Custom, Excise & Service Tax Tribunal
Technologies vs C.C., Jodhpur on 28 August, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066.
Date of Hearing 28.08.2015
For Approval &Signature :
Honble Mr. R.K. Singh, Member (Technical)
Honble Ms. Sulekha Beevi C.S., Member (Judicial)
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/602/2010-CU[DB]
[Arising out of Order-in-Original No.03/2010, dated 07.07.2010 passed by the C.C., Jodhpur]
M/s. Advanced Scan Support
Technologies Appellant
Vs.
C.C., Jodhpur Respondent
Appearance Mr. Reena Rawat, Advocate - for the appellant Mr. BB Sharma, DR - for the respondent CORAM: Honble Mr. R.K. Singh, Member (Technical) Honble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No.52929/2015, dated 28.08.2015 Per Mr. R.K. Singh :
Appeal has been filed against Order-in-Original dated 07.07.2010. The brief facts of the case are that the appellant imported two CT scanner machines vide Invoice No.326 dated 22.03.2010 with the following description:-
Sl.
No. Description Value (US$)
1.
Used and Old GE DXI CT Scanner Machine (Model 2003) 31,000
2. Used and Old GE DXI CT Scanner Machine (Model 2001) 29,000 Total 60,000 The appellant submitted a Chartered Engineers certificate dated 15.03.2010 issued by Mr. Hirose Akira, Japan, according to which the machine manufactured in 2001 was valued at US$ 29,000 and another one manufactured in 2003 was valued at US$ 31,000, which were the values declared by the appellant. The appellant also submitted another inspection report issued by Mr. Ramesh C. Agarwal, Chartered Engineer, Jaipur, who estimated the value of the two machines at US$ 66,000. Revenue obtained the information from the website of Dotmed, which indicated US$ 1,15,000 as the value of GE High Speed DXI CT Scanner of good condition manufactured in 2001. As this value was far higher than that declared, Revenue got the goods examined by Mr. IPS Arora, Chartered Engineer at ICD, CONCOR, Kanakpura, Jaipur, who after examining the machines adopted the value which was US$ 72,000 (average of US$ 29,000 and US$ 1,15,000) for the CT scanner of 2001 model. Similarly, value for the 2003 model was given as US$ 78,750. Revenue adopted these values by citing Rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
2. The appellant submitted a letter stating that it accepts the value proposed by Revenue as detention and demurrage charges were adding up and added that neither it wanted any Show Cause Notice to be issued nor it wanted any personal hearing. Accordingly, the Commissioner passed the order assessing the value at Rs.70,03,969/- as against 27,51,551/- declared by the appellant. In addition he also confiscated the goods and allowed redemption on payment of redemption fine of Rs.1,50,000/-. He also imposed penalty of Rs.1,50,000/-.
3. The appellant has contended that (i) there was no mis-declaration and it had only acceded to the valuation to avoid further detention and demurrage charges and delay. (ii) The Chartered Engineer certificate suggesting the value which was accepted by Revenue was obtained at the back of the appellant. (iii) The principles of natural justice were violated as the Chartered Engineers certificate was relied upon without offering it opportunity to cross-examine the Chartered Engineer. (iv) The declared value should be accepted and there was no ground available to reject the same. It cited the Supreme Court judgement in the case of Eicher Tractors Vs. Union of India [2000 (122) ELT 321 SC] in support of the said proposition adding that that judgement has been followed by CESTAT like in the case of Metplast IndiaVs. CC, Nhava Sheva [2004 (173) ELT 59 (Tri.-Mum)]. (v) Onus was on Revenue to prove the under-valuation, which has not been discharged. (vi) The website relied upon by the Commissioner is an auction website and the value was often changing. (vii) It was not a case for confiscation or imposition of penalty as there was no mala fide or mis-declaration. The appellant cited CESTAT judgement in the case of M/s. Handtex Vs. CC, Raigad [2008 (226) ELT 665 (Tri.-Del.)].
4. Ld. Departmental Representative, on the other hand, supported the impugned order.
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 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 re-assessment of value in the absence of goods will not be possible. The case of Eicher Tractors Vs. 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.
6. We find that the CESTATs judgement in the case of Vikas Spinners Vs. CC, Lucknow [2001 (128) 143 (TRI Del],CESTAT, dealing with a similar situation, held 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 estopped 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 loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly. (emphasis added) Similarly, in the case of Guardian Plasticote Ltd. Vs. CC (Port), Kolkotta [2008 (223) ELT 605 (Tri. Kol.)] CESTAT has held as under:-
4. The learned Advocate also cites the decision of the Tribunal in the case of M/s. Vikas Spinners v. C.C., Lucknow - 2001 (128) E.L.T. 143 (Tri.-Del.) 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 estopped 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. Thus, the valuation has to be upheld in the present case.
7. However, it is a fact that nothing has been brought out in the impugned order which shows that the appellant mis-declared the goods or declared a value which was different from the amount which was actually paid to the suppliers. Appellant even submitted a Chartered Engineer certificate from Japan in support of the valuation. It has also to be noted that although it gave consent to the valuation and gave up its right for show cause notice or personal hearing the fact remains that it was so done to avoid delay in clearance and accumulation of demurrage charges. Thus, it is simply a case of valuation dispute devoid of any mens rea on the part of the appellant. Consequently, it is a case for demand of differential duty on account of valuation rather than a case warranting confiscation and/or penalty. As has been held by Supreme Court in the case of Handtex Vs. CC, Raigad (supra) every change made by the assessing officer during the course of assessment whether relating to rate of duty or value need not lead to an inference of mis-declaration by the importer.
8. It is also pertinent to note that the appellant never consented for confiscation and penalty and did not forego its right for a show cause notice/personal hearing with regard thereto. Therefore, confiscation and penalty have to be held to have been ordered in violation of the principles of natural justice and for that reason also they cannot be sustained.
9. In the light of the analysis above, the appeal is partially allowed only to the extent that the confiscation/redemption fine and penalty are set aside (but the valuation is upheld).
(R.K. Singh) Member (Technical) (Sulekha Beevi CS) Member (Judicial) SSK -10-