Custom, Excise & Service Tax Tribunal
Dixon Appliances Private Limited vs Ce & Cgst Noida on 18 September, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Customs Appeal No.70616 of 2017
(Arising out of Order-in-Original No.9/Pr.Commr./NOIDA-CUS/2017 dated
12.06.2017 passed by Commissioner of Customs, Noida)
M/s Dixon Appliances Pvt. Ltd., .....Appellant
(Now M/s Dixon Technologies Pvt. Ltd.,
B-14, Phase-II, Noida-201301)
VERSUS
Commissioner of Customs, Noida ....Respondent
(Inland Container Depot, Tilpan Dadri, Noida-201311) WITH Customs Appeal No.70617 of 2017 (Arising out of Order-in-Original No.9/Pr.Commr./NOIDA-CUS/2017 dated 12.06.2017 passed by Commissioner of Customs, Noida) Shri Sunil Vachani, Director, .....Appellant (M/s Dixon Appliances Pvt. Ltd., B-14, Phase-II, Noida-201301) VERSUS Commissioner of Customs, Noida ....Respondent (Inland Container Depot, Tilpan Dadri, Noida-201311) APPEARANCE:
Shri Atul Gupta, Advocate for the Appellants Shri A.K. Choudhary, Authorised Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NOs.70876-70877/2024 DATE OF HEARING : 18 September, 2024 DATE OF DECISION : 18 September, 2024 SANJIV SRIVASTAVA:
This appeal is directed against ORDER-IN-ORIGINAL No. 9/Pr. Commr./ NOIDA-CUS/2017 dated 12.06.2017 of the Principal Commissioner, Noida Customs. By the impugned order following has been held:
Customs Appeal Nos.70616-70617 of 2017 2 "ORDER 7.1 I reject the declared assessable value amounting to Rs.
3,88,85,002/- (Three Crore Eighty Eight Lakhs Eighty Five Thousand Two Only) for the 14" CPTs @ 20.25 (CF)25in terms of provisions of Section 14 of the Customs Act,. 1962 read with Rule 12 of the Customs (Determination of Value of Imported Goods) Rules, 2007 & re-determine the same at Rs, 3,01,84,610/- (Three Crore One Jlakh Eighty Four Thousand Six Hundred Ten only) @ 15.80 (CF) in terms of Rule 4 of the Rules ibid read with Section 14 of the Customs Act, 1962.
7.2 I hold that the goods (14" CPTs) imported by M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-II NOIDA from M/s Chunghwa Picture Tubes, Malaysia at re-determined value of Rs 3,01,84,610/- (Three Crore One lakh Eighty Pour Thousand Six Hundred Ten only) are liable to confiscation under Section 111 (d) and 111 (m) of the Customs Act, 1962.
7.3 I confirm the demand of anti dumping duty amounting to Rs. 89,04,373/- (Eighty Nine Lakhs Four Thousand Three Hundred Seventy Three Only) under the provisions of erstwhile Section 28 of the Customs Act, 1962 as made applicable to the like cases of short-levy / non-levy prior to 08.04.201 1 read with Section 9A(8) of the Customs Tariff Act, 1985.
7.4 I confirm the demand of interest on the anti-dumping duty amounting to Rs. 89,04,373/- (Rs Eighty Nine Lakhs Four Thousand Three Hundred Seventy Three Oniy) not paid by M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-I NOIDA under erstwhile/existing Sections 28AB/28AA of the Customs Act 1962 read with Section 9A(8) of the Customs Tariff Act, 1985 vide Explanation 2 to the present Section 28 of the Customs Act, 1962, read with Section 9A(8) of the Customs Tariff Act, 1985.
Customs Appeal Nos.70616-70617 of 2017 3 7.5 I impose a penalty of Rs 89,04,373/-(Rs Eighty Nine Lakhs Four Thousand Three Hundred Seventy Three Only) plus the interest amount chargeable on M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-II NOIDA under Section 114A of the Customs Act, 1962 7.6 I impose a penalty of Rs 15,00,000/- (Rs Fifteen Lakhs only) on M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-I NOIDA under Section 114AA of the Customs Aot, 1962.
7.7 I impose a penalty of Rs 10,00,000/- (Rs Ten Lakhs Only) on Shri Sunil Vachani, Director of M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-II NOIDA under Section 112 (a) of the Customs Act, 1962.
7.8 I impose a penalty of Rs 5,00,000/- (Rs Five Lakhs Only) on Shri Sunil Vachani Director of M/s. Dixon Appliances Pvt. Ltd., B-14, Phase-II NOIDA under Sectios 1 14AA of the Customs Act, 1962.
