Custom, Excise & Service Tax Tribunal
M/S. Marvel Agencies vs Commissioner Of Customs on 24 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Customs Appeal No. 512 & 513 of 2011
[Arising out of Order-In-Original No. 19/2011 dated 31.3.2011 passed by Commissioner of Customs, ICD, Delhi]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Mr. V Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Marvel Agencies Appellant
Shri Saket Kejriwal, Properitor
Vs.
Commissioner of Customs Respondent New Delhi
Appearance:
Shri Saket Kejriwal, Properitor for the Appellants Shri Govind Dixit, ARs for the Respondent CORAM:
Hon'ble Ms Archana Wadhwa, Member (Judicial) Hon'ble Mr. V Padmanabhan, Member (Technical) Date of Hearing: 10.08.2016 Date of Decision: 24.08.2016 FINAL ORDER NO . 53189-53190 /2016 Per Archana Wadhwa (for the Bench):
As per facts on record the appellant imported electric motors of assorted KW from China and filed Bill of Entry dated 22.1.2009 accompanied by invoices issued by the supplier of goods, wherein the total value of the consignment was declared as Rs.5,90,904/- in respect of 599 pieces of electric motors. Revenue by entertaining a view that value declared by the assessee was on the lower side, detained the consignment and made further investigation. The value so declared by the appellant was compared with NIDB data value and it was found that there was variation in respect of same. Services of one Shri Pankaj Gupta, Chartered Engineer were availed, who after physical inspection of imported goods opined that the value of 599 pieces of electric motors of assorted KW should be around Rs.40.48 lakh. Accordingly, the consignment was seized under Panchnama dated 5.3.2009 and subsequently provisionally released.
2. Thereafter, the investigations were also carried out in respect of past clearance made by the appellant during the period 23.2.2007 to 29.1.2008 and the value was compared with NIDB data. On such comparison, the value of previous consignment were also found to be on the lower side. Statement of Shri Saket Kejriwal, proprietor of the importer company were recorded wherein he deposed that they were importing electric motors from M/s. Zhejiang Dasu Electric Machinery Stock Co. Ltd., China and were clearing the same from ICD, TKD, New Delhi. The consideration for the said electric motors were paid to their foreign supplier from their company bank account from ICICI Bank Model Town; that order for electric motors were given on phone to foreign supplier and declared value was the correct value which was paid by him to the foreign supplier. He also explained that the variation in the price as declared by him and as adopted by the Revenue from NIDB data is on account of the fact that motors imported by him are of inferior quality as compared to branded electric motors in India and durability of the motor is not long lasting and on account of recession in the electric goods in the international market, lower price were quoted by the foreign supplier and the same has been paid to him. He also requested the Revenue to get the valuation from some expert in the field and if any difference is found, he would discharge his duty liability.
His subsequent statement was recorded on 23.2.2009 who, when shown the report of the Chartered Engineer, agreed that if, as per law, the NIDB data value has to be adopted, he will pay the differential duty. Again, in his statement recorded on 28.7.2009, he admitted NIDB data value and agreed to pay the duty.
3. Based upon the above, the appellants were issued a show cause notice dated 8.10.2009 to propose enhancement of value in the current imported goods and also to demand duty in respect of earlier imports made by them in the past. The notice also proposed imposition of penalty.
4. Vide his impugned order Commissioner has upheld the proposal of enhancement of the assessable value as also confirmed the demand of duties in respect of previous imports made by them and further imposed penalty of Rs.1.06 crore approx. on the importing firm and of Rs. 20 lakh on the proprietor of the importer. The goods of the present consignment as also of the past consignment were held to be confiscable with an option to the appellant to redeem the same on payment of Redemption Fine of Rs.6 lakh and 75 lakh respectively.
5. The said order is impugned before us.
6. After having heard the appellants in person (who is also an advocate) we find that the entire case of the Revenue is based upon the value adopted from NIDB data. It is well settled law that the transaction value reflected in the invoices has to be first rejected by the Revenue as incorrect value, based upon sufficient evidence on record. In the present case, the adjudicating authority has not referred to any tangible evidence on record to show that the transaction value as entered into by the importer and supplier of the goods and as reflected in the invoices produced by the importer is incorrect value. The adjudication authority has simplicitor observed that invoice value in respect of the items imported is liable to be rejected under Rule 12 of the Customs Valuation Rules as the same was on the lower side. He has further observed that valuation of the goods under Rule 4 is ruled out as the importer of the identical goods could not be found. Accordingly, he has adverted to NIDB data and has enhanced the value.
The appellants contention is that NIDB data is secondary piece of evidence and cannot be relied upon in the absence of supporting evidence relating to similar goods like the Bills of Entries, invoices, literature of the goods, quantity and quality of the imported goods. It stands contended before us that electric motors are of various types and the NIDB data pertained to import of Y series motors. The appellants contention is that electric motors imported by them were aluminum cable winding which has the shalf life of around six months whereas the data may relate to copper cable winding which has a long life of 10 years. The Revenue has not bothered to find out as to what type of electric motors were imported by the assessee.
We also note that the opinion of Chartered Engineer is based upon visual examination of the motors and same do not stand open to check out the contents and to find out efficiency of the motors. Such an opinion given on the basis of mere visual examination cannot be held to be binding. The Chartered Engineer also was not produced for crossed examination and as such his opinion cannot be given preference.
7. Tribunal in the case of Neha Intercontinental Pvt. Ltd. vs. Commissioner of Customs, Goa [2006 (202) ELT 530 (Tri-Mum)] has held in the absence of rejection of transaction value, invoice value requires acceptance and when the contemporaneous import of similar goods is not established, value cannot be enhanced. In the case of Commissioner of Customs vs. Modern Overseas [2005 (184) ELT 65 (Tri-Delhi)] NIDB data was held to be insuffient, in the absence of clarity about various parameters. List of such decisions is unending and it is sufficient to say that NIDB data has been held to be insufficient for enhancement of value, in the absence of any other independent evidence.
Admittedly in the present cases, there is no such evidence produced by the Revenue except reference to the NIDB data. We have already taken note of the appellants contention that electric motors though imported from the same importer to which NIDB data relates to, cannot be held to be comparable on account of use of different types of cables for winding purpose. It may be observed that one manufacturer can manufacture the same goods but different qualities, attracting different prices. As such, for comparing the value of one product of the same manufacturer with the other product manufactured by him, it has to be established that both types of goods were identical. In the absence of any such efforts made by the Revenue to establish the comparable nature of the imported goods with the other imports, enhancement cannot be upheld.
8. Revenue has not produced any evidence that there was any additional flow back of money to the foreign supplier to whom all the payments were made through ICICI Bank. As already held that there is no evidence on record to reject the transaction value, in which case the value has to bed adopted as the correct value.
9. For all the reasons recorded above, we find no merits in the Revenues stand. The impugned order is set aside and appeal allowed with consequential relief to the appellants.
(pronounced in the open court on )
( Archana Wadhwa ) Member(Judicial)
( V. Padmanabhan )
Member(Technical)
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