Custom, Excise & Service Tax Tribunal
Manish Goel vs New Delhi(Icd Tkd) on 17 May, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. II
Customs Appeal No. 50398 of 2019
(Arising out of Order-in-Appeal No. CC(A)/CUS/D-II/ICD/TKD/Import/3031-
3032/2018 dated 30.11.2018 passed by the Commissioner of Customs
(Appeals), New Customs House, New Delhi)
Mr. Manish Goel Appellant
Karta of M/s Neena International
J-182, Basement
Sector-2 Bawana Industrial Area,
New Delhi-110039
Versus
Additional Commissioner of Customs Respondent
ICD, TKD, Import, New Delhi And Customs Appeal No. 50399 of 2019 (Arising out of Order-in-Appeal No. CC(A)/CUS/D-II/ICD/TKD/Import/3031-
3032/2018 dated 30.11.2018 passed by the Commissioner of Customs
(Appeals), New Customs House, New Delhi)
Neena International Appellant
J-182, Basement
Sector-2 Bawana Industrial Area,
New Delhi-110039.
Versus
Additional Commissioner of Customs Respondent
ICD, TKD, Import, New Delhi
Appearance:
Shri Navneet Panwar, Advocate - for the appellant
Shri Vivek Pandey, DR - for the respondent
Date of Hearing: 24.04.2019
Date of Decision: 17.05.2019
CORAM:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. BIJAY KUMAR, MEMBER (TECHNICAL) Final Order No. 50697-50698/2019 2 C/50398-50399/19 Per Bijay Kumar :
These two appeals have been filed by the appellants against a common Order-in- Appeal dated 30.11.2018 (for short, impugned order), wherein the Commissioner (Appeals) has modified the order of lower adjudicating authority, being Order-in-Original No. 51/2018 dated 05/2018.
2. The brief facts of the case are that M/s Neena International (for short, main appellant) has filed Bill of Entry No. 3627826 dated 16.10.2017 (for short, the said B/E) in respect of Container No. TGBU5349304 (for short, the Container). This Bill of Entry was filed for the clearance of consignment contained in the said container through their Custom broker, M/s Him Logistics Private Limited. The importer has imported Misc. items like plastic folders, PS Digital Analogue printing plates (CTCP) frying pan etc. In the said B/E the main appellant has declared the value of the imported consignment at Rs. 37,10.497/- and self assessed Customs duty of Rs. 10,82,621/-. The consignment was ordered, by the proper officer, for 10% examination as per guidelines issued by the Department. During the examination by the Customs officer on 2.10.2017, it was found that the goods imported were mis-declared in respect of description/quantity/value of the goods inasmuch as as the initial declaration was made for import of unbranded goods but in examination were found to be the branded goods. The goods were, thereafter, examined 100% by the officer of SIIB on 25.10.2015 in presence of Shri Umesh Sharma, representative of CHA and weighment of consignment was also done. On weighment 3 C/50398-50399/19 the weight was found to be 25380 Kgs. as against the declared weight of 25340 Kg. From the examination, it appeared that the appellant has imported branded goods in regard to frying pans, pizza pan, baskets. During the investigation, statement of Shri Manish Goel, (co-noticee) and Shri Inderjeet, Accounts Officer and Authorized Representative of the importer, were recorded under Section 108 of Customs Act, 1962 (for short referred to as Customs Act). After the investigation and from the statements recorded from aforestated persons, it was found that the importer has submitted three different invoice for the clearance of the imported consignments imported vide said B/E. The first invoice being No. AS 1109 dated 11 September, 2017 showed the total C&F value of the imported consignment as USD 4816.38. This was invoice which was enclosed along with the bill of Entry. Subsequently, another invoice was retrieved from the computer of the appellant with the same number and date but the total C&F value was 65175.28. The Department produced another invoice of the same date which was at C&F value USD 129573.28. The source of this invoice retrieved by the Department is not known but the same was used for the purpose of re-assessment.