7.9 I impose a penalty of Rs. 25,00,000/-(Rs Twenty Five Lakhs Only) on M/s Chunghwa Picture Tubes, Malaysia, under Section 112(a) of the Customs Act, 1962 7.10 I impose a penalty of Rs. 10,00,000/-(Rs Twenty Five Lakhs Only) on M/s Chunghwa Picture Tubes, Malaysia, under Section 114(a) of the Customs Act, 1962 2.1. Acting upon a specific intelligence that Customs duty was being evaded by M/s. J. R. international (IEC 330600327 1), 4498-A/ 11, Jai Mata Market, Tri Nagar, Delhi (hereinafter referred to as M/s. J. R. International), a proprietorship firm of Shri Vinay Aggarwal, by way of mis-declaring the value and description of fabrics imported from China, a case was registered by the Directorate of Revenue Intelligence (DRI), Delhi Zonal Unit, B-3 & 4, 6th Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi (hereinafter referred to as 'DRJ'). After investigation, a Show Cause Notice No, 11/2013 dated 08.03.2013 was issued to M/s. J. R. International for import of Customs Appeal Nos.70616-70617 of 2017 4 various kinds of fabrics by resorting to mis-declaration of value and description 2.2 During the investigation of the aforementioned case, a search of the godown premises of M/s. J. R. International at Village Siraspur, New Delhi was conducted on 21.12.2010 by the DRI officers, wherein 72 crates each containing 60 numbers (total 4,320) of "colour picture tubes-tube type A34AGT14X36A(F)" were found. Upon enquiry by the DRI officers about the source of colour picture tubes (CPTs) and their related documents, Shri Kirpal Dutt, an employee of M/s. J.R. International who was present at the godown at the time of the search, informed that their consignor was M/s. Chunghwa Picture Tubes (M), Sdn. Bhd., Malaysia and consignee was M/s. J. R. International. Shri Kirpal Dutt, however, failed to produce any document to establish the licit import or procurement of the CPTs by M/s. J. R. International. Thus, on the reasonable belief that the said goods were relevant to their ongoing investigations, the DRI officers detained them under Panchnama and handed them over to Shri Kirpal Dutt under Supurdaginama dated 21.12.2010. The goods were subsequently seized on 18.05.2011 after admission of evasion of Anti-dumping duty by Shri Vinay Aggarwal in his statement dated 2102.2011.
2.3 It was also revealed that the detained CPTs were imported by one M/s. Vipula Exports, Noida after being purchased from M/s J. R International on High Seas Sales basis. Thereafter, a SCN No.11/2014 dated 01.04.20114 was issued to M/s. J.R Iternational & M/s. Vipula Exports, Noida by the Additional Director General, DRI, Delhi Zonal Unit, New Delhi for non- payment of Anti dumping duty leviable under Notification No. 50/2009-Customs dated 15.05.2009, which was effective from 24.07.2008, on the CPTs imported from M/s Chunghwa Pictures Tubes (M).
2.4 The essence of the case against the importer was that the imported CPTs were overvalued so as to escape the levy of Anti- dumping duty which leviable on import of CPTs from. M/s Customs Appeal Nos.70616-70617 of 2017 5 Chunghwa Picture Tubes (M) at a value below the minimum value indicated i.e USD 21.77 per piece - as specified in Anti- dumping Notification No. 50/2009-Customs dated 15.05.2009.
2.5 The aforementioned investigations into import of CPTs from M/s. Chunghwa Picture Tubes (M) without payment of Anti- dumping duty covered other importers as well. As a result, Show Cause Notices were issued to these other importers, as tabulated below- Table-1 S. Name of the Importer(M/s) Show Cause Notice No. No. & Date 1 Malhotra Electronics Pvt. Ltd. 11-C, Udyog Kendra, 21/2014 dated Greater NOIDA, UP 27.05.2014 2 Cortel India, I-17, lst Floor Sector-9, NOIDA, Uttar 25/2014 dated Pradesh -201301 09.06.2014 3 Bharti Electronics, I-17, 1st Floor, Sector -9, NOIDA, 26/2014 dated Uttar Pradesh-201301 11.06.2014 4 Beltek India Limited B-89 Sector-5, NOIDA, UP 28/2014 dated 11.06.2014 5 Dhruv International, 32/20, South Industrial Area, G.T. 29/2014 dated Road, Ghaziabad, UP 18.06.2014 6 Protonics Systems India Private, Limited, 0-45, Sector- 32/2014, dated 81 PHASE-II, NOIDA, 26.06.2014 7 Uttar Pradesh Anuj Trading Co., 180, Pratap Nagar, 47/2014 dated Mayur Vihar, Phase-I New Delhi 23.09.2014 8 Divya Electronics, 180, Pratap Nagar, Mayur Vihar, 47/2014 dated Phase-I, New Delhi 23.09.2014 9 Eastron Overseas Inc, 401, B 08, GDTIL Tower, Netaji 50/2014 dated Subhash Palace, Pitampura, New Delhi 20.11.2014 10 Sunrise Logistics, BG-125 Sanjay Gandhi Transport 50/2014 dated Nagar, GT Karnal Road, Delhi 20.11.2014 11 Dixon Technologies (India) Pvt. Ltd, B-14 & 15, Phase-II, 03/2015 dated Noida U.P 09.01.2015 12 P.G Electroplast Limited, Plot No. P-4/2 to 4/6, Site-B, 29/2015 dated UPSIDC Industrial Area Surajpur, Greater Noida, U.P 29.05.2015 2.6. Investigation & searches were conducted at the residential premises of Shri Sandeep Devgun, Proprietor of M/s. Eastron Overseas, Delhi, who was the main commission agent of M/s. Chunghwa Picture Tubes (M) and office premises of M/s. Eastron Overseas Inc., New Delhi on 22.02.2011. The searches led to Customs Appeal Nos.70616-70617 of 2017 6 recovery of certain incriminating documents and goods, which were detained vide Panchnamas dated 22.02.201 1.
