Custom, Excise & Service Tax Tribunal
M/S. Venus Traders vs C.C.E., Delhi-Iv on 12 August, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066.
Date of Hearing 12.08.2015
For Approval &Signature :
Honble 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/214/2010-CU[DB]
[Arising out of Order-in-Appeal No.08-09/Cus/Appl/DLH-IV/2010, dated 15.02.2010 passed by the C.C.E.(Appeals), Delhi-I]
M/s. Venus Traders Appellant
Vs.
C.C.E., Delhi-IV Respondent
Appearance None - for the appellants Mr. BB Sharma, DR - for the respondent CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order No.52823/2015, dated 12.08.2015 Per Mr. R.K. Singh :
Appeal has been filed against Order-in-Appeal dated 15.02.2010 in terms of which the value of the worn clothing imported vide Bill of Entry No.115447 dated 03.04.2009 was enhanced to US$ 1.40 per KG from US$ 0.80 determined by the primary adjudicating authority which itself had revised the value to US$ 0.80 per KG from US$ 0.60 per KG declared by the appllant.
2. The facts of the case briefly stated are as under:-
The appellant imported consignment of worn clothing classified under Customs Tariff Heading No.63 090000. The primary adjudicating authority found that the impugned goods were restricted for import and the appellant did not have an import licence and therefore the goods were liable to be confiscation under Section 111 (d) of the Customs Act, 1962. The primary adjudicating authority also noted that the Special Investigation and Intelligence Branch, after conducting enquiries had suggested a minimum floor price of US$ 0.80 per KG for such goods. The primary adjudicating authority also found that the Special Investigation and Intelligence Branch has conducted market enquiries to ascertain the margin of profit in respect of such goods. Noting that the appellant vide letter dated 22.05.2009 admitted that it did not have any import licence for the impugned goods and also accepted the enhanced value of US$ 0.80 per KG, he passed the primary adjudication order enhancing the value to US$ 0.80 per KG, ordered confiscation of the impugned goods under sections 111 (d) and 111(l) ibid but gave an option to redeem the goods on a fine of Rs.2,68,583/- and also imposed penalty of Rs. 75,000/-.
3. The appellant as well as Revenue filed appeal before the Commissioner (Appeals). While the appellant assessee questioned the valuation and redemption fine and penalty, Revenue questioned the valuation arguing that the correct value should have been US$ 1.40 per KGs. The Commissioner (Appeals) vide impugned Order-in-Appeal accepted Revenues contention and rejected the assessees appeal and directed the primary adjudicating authority to look into the aspect of assessment, fine and penalty in view of the enhanced value at the rate of US$ 1.40 per KG.
4. In its appeal before the Tribunal the appellant has contended that upward revision of value to US$ 1.40 per KG or even to US$ 0.80 per KG was not as per law as the transaction value has to be accepted in the absence of any evidence to reject the same. It also questioned the redemption fine and penalty saying that the margin of profit has not been properly determined. It contended that the transaction value first needs to be rejected before determining the value and that has not been done in the present case. It cited the judgement of Supreme Court in the case of Eicher tractors Ltd versus CC Mumbai [2000 (122) ELT 321 (SC)]. It also stated that worn clothing cannot be treated to be restricted.
5. The ld. Departmental Representative supported the impugned order stating that the appellant was well aware that the goods were restricted and therefore the redemption fine and penalty are in order.
6. We have considered the contentions of both sides. We find that in this case the appellant had voluntarily foregone the requirement of a Show Cause Notice and accepted in writing the valuation of US$ 0.80 per KG which the primary adjudicating authority determined on the basis of the recommendation of the Special Investigation and Intelligence Branch which had suggested a minimum floor price of US$ 0.80 per KG for worn clothing. As has been decided by CESTAT in the case of Grand Metal Industries Vs. CC, Amritsar vide Final Order No. 52569 52570/2015 dated 17.08.2015, DJP International Vs. CC, New Delhi vide Final Order No. 52361/2015 dated 01.07.2015 [which had taken note of the Supreme Court judgement in the case of Eicher tractors (supra)] and Vikas Spinners Vs. CC, Lucknow [2001 (128) 143 (Tri.-Del.)] once the appellant accepted the value of US$ 0.80 per KG and the goods were released, it was not open for the appellant to contest the valuation of such goods. In this regard we partially reproduce para 4 from the judgement of CESTAT in the case of Grand Metal Industries Vs. CC, Amritsar (supra):-
4. .....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 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. The judgement in the case of Dunlop India Ltd. Vs. Union of India (supra) cited by the appellant was with regard to classification of goods and it essentially stated that even when the goods were cleared under a classification consented to by the assessee, the assessee was not debarred from seeking refund. The above judgement did not in any way mean that the refund should necessarily be granted only because the assessee questioned the classification earlier agreed to by it. The refund will have to be decided based upon the evidence and it is quite possible that the goods having been cleared, it may not always be possible in every circumstance to re-determine the classification; for example, if determination of classification requires the physical presence of the goods and if the goods were not available, re-classification cannot be done and hence refund would not be granted. Similarly, 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.
7. We however notice that the Commissioner (Appeals) further increased the value to US$ 1.40 per KG on the appeal filed by Revenue. The appellant had not consented for that value and we find that the Commissioner (Appeals) had essentially gone by the recommendation of DRI about the valuation and has not indicated as to how that recommendation of DRI is applicable to the impugned goods in the framework of the Customs (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred to as the said Rules). The Commissioner (Appeals) has referred to the judgement in the case of Techno-marketing Vs. CC, Kolkata [2004 (164) ELT 113 (Tri Del.)] wherein it was stated that letter written by one Commissioner to another indicating value of various brands of loudspeakers depending on their size arrived at after considering prices observed in trade and from other sources, such letter can be relied upon for valuing speakers under section 14 of Customs Act, 1962. We find that the said observation does not have an implication that the value indicated by the other Commissioner should be accepted in disregard to the said Rules. Further, the said observation has been made in respect of standard new items like speakers while the goods involved in the present case are worn garments whose value depends upon the condition, quality and nature of the goods and in the absence of the goods, it is well nigh impossible to arrive at the correct value. Therefore, we are of the view that there was no legal basis available to Commissioner (Appeals) to enhance the value from US$ 0.80 per KG to US$ 1.40 per KG.
8. It is however a fact that the impugned goods are not freely importable. Even the ITC (HS) classification for worn clothing and other worn articles against classification CTH 6309 declared these goods to be restricted subject to import licence. Therefore, confiscation as ordered by the primary adjudicating authority is legally sustainable as the appellant did not have any import licence. We also find that the redemption fine was determined by the primary adjudicating authority on a reasonable basis having regard to the margin of profit as determined by a wing of the Customs by conducting a market survey with regard to such goods. Similarly, for the kind of offence, the penalty imposed is in no way arbitrary or unreasonable.
9. In the light of the foregoing discussion, we partly allow the appeal to the extent that the value enhanced by the Commissioner (Appeals) is set aside and as a consequence the order of the primary adjudicating authority is upheld.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -7-