2.1 The samples were also drawn by the Customs officer and same were put to market enquiry for ascertaining the price of the goods. The market enquiry was conducted on 10.11.2007 in presence of Shri inderjeet for redetermination of value of imported goods viz. Frying pan, Frying Pan (Bowl Shaped) and Pizza Pan of Sri and Sam brand. During the market survey unit price of the goods could not be ascertained due to non-availability of identical 4 C/50398-50399/19 or similar goods in India. The sample of "PS Digital analogue Printing Plates (CTCP)" were sent for testing of composition and nature to M/s Don Bosco Technical Institute which in its report vide letter dated 24.11.2017 found that the goods imported were as per the declaration. During the investigation summons were also issued to M/s Jagdamba Cutlery Pvt. Ltd. for tendering their statement as they were the person who had placed the order on the appellant for supply of these goods. During the investigation M/s Jagdamba International produced invoice No. NI/GST-068 dated 9.10.2017 in which the following purchase price were indicated :
Frying Pan - Rs. 150
Frying Pan (bowl shape - Rs. 200
Pizza Pan - Rs. 250 (with IGST extra)
After purchasing the product from the appellant, the goods were packed in corrugated box under the name of "Shri & Sam" which is registered name of Shri Pawan Kansal; the MRP was fixed by the Company after packing the product. The appellant expressed their inability to recollect the MRP of these goods.
2.2 In his statement, Shri Manish Goel, other co-noticee appeared before the Investigating officer and submitted that he would be producing the manufacturer invoice of Frying Pan and Pizza Pan of brand "Shri & Sam" along with copy of agreement/contract/purchase order etc. to justify the value declared in the Bill of entry with price negotiation. In his statement, Shri Manish Goel, further submitted that at the time of 5 C/50398-50399/19 clearance of Bill of entry, he submitted the first invoice for the import of consignment at USD 48,016.38 received from M/s Asian Ethics Ltd., Hong Kong, who had exported the consignment to the appellant. Subsequently, he also agreed to the fact that another invoice was obtained from his E. Mail having the same number and date which indicated the price of imported consignment at USD 75,175.28. It was submitted by him that this consignment was obtained by him from the supplier who has pooled the goods from various other manufacturers in China. He also submitted that another third invoice by the Departmental officer also having with the same number and date i.e. AS-1109 11 September, 2017 which mentioned price of imported consignment at USD 129573.28, was shown to him by the departmental office. Although, he did not agree and was also not made aware of the fact that from where this invoice has been obtained by the Investigating Officer, however, agreed to the price reflected in that invoice in view of consignment getting held up at the ICD which were incurring heavy demurrage. In fact, Shri Manish Goel, has endorsed the invoice which is as under : "I have seen this invoice but do not agree with the contents mentioned in this invoice. Further, I agree to pay the duty on the value of this invoice to avoid the demurrage charges and early release of the goods."
2.3 In view of above, the consignment was assessed at the value declared on the third invoice vide the order-in-original No. 51/2018 at the strength of oral Show Cause Notice dated 23.4.2018. In the said order the adjudicating authority passed the following order:
"(i) I reject transaction value declared in the Bill of Entry No. 3627826 dated 16.10.2017 on the basis of the fraudulent or 6 C/50398-50399/19 manipulated Commercial Invoice under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962.
(ii) I order for acceptance of True transaction value amounting to USD 1,29,573/- or Rs. 85,45,358/- in respect of goods covered under said Bill of Entry, as per Original/True Commercial Invoice as true transaction value (C&F) under Rule
3 of CVR, 2007 read Section 14(1) of the Customs Act, 1962, subject to adjustments of proviso to Rule 10(2)(b) of said Rules. I order for re-assessment of the impugned Goods covered under Bill of Entry No. 3627826 dated 16.10.2017 under Section 17(4) of the Act ibid with consequential duty and interest, if any.
(iii) I confirm total duty liability of impugned goods covered under Bill of Entry No. 3627826 dated 16.10.2017`as Rs. 24,49,613/- under Section 12 of the Customs Act, 1962 and Section 3 of the Customs Tariff Act, 1975. Since the importer has already paid the self-assessed duty of Rs. 10,82,621/-, I confirm the differential duty of Rs. 13,66,992 (Rupees Thirteen Lacs Sixty Six Thousand Nine Hundred and Ninety Two only) and same should be paid by the importer along with interest, if any, before the clearance of goods under Section 47 of the Act ibid.
(iv) I order for confiscation of Goods covered under said Bill of Entry having true assessable value of Rs.86,41,493/- under Section 111(l) and 111(m) of the Act ibid and packages of said goods under Section 118 of the Act, ibid. However, I give an option to M/s Neena International having IEC No. 0514040726 to redeem the goods on payment fine of Rs. 20,00,000/- (Rupees Twenty Lacs only) under Section 125 of Customs Act, 1962.