2.7 Iinvestigation into evasion of Anti-dumping duty by overvaluing the CPTs imported from M/s. Chunghwa Picture Tubes (M) was initiated against Appellant (IEC-0508024200). The investigation has revealed that this firm had imported 14"
CPTs from M/s. Chunghwa Picture Tubes (M) in the year 2010 vide 04 Bills of Entry without payment of Anti-dumping duty. The declared unit price of the imported 14" CPTs was USD 20.25 per piece, as detailed below: - Table-2 S. No. Bill of Entry No. and Number of CPT Unit CF Price Declared (in date Imported USD) ICD, 2337637 dated 11,520 20.25 Dadri 18.11.2010 301611dated 9,216 20.25 01.12.2010 2414084 dated 11,520 20.25 09.12.2010 2414731 dated 9,216 20.25 09.12.2010 Total 41,472 2.8 A study of the contemporaneous imports of 14" CPTs from the same supplier as in the case of M/s. Dixon Appliances Pvt. Ltd. i.e. M/s. Chunghwa Picture Tubes (M) by other importers during the year 2009 indicated that identical CPTs were imported at a unit price in the range of USD 15.9 per piece to USD 16.2 per piece as per details below:
S. Bills of Entry No. Importer's Name No. of Unit Price Place of No and Date Pieces (FoB) (in Import imported USD) 1 762351 dt. Divya Electronics 2,304 16.2 ICD, 21.01. 09 Tuglakabad Delhi 2 777679 dt Dhruv 351 16.0 27.03. 09 International
3 780862 dt. Bharti 2304 15.9 08.04. 09 International 2.9 It was observed that the unit prices of the 14" CPTs imported by other firms from M/s. Chunghwa Picture Tubes (M) during the years 2007 and 2008 (prior to imposition of Anti-dumping duty Customs Appeal Nos.70616-70617 of 2017 7 w.e.f. 24.07.2008) ranged from USD 15.4 to USD 16.3, respectively as per the charts below:
Bill of Entry No. and Importer's No. of pieces Unit Price( in Date Name Imported USD) 746495 dated MIRC Electronic 4,608 16.0 (CF) 19.06.2007 803286 dated MIRC Electronic 11,520 15.6 (FoB) 19.06.2007 809198 dated MIRC Electronic 2,304 15.4 (FoB) 23.06.2007 626814 dated Airvision (India) 11,520 16.2 (CF) 06.09.2007 630153 dated Shree Exports 2,304 16.3 (CF) 17.09.2007 1001487 dated LG Electronics 2,304 15.1 (CF) 27.09.2007 698010 dated Divya 2,304 16.1 (FoB) 26.05.2008 Electronics 2.10 As per the investigation conducted, the actual price of the 14" CPTs supplied by M/s. Chunghwa Picture Tubes (M) was around USD 15.80 (CF) per piece in 2009-2010. Shri Vinay Aggarwal, proprietor of M/s. J. R. International, Delhi in his voluntary statement recorded under Section 108 of the Customs Act, 1962 clearly admitted that the actual price of 14" CPTs was USD 15.80 (CF) per piece. His email printouts sheets having details of contract between M/s. Chunghwa Picture Tubes and M/s. Tessuti (HK) Co Ltd and two debit notes both dated 25.11.2010 revealed that payment terms of 14" CPTs was on CF basis and that USD 15.80 was the correct CF price of 14" CPTs.
Shri Sandeep Devgun, the commission agent/ representative of M/s. Chunghwa Picture Tubes (M) In India in his voluntary statement recorded under Section 108 of the Customs Act, 1962 also clearly admitted that they later overvalued the price of CPTs to avoid attracting Anti- dumping duty. Shri Sandeep Devgun also disclosed the actual price of CPTs supplied by M/s. Chunghwa Picture Tubes (M) was USD 15.80 (CF) per piece.
2.11 The investigations revealed that a contract (E-mail printout s. no. 5A) was made between M/s. Chughwa Picture Tubes (M) and M/s. Tessuti (HK) Co. Ltd., Hong Kong, that the latter would sell M/s. Chunghwa's Picture Tubes (M) according to own availability by topping up the unit price from initial cost. M/s.
