Custom, Excise & Service Tax Tribunal
Artex Overseas Pvt Ltd vs Principal Commissioner, Customs ... on 4 May, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Customs Appeal No. 51159 of 2020
(Arising out of Order-in-Appeal No. CC(A)CUS/D-II/ICD/PPG/144-147/2020-21
dated 09-06-2020 passed by the Commissioner of