(v) I impose penalty of Rs. 1,36,699/- (Rupees One Lacs Thirty Six Thousand Six Hundred and Ninety Nine only) under Section 112(a)(ii) of the Customs Act, 1962 on the importer, M/s Neena International having IEC No. 0514040726.
(vi) I impose penalty of Rs. 1,72,82,986/- (Rupees One Crore Seventy Two Lacs Eighty Two Thousand Nine Hundred and Eighty Six only) under Section 114AA of the Customs Act, 1962 on Shri Manish Goel, Karta M/s Neena International (IEC No. 0514040726), J-182, Basement, Sector-2, Bawana Industrial Area, Delhi-110039."
2.4 Being aggrieved by this order, the appellant filed appeal before Commissioner (Appeals), who modified the order of the lower adjudicating authority while upholding the duty demand and confiscation under Section 111(l) and 111(m) of the Customs Act, however, reduced the redemption fine from Rs. 20 lakhs to Rs. 8 lakhs under Section 125(1) of the Customs Act. Penalty imposed was also reduced from Rs. 1,72,82,986/- to Rs. 1 Crore under Section 114AA of the Customs Act.
7
C/50398-50399/19 2.5 Being aggrieved by the impugned order, the assessee is in appeal before us.
3. Learned Advocate submitted that the impugned order is based in mechanical manner not following the principles of Customs Valuation Rule, 2007 and liable to be set aside on the ground that the appellant has filed the subject Bill of Entry on the basis of invoice and other documents received from the overseas supplier. The appellant was not aware of the procurement price of the overseas supplier. It was on request of appellant, the overseas supplier provided a copy of back to back invoice by M/s Office King Co. Limited who has supplied the imported items to M/s Asia Ethics Limited, Hong Kong the exporter of the consignment in question. The appellant submitted copy of same to the SIIB and agreed to pay differential duty on the basis of procurement price of overseas supplier under the compelling circumstances as the goods were held up and the appellants were under tremendous pressure from the overseas supplier as well as by the Indian buyer. In view of above, the appellant agreed to pay the differential duty. Appellant was also under the bona fide belief that the brand name "Shri & Sam" is not of any international repute or belongs to any Indian and hence the appellant declared the subject goods as unbranded one while filing the Bill of Entry on the basis of description provided by the overseas buyer. It is also submitted that the appellant have also imported the similar items in past at much lower price and those consignments were cleared by the Customs at the declared price. As far as the discrepancy in the quantity for the described imported the appellant were not very clear about the units and sets 8 C/50398-50399/19 and on knowing the same, after 100% examination, agreed to pay the duty on the excess quantity.
3.1 It is submitted by the learned Advocate that Department has not found any mis-declaration in respect of other items and the valuation thereof but for three items namely Frying Pan, Frying Pan (Bowl Shaped) and Pizza Pan. The appellant agreed to price indicated in third invoice No. AS-1109 dated 11.9.2017, copy of which was shown by the Departmental Officer during the recording statement on 30.4.2018. The appellant did not accept the contents and the genesis of the said invoice and recorded his disagreement with the value mentioned in the invoice for some 3 or 4 items on the copy of the said invoice and also in the statement recorded on 30.4.2018. However, the learned adjudicating authority did not consider the same and re-determined the highest value as apparent on the three invoice.
3.2 All these points were agitated before the learned Commissioner (Appeals). However, he has not considered the point raised by the appellant and approved the order passed by the lower adjudicating authority so far as valuation is concerned. The learned Commissioner (Appeals) has failed to appreciate that enhancement of the value by the lower adjudicating authority without having any evidence of contemporaneous imports of identical or similar goods at higher value or any market enquiry or any other evidence of extra payment so as to reject the transaction value. It is, thus, alleged that the rejection of the transaction value was is gross violation of Customs Valuation Rules, 2007, as has been held in catena of decisions by the Hon'ble Supreme Court and 9 C/50398-50399/19 various High Courts and this Tribunal. The learned Commissioner (Appeals) has grossly erred in relying on a document, that the third set of invoice, which is neither retrieved nor recovered from the E. Mails/Mobile Phone/premises nor accepted by the appellant. Learned Commissioner (Appeals) has also not considered the fact that there is no evidence on record regarding payment made over and above to declare the invoice value of the subject goods. Since the Department has not discharged its onus to prove undervaluation, the declared value, needs to be accepted. It is also submitted by learned Advocate, that under compelling circumstances the appellant agreed to market enquiry and offered to accompany the officers of the Customs for the said market enquiry. The appellant submitted a copy of the invoice showing the procurement price of the overseas supplier, which was reflected in 2nd/3rd set of invoice and agreed to pay duty accordingly. Not only that the appellant deposited differential duty in full as per purported invoice so as to ensure early release of the subject goods on the assurance of the departmental officer but no action was taken for release of the goods. Learned Advocate further submits that no doubt respondent has agreed to the enhanced price based on his inculpatory statements but that the statement was extracted from the appellant under pressure and false assurance. The appellant agreed to a proposal of the investigating officers as to avoid detention and demurrage and to meet the obligation of Indian buyers. In view of above, the learned Advocate submits that the impugned order is against the Customs Act and Customs Valuation rule and needs to be set aside in appeal. 10