Customs Appeal Nos.70616-70617 of 2017 8 Chunghwa Picture Tubes (M) would pay commission to M/s. Tessuti (HK) Co. Ltd. on the basis of buying price settled between both parties. M/s. Chunghwa Picture Tubes (M) or its associated concerns would not supply goods to any of M/s. Tessuti's customer directly or indirectly and any customer introduced by M/s. Tessuti (HK) Co. Ltd. would not be directly or indirectly entertained by M/s. Chunghwa Picture Tubes (M). The two debit notes dated 25.11.2010 (E-mail printouts) issued by M/s. Tessuti (HK) Co. Ltd. to M/s. Chunghwa Picture Tubes (M) for USD 58,982 each with price of 14" CPTs on CF terms agreed to between M/s. Tessuti (HK) Co. Ltd. and M/s. Chunghwa Picture Tubes (E-mail printouts). Further, the contract states that M/s. 'Tessuti's customer will open LC in favour of M/s. Chunghwa Picture Tubes (M) at USD 19.00 and the excess amount of USD 3.20 would be paid to M/s. Tessuti as commission in their A/c. no. 636465650838 in HSBC Bank, Hong Kong.
2.12 Therefore, 14" CPTs with actual value of USD 15.80 (CF) per piece were over invoiced by M/s. Chunghwa Picture Tubes (M) to aid M/s, J.R. International in evading payment of Anti- dumping duty. The excess amount so gained by M/s. Chunghwa Picture Tubes (M) on account of overvaluation was transferred by them to M/s. Tessutj (HK), Hong Kong, whích used to export fabrics to M/s. J.R. international by under invoicing them. By this modus-operandi, M/s. Tessuti (HK) got back the differential payment from M/s. J.R. International for the under invoiced fabrics and the effective value of import of CPTs used to come down to USD 15.80 per piece. Both Shri Umesh Ghullar, Proprietor of M/s. Tessutj (HK) Co. Ltd., Hong Kong and Shri Vinay Aggarwal, Proprietor of M/s. J.R. International disclosed this modus-operandi of overvaluation in the import of 14" CPTs from M/s. Chunghwa Picture Tubes (M). These disclosures further enhance the veracity of the statements made by Shri Sandeep Devgun and Shri Vinay Aggarwal and confirm the overvaluation of the 14" CPTs imported by M/s Dixon Appliances Pvt. Ltd, with the objective of evading the payment of applicable Customs Appeal Nos.70616-70617 of 2017 9 Anti-dumping duty: It also confirms that the correct value of the said 14" CPTs was 15.80 (CF).
2.13 Sh. Sandeep Devgun, commission agent /representative of M/s. Chunghwa Picture Tubes (M) in India has also clearly admitted that the 14" CPTs were valued in the range of USD 15.80 per piece and the excess amount collected as per invoices was adjusted afterwards through him. s. Thus the invoices issued by M/s. Chunghwa Picture Tubes (M) in support of the price declared to the Customs at the time of import cannot be relied upon for determination of correct transaction values, and deserve to be rejected 2.14 Thus the declared value by the appellant was overvalued in respect of 14" CPTs imported from M/s. Chunghwa Picture Tubes (M) is the fact that other importers as above, had likewise overvalued the said item when imported from the same supplier to avoid the levy of Anti-dumping duty. The confirmatory statements of these other importers supported by statements of Shri Sandeep Devgun, commission agent of supplier, M/s. Chunghwa Picture Tubes (M) evidence the overvaluation.
2.15 Shri Sunil Vachani, Director of M/s. Dixon Appliances Pvt. Ltd. (Appellant 2) has stated that in the year 2010 the price of the imported 14" CPTs had increased due to a decrease in supply and an increase in demand. However, he failed to substantiate through documentary or other evidence his assertion that there was a reduced supply coupled with greater demand of 14' CPTs during the period. In fact, what had happened was that consequent to the imposition of Anti- dumping duty on 15.05.2009 the importers had deliberately overvalued the imports so as to evade the levy. This fact has been admitted by the importers as above.
2.16 Thus appellant had imported the goods in question by willfully mis-declaring the transaction values, with intent to evade the payment of Antidumping duty. It also appears that incorrect declarations, manipulated documents including inflated invoices were filed before Customs authorities at the time of Customs Appeal Nos.70616-70617 of 2017 10 import. Thus appellant willfully and knowingly suppressed the true facts from the Customs authorities and misled them time and again. For these acts of omission and commission the imported goods became liable for confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962, and Appellant liable to penalty under Section 112 and 114AA ibid.
2.17 Appellant 2 was directly & personally involved in the importation of the imported 14" CPTs from M/s. Chunghwa Picture Tubes (M) and the willful mis-declaration of the true transaction values, with the intent to evade the payment of Anti-dumping duty. He deliberately made incorrect statements and declarations and filed manipulated documents including inflated invoices before the Customs authorities at the time of import with the objective of evading the payment of Anti- dumping duty. Thus he also was liable to penalty under Section 112 and Section 114AA of the Customs Act, 1962.
2.18 M/s. Chunghwa Picture Tubes (M), Sdn. Bhd., Malaysia, colluded with Appellant 1 and Appellant 2 to supply 14" CPTs at an inflated value so as to avoid attracting Anti-dumping duty on their import Thus, he rendered himself liable for penalty under Sections 112 and 114 AA of the Customs Act, 1962.
2.19 A Show Cause Notice dated 16.11.2015 was issued to the appellants asking them to show as to why:-
(i) The declared assessable value amounting to Rs.
