assessing officer to pass a speaking order in the case justifying the action taken by the department.
I have carefully gone through the facts of the case and the evidence on record and I find merit in the contention of the department that the value of the goods appeared to be low. Data was verified from the NIDB and accordingly transaction value was rejected and declared value was loaded as provided under Rule 6 of the Valuation Rules, 1988.
Order:
I thus hold that the assessment is in order. In respect of appeal filed the respondent against the Order-in-Original dated 28.07.2009, the Commissioner (Appeals) vide impugned Order-in-Appeal observed as under:-
4. At the outset, it is pertinent to point out that any proposed enhancement in the declared assessable value has to be in conformity with Section 14 of the Customs Act, 1962, and rules made thereunder. The consent of the importer is meaningful, if the same has been obtained while enhancing the declared value by following legally permissible methods as per the relevant valuation rules. If the enhancement is arbitrary, then the consent of the importer on that enhancement, even in writing, is not legally sustainable, because, if the importer agrees to that then it will be only under pressure as no one would like the enhancement under the pleasant circumstances. Therefore, the enhancement of the declared value whether with or without the consent of the Appellants, has to be in accordance with the provisions of the Valuation Rules. Hence, one of the reasons given by the AC that the said enhancement had the consent of the Appellants is not sustainable in view of what has been stated above.
5. The other reason given by the concerned AC for enhancing the declared value is that the same has been done under Rule 6 of the Valuation Rules and on the basis of NIDB data. Here also, it is seen that no details have been given about the NIDB data i.e. particulars of importers, goods imported, date of imports, quantity, value etc. Moreover the rejection has to be on certain grounds and in accordance with Rule 3 read with Rule 12 of the Valuation Rules, 2007. No reasons are forthcoming from the subject OIO as to why the transaction value is not acceptable. At the same time, no reason has been given why the transaction value cannot be determined under Rule 3, 4 and 5 of the said Rules. In view of these reasons, the enhancement of the declared value is arbitrary and not based on any valid legal grounds, and, therefor, liable to be set aside. From the foregoing, it is clear that in spite of clear directions of the Commissioner (Appeals) vide Order-in-Appeal dated 07.08.2008 (reproduced above), the Order-in-Original dated 28.07.2009 was issued by disregarding those directions of the Commissioner (Appeals). Therefore, the Commissioner (Appeals) is right in observing that the said Order-in-Original dated 28.07.2009 is not sustainable as no details have been given regarding NIDB data, which has been referred to in the Order-in-Original (dated 28.07.2009). Further, the Order-in-Original mentioned that I find merit in the contentions of the Department that the value of the goods appeared to be low. There is no basis as how the adjudicating authority found merit in the contentions of the Department and in any case he (i.e., the adjudicating authority) only stated that the value appeared very low. We may mention here that this case has travelled upto Commissioner (Appeals) twice and even the second time, the adjudicating authority failed the requirement of passing a speaking order complying with the directions of the Commissioner (Appeals) contained in Order-in-Appeal dated 07.08.2008. In these circumstances, we are of the view that the impugned Order-in-Appeal (which contained detailed analysis as to why the Order-in- Original dated 28.07.2009 is not sustainable) suffers from no such infirmity as to warrant our intervention and so, we reject the appeal filed by the Revenue.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -2-