C/50398-50399/19
4. Learned Authorized Representative on behalf of the respondent reiterates the findings of the impugned order.
5. We have gone through the submissions made by both the sides and also perused the appeal record.
6. The issue to be determined in this case as to which is correct value at which the goods imported which is required to be accepted for the purpose of assessment of Customs duty. It is on record that the appellant has submitted the first invoice declaring the value of the imported consignment USD 48016.38 as per invoice AS-1009 dated 11 September, 2017. (the first only). The another invoice was obtained from E. Mail of the appellant which showed the value to the extent of USD 75175.28 but having same invoice No. As-1009 dated 11 September, 2017 (second invoice). Yet another Invoice having the same No. AS-1109 dated 11 September 2017 was obtained by the Department which showed the price of USD 129573.28 for the same consignment (third invoice). It is the contention of the appellant that although they have agreed to this price but with endorsement that "I have seen this invoice but do not agree with the contents mentioned in this invoice. Further, I agree to pay the duty on the value of this invoice to avoid the demurrage charges and early release of the goods." It cannot be said that this acceptance was voluntarily in nature. The Department has not investigated the matter to find out as to why there are three different invoice of same number, one submitted along with the Bill of Entry other, retrieved from the E. Mail of the appellant and third one at which the consignment has been assessed obtained from the source unknown to the appellant 11 C/50398-50399/19 but available with the Investigation officer. The Department has also conducted the market survey of the various items imported by the appellant but could not find any market price for those goods in view of their not being available for the purpose of comparison. The Department also conducted the investigation at the buyer's end in India. In this case, the appellant contends that these goods were imported for one M/s Jagdamba International who was also investigated by the Revenue. The sale price submitted by M/s Jagdamba International confirmed with the price are in the range of the value declared in the first invoice submitted along with the Bill of Entry. These prices were not for the same goods which were being imported by the appellant but was of the similar goods imported by the appellant on the previous occasion for M/s Jagdamba International. Department has also not conducted any investigation regarding the payment made to the overseas buyer for export of these goods covered by the said Bill of Entry filed by the appellant. On the other hand, the appellant categorically states that they have not made any payment over and above the first invoice value i.e USD 48016.38. Regarding the second invoice having the value of USD 75,175,28 which was retrieved from the E. Mail of the appellant it is submitted that the same was obtained in order to get quick clearance from the customs as desired by the Investigating Officer, but stressed that they have not paid over and above the price of USD 48016.38. The appellant has not accepted the value of the assessment as per the third invoice at USD 129573.28, which is clearly manifested from the endorsement made on the said invoice and produced as above. This cannot be 12 C/50398-50399/19 said to be their voluntary acceptance of price for the imported consignment. The valuation of the imported goods has to be done as per Section 14 of the Customs Act read with Custom Valuation Rules, 2007, which has not been followed in this case. Investigation has been done in an unprofessional manner and the prices has been arbitrarily enhanced by the Customs Officer which has not been rectified in the impugned order in spite of various submissions made by the appellant. The Department has not been able to provide any value for the contemporaneous import but for the third invoice the source of which is not disclosed. In view of that it will be inappropriate and contrary to the provisions of the Section 14 of the Customs Act read with Custom Valuation Rules, 2007 to reject the transaction value as has been held by the lower adjudicating authority and learned Commissioner (Appeals) in the impugned order.
7. In view of above, we set aside the impugned order and allow the appeals. The department is directed to release the consignment at declared price within a fortnight from the receipt of this order.
(Pronounced in Court on 17.05.2019) (Anil Choudhary) Member (Judicial) (Bijay Kumar) Member (Technical) RM