3,88,85,002/- (Three Crore Eighty Eight Lakhs Eighty Five Thousand Two Only) for the 14" CPTs @ 20.25 (CP) imported by them in the year2010 vide Bills of Entry as detailed in Annexure ' A should not be rejected in terms of provisions of Section 14 of the Customs Act, 1962 read with Rule 12 of the Customs (Determination of Value of Imported Goods) Rules, 2007, and the same should not be re-determined as Rs, 3,01,84,610/- (Three Crore One lakh Eighty Four Thousand Six Hundred Ten only) @ 15.80 (CF) in terms of Section 14 of the Customs Act, 1962 read with Rule 4 of the Rules ibid;
Customs Appeal Nos.70616-70617 of 2017 11
(ii) Anti-dumping duty amounting to Rs. 89,04,373/- (Eighty Nine Lakhs Four Thousand Three Hundred Seventy Three Only) leviable under Notification No. 50/2009-Customs dated 15.05.2009 on imports of subject goods mentioned in clause (a) above, which was evaded/ not-paid by them at the time of imports, as detailed in Annexure A to this Show Cause Notice, should not be demanded and recovered from them, under provisions of erstwhile Section 28(1) read with Section 28(4) of the Customs Act, 1962, as applicable to cases of non-levy/ short-levy of Customs Duty prior to 08.04.2011 vide Explanation 2 to the present Section 28 of the Customs Act, 1962, read with Section 9A(8) of the Customs Tariff Act, 1985;
(iii) Interest at the applicable rate on the aforesaid Anti-
dumping duty evaded/not paid, mentioned in clause (3.1.2) above should not be demanded and recovered from them under the provisions of erstwhile Section 28AJ3/present Scction 28AA, as applicable, of the Customs Act, 1962; 3.1.4 The goods, mentioned in clause (3.1.1) above should not be held liable to confiscation under Sections 111(d) and 111(m) of the Customs Act, 1962; 3.1.5 Penalty should not be imposed upon them under Sections 112, 114A and i I4AA of the Customs Act, 1962.
(iv) Shri Sunil Vachani, Director of M/s. Dixon Appliances Pvt.
Ltd. to explain as to why penalty should not be imposed upon him under Sections 112 and 114AA of the Customs Act, 1962.
(v) M/s. Chunghwa Picture Tubes (M), Sdn. Bhd., Malaysia to explain as to why penalty should not be imposed upon them under Sections 112 and 114AA of the Customs Act, 1962.
2.20 Show cause notice has been adjudicated as per the impugned order referred in para 1 above. Aggrieved appellants have filed these appeals.
Customs Appeal Nos.70616-70617 of 2017 12 3.1 We have heard Shri Atul Gupta Advocate for the appellants and shri A K Choudhary, Authorized Representative for the revenue.
3.2 Learned counsel submits that:
The allegation of over- valuation cannot be raised and confirmed in absence of any shred of evidence against the appellant The submission of the Appellant, which was substantiated with the Purchase Order received from the Tamil Nadu Government through Electronics Corporation of Tamil Nadu (ELCOT), was discredited in the impugned order Reliance is placed on the following decisions:
o South India Television (P) Ltd.,[2007 (214) ELT 3 (SC)] o P.G. Electroplast Ltd. [2020 (373) ELT 415 (Tri. All.)] o Malhotra Electronics Pvt. Ltd. [Final Order Nos.
71915- . 71916/2019] o Bard Exports [2018 (363) E.L.T. 903 (Tri. - Mumbai)] o Akshay Exports & Inds. [2003 (156) ELT 268 (Tri- Kolkata)] o Jeen Bhavani International [(2023) 6 Centax 11 (Tri.- Bom)] affirmed in 2023 (385) ELT 338 (SC) . o Impex Steel & Bearing Co. [2014 (302) ELT 464] o BBS Pens (India) Pvt Ltd.[2002 (142) ELT 435 (Tri.- Bang)] o H.T.Company [2007 (208) ELT 507 (Tri. Bang)] o Xpress Computers [2008 (225) ELT 78 (Tri.- Chennai)] 3.3 Learned Authorized Representative reiterates the findings recorded in the impugned order 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments 4.2 We find that in respect of the same investigations whereby the show cause notice was issued to M/s P G Electrplast Ltd. (Sl Customs Appeal Nos.70616-70617 of 2017 13 No 12 in para 2.5 above) we find that the demand has been set aside observing as follows:
2. Brief facts of the case are that the appellants imported 14 inch colour picture tubes from M/s. Chunghwa, Malaysia.
During the period from May 2010 to January 2011, appellant imported various consignment of 14 inches colour picture tube and filed 70 Bills of Entry. The price of each colour picture tube was US $ 20.20 on CNF basis and the payments were made through Bank LCs. The goods were assessed for Customs duty and on payment of Customs duty the goods were cleared during the period from May 2010 to January 2011. Directorate of Revenue Intelligence detected a case of evasion of Anti-dumping duty by a firm namely M/s. J.R. International related to import of colour picture tubes from M/s. Chunghwa Picture Tubes, Malaysia. Through Notification No. 50/2009-Cus., dated 15 May, 2009 w.e.f. 24 July, 2008 Anti-dumping duty was imposed on import of colour picture tubes from M/s. Chunghwa Picture Tubes, Malaysia. The specified landed value for 14 inch colour picture tube in the said Notification No. 50/2009-Cus. was US $ 21.77 per piece. If the landed value of imported 14 inch colour picture tube imported from M/s. Chunghwa Picture Tubes, Malaysia was more than US $ 21.77 per piece then Anti-dumping duty on the same was not leviable. However if the landed value of such goods was less than US $ 21.77 per piece then Anti-dumping duty was leviable. Therefore, Directorate of Revenue Intelligence carried out investigations in respect of various importers who imported colour picture tubes from M/s. Chunghwa Picture Tubes, Malaysia. Accordingly, they carried out investigations in respect of the present appellant.
3. On 8 March, 2011 Directorate of Revenue Intelligence carried out searches at the factory premises of appellant as well as at residential premises of CMD of the appellant company and seized a number of documents as well as Customs Appeal Nos.70616-70617 of 2017 14 electronic devices. During the course of investigation five statements of Shri Vishal Gupta S/o Shri Pramod Gupta and Director of the appellant company was recorded on 8 March, 2011, 9 March, 2011, 7 April, 2011, 19 September, 2011 & 5 October, 2012 were recorded. Shri Vishal Gupta deposed that they imported 14 inches colour picture tubes from M/s. Chunghwa Picture Tubes, Malaysia at US $ 20.20 on CNF basis per peace and the period of payment ranged between three to five months. He has also stated that overvaluation in the invoices was done by M/s. Chunghwa Picture Tubes, Malaysia on their instructions to avoid payment of Anti- dumping. On the basis of information in respect of total quantity of 14 inches colour picture tubes imported by appellant a show cause notice dated 29 May, 2015 was issued by invoking extended period of limitation by raising a demand by invoking extended period of limitation under Section 28 of the Customs Act, 1962 for recovery of Anti- dumping duty amounting to Rs. 7.38 crore in terms of said Notification No. 50/2009-Cus. It was alleged that there was suppression of facts by the appellant. Further it was stated in the said show cause notice that one M/s. J.R. International were importing fabric and undervalued the same for evasion of customs duty and the difference between the actual price and price indicated in invoice was received by overseas M/s. Tessuti (HK) Co. Ltd., Hong Kong through hawala channel and such payments were made to M/s. Tessuti (HK) Co. Ltd. by M/s. Chunghwa, Malaysia, from whom M/s. J.R. International imported colour picture tubes by overvaluing to avoid imposition of anti-dumping duty. It was stated by proprietor of M/s. Tessuti (HK) Co. Ltd., Hong Kong that M/s. Tessuti (HK) Co. Ltd., Hong Kong had entered into an agreement with M/s. Chunghwa, Malaysia wherein M/s. Chunghwa, Malaysia was to pay commission at the rate of US $ 3.40/piece of colour picture tube to M/s. Tessuti (HK) Co. Ltd., Honk Kong by raising a debit note in favour of M/s. Chunghwa, Malaysia on the Customs Appeal Nos.70616-70617 of 2017 15 basis of said investigation. The basis of allegation in the said show cause notice as recorded at Paras 8.7 & 8.8 are reproduced below :-
8.7. From the admissions made by Shri Vishal Gupta, Director of M/s. P.G. Electroplast in his voluntary statements recorded under Section 108 of the Customs Act, 1962 that M/s. P.G. Electroplast overvalued the price of CPTs to avoid payment of anti-dumping duty. The differential amount was adjusted by various means including debit notes, opening of LCs of longer period of upto 120 days, etc. From the statements recorded during investigations, it is evident that the actual price of 14" CPT imported from M/s. Chunghwa Picture Tubes, Malaysia can be taken as US $ 15.8. The modus operandi of overvaluation in the import of 14" CPTs has also been revealed by the statements of Shri Vishal Gupta and others.
The statements recorded under Section 108 of the Customs Act, 1962 are admissible in the proceedings under the Customs Act, 1962. The fact of overvaluation have been further and independently corroborated by the statements of Shri Sandeep Devgun, commission agent/representative of M/s. Chunghwa Picture Tubes, Malaysia wherein he (i.e. Shri Devgun) also disclosed the actual price of CPTs supplied by M/s. Chungwa Picture Tubes, Malaysia. The disclosures made by Shri Umesh Gulhar, Proprietor of M/s. Tessuti (HK) Co. Ltd., Hong Kong about the arrangement amongst M/s. Chunghwa Picture Tubes, Malaysia, M/s. Tessuti (HK) Co. Ltd., Hong Kong and M/s. J.R. International, Delhi further enhances the veracity of the statements made by the importer.
8.8 From the foregoing facts, it appears that the values of the 14" CPTs imported and cleared by M/s. P.G. Electroplast declared in the 70 bills of entry (details in Annexures-„A‟) at the time of import into India, were not the correct transaction values and the same cannot be accepted and Customs Appeal Nos.70616-70617 of 2017 16 appear liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962. The declared values cannot be treated as genuine, as admissible have been made by Shri Vishal Gupta and other, about the correct value of 14" CPTs and how the same was inflated by adopting ingenious means to avoid payment of anti-dumping duty. The facts of overvaluation of CPTs imported from M/s. Chunghwa Picture Tubes, Malaysia have been further corroborated by statements of Shri Sandeep Devgun, representative/commission agent of M/s. Chunghwa Picture Tubes, Malaysia in India and Shri Vinay Agarwal & Shri Umesh Gulhar. Declared values are acceptable only if they are the sole consideration for sale and correctly reflective and price payable.
4. Appellant had sought for cross-examination of persons on whose statement reliance was placed in the said show cause notice. The same was denied by learned Original Authority. The appellant contended before the Original Authority that their case of import had nothing to do with evasion of anti-dumping duty by M/s. J.R. International and that modus operandi adopted by M/s. J.R. International has no relevance in case of import by the appellant and that the imports by M/s. J.R. International were made in the year 2009 and the previous period whereas the imports made by the appellant were from May 2010 onwards and Anti- dumping duty was imposed w.e.f. 24 July, 2008. It was contended before the Original Authority that appellant imported best quality picture tube available for the overseas market and allegation of overvaluation in the import coloured picture tube from M/s. Chunghwa, Malaysia were leveled without having produced any evidence of contemporaneous price of similar or identical goods and therefore, whole basis of rejection of transaction value at the threshold was bad in law and unsustainable. They further contended that no evidence existed for any Customs Appeal Nos.70616-70617 of 2017 17 incriminating evidence for total amount of over invoiced amount from any source and no incrimination documents were recovered during the search of the premises and no other documents relating to any elicit receipt was recovered during the course of search. They further contended that the statement on the basis of which allegation of overvaluation stand made have not been corroborated by any fact or any other evidence. They further contended that it is settled position of law that statement is not sufficient to reject transaction value. The said show cause notice was adjudicated through impugned Order-in-Original through which the Original Authority rejected the assessable value declared in the 70 Bills of Entry and under Rule 12 of Customs (Determination of Value of Imported Goods) Rules, 2007 reduced the value from around Rs. 34.30 crore to around Rs. 27.01 crore and confiscated the goods and gave an option to redeem the same on payment of redemption fine of Rs. 5 crore. Further he confirmed anti-dumping duty amounting to Rs. 7,38,54,123/- under the provisions of Section 28 of Customs Act, 1962 and ordered to pay the same and imposed equal penalty. Further he imposed penalty of Rs. 1 crore on the other appellant. Aggrieved by the said order both the appellants are before this Tribunal.
5. We have heard Learned Advocate Shri K.K. Aanand appearing on behalf of both the appellants. He has submitted that the goods imported during the relevant time from May 2010 to January 2011 through 70 Bills of Entry were assessed to duty and assessing officers did not find a case to impose anti-dumping duty in view of the fact that landed value was more than the threshold value required for the imposition of Anti-dumping duty. The assessments were finalized as long back as May 2010 to January 2011 and Revenue had not filed any appeal against the said assessment and after completing of appeal period assessment became final and therefore reassessment by way of present proceedings was not available to Revenue Customs Appeal Nos.70616-70617 of 2017 18 and they have relied on ruling by Hon‟ble Supreme Court in the case of M/s. Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) reported at 2004 (172) E.L.T. 145 (S.C.). They have further submitted that all the information required for assessment was submitted during the relevant period from May, 2010 to January 2011 and therefore the allegation of suppression leveled on 29 May, 2015 are not sustainable. Further the entire demand in the show cause notice is beyond the normal period of limitation and in the absence of any suppression extended period is not invokable and since the entire demand is for extended period the demand is not sustainable. He has further submitted that during the investigation no evidence has come to notice that there was any arrangement of overvalued differential amount to be flow back to the importer. The allegation in show cause notice was for overvaluation and show cause notice made a reference to an agreement between M/s. Tessuti (HK) Co. Ltd. Hong Kong and M/s. Chunghwa, Malaysia for issue of debit note in the case of M/s. J.R. International whereas no such evidence was found in respect of present appellant. He has submitted that the entire show cause notice is based on statements of Shri Vishal Gupta recorded over a period of time from 8 March, 2011 to 5 October, 2012 and in reply to show cause notice all the said statement were denied by the appellant. He has further relied on ruling by Hon‟ble Supreme Court in the case of C.C.E. & S.T., Noida v. Sanjivani Non-Ferrous Trading Pvt. Ltd. reported at 2019 (365) E.L.T. 3 (S.C.) and submitted that as held by Hon‟ble Supreme Court that Adjudicating Authority is bound to accept price actually paid as transaction value and submitted that without any evidence the transaction value has been rejected by resorting to Rule 12 of said valuation Rules, 2007 whereas the said Rules require to proceed sequentially and no such exercise was done.
Customs Appeal Nos.70616-70617 of 2017 19
6. Heard Shri Gyanendra Kumar Tripathi Learned Deputy Commissioner on behalf of the Revenue he has retreated the findings of the Original Authority.
7. We have carefully gone through the record of the case and submissions made by both the sides. From the perusal of the impugned Order-in-Original, we note that Original Authority has denied cross-examination of the persons whose statements were relied upon for issuance of said show cause notice dated 29 May, 2015. Further we note that at Para 7.3.18 the Learned Original Authority has held that the most clinching part of the investigation is the admission made by Shri Vishal Gupta, Director of M/s. P.G. Electroplast in his voluntary statements recorded under Section 108 of the Customs Act, 1962 that M/s. P.G. Electroplast, overvalued the price of colour picture tubes to avoid payment of Anti-dumping duty. From the said part of the impugned order we note that Revenue did not have any evidence to corroborate with the voluntary statements. We note that it is settled principle of law that the assessment of Bill of Entry is an adjudication order and if within the period provided under Customs act appeal before Jurisdictional Commissioner (Appeals) is not filed then the assessment becomes final and such final assessment cannot be reopened. In the present case the assessment were made during the period from May 2010 to January 2011 and after the appeal period of around three months were over the said assessment became final and therefore through the said show cause notice dated 29 May, 2015 the said assessments were not open for reassessment. Further we note that the assessment were finalized during May 2010 to January 2011 and all the information required for assessment was provided by the appellant and therefore the allegation of suppression of fact made on 29 May, 2015 are not sustainable. Therefore, the proceedings are hit by limitation. We therefore hold that the impugned order is neither sustainable on merits nor sustainable on point of Customs Appeal Nos.70616-70617 of 2017 20 limitation. We, therefore, set aside the impugned order and allow both the appeals.
4.3 Similarly in case of Malhotra Electronics Pvt Ltd. (Sl No 1 of table in para 2.5) the demand and penalties imposed were set aside by the Final Order No 71915-71916/2019 dated 26.11.2019 by following the order referred in para 4.2 above.
4.4 Further we do not find the manner in which the transaction value has been rejected and presumptive value adopted on the basis of imports of similar goods during the period 2007-08 and 2009 can stand the test prescribed by the Hon'ble Supreme Court in case South India Television (P) Ltd. referred to by the appellant counsel during the course of arguments. In the said decision Hon'ble Supreme Court observed:
"6. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Section 2(41), "value" is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. The Customs Valuation Rules, 1988 have been framed only in respect of imported goods. There are no rules governing the valuation of export goods. That must be done based on Section 14 itself. In the present case, the Department has charged the respondent-importer alleging mis-declaration regarding the price. There is no allegation of mis-declaration in the context of the description of the goods. In the present case, the allegation is of under-invoicing. The charge of under- invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared in the Bill of Entry is the Customs Appeal Nos.70616-70617 of 2017 21 value referred to above and not merely the invoice price. On a plain reading of Section 14(1) and Section 14(1A), it envisages that the value of any goods chargeable to ad valorem duty has to be deemed price as referred to in Section 14(1). Therefore, determination of such price has to be in accordance with the relevant rules and subject to the provisions of Section 14(1). It is made clear that Section 14(1) and Section 14(1A) are not mutually exclusive. Therefore, the transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e., at the time when the goods reaches the customs barrier. Therefore, the invoice price is not sacrosanct. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Under-valuation has to be proved. If the charge of under-
Customs Appeal Nos.70616-70617 of 2017 22 valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries, collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving under- valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts‟ proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of under-valuation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore, the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion.
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 Customs Appeal Nos.70616-70617 of 2017 23 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 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 Customs Appeal Nos.70616-70617 of 2017 24 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.
8. Before concluding, we may point out that in the present case at the stage of show cause notice, the Department invoked Rule 8 on the ground that the invoice submitted by the importer was incorrect. In Eicher Tractors (supra) this Court observed that Rule 4(1) of the Customs Valuation Rules refers to the transaction value. Utilization of the word „the‟ as definite article indicated that what should be accepted as the transaction value for the purpose of assessment under the Customs Act is the price actually paid by the importer for the particular transaction, unless it is unacceptable for the reasons set out in Rule 4(2). In the said judgment, it has been further held that, the word „payable‟ in Rule 4(1) also refers to the "transaction value"
and payability in respect of the transaction envisaged a situation where payment of price stood deferred. Therefore, this decision of the Supreme Court directs the Revenue to decide the validity of the particular value instead of rejecting the transaction value. We wish, however, to clarify that it is still open to the Department based on evidence, to show that the declared price is not the price at which like goods are sold or offered for sale ordinarily, which words occur in Section 14(1). Lastly, it is important to note that in the above decision of this Court in Eicher Tractors (supra) this Court has held that the Department has to proceed sequentially under Rules 5, 6 onwards and it is not open to the Department to invoke Rule 8 without sequentially complying with Rules 5, 6 and 7 even in cases where the transaction value is to be rejected under Rule 4. In the present case, the show cause notice indicates that the Department had invoked Rule 8 without complying with the earlier rules."
Customs Appeal Nos.70616-70617 of 2017 25 4.5 Thus we do not find any merits in the impugned order to the extent it is in respect of appellants before us.
5.1 Appeals are allowed.
(Operative part of the order pronounced in open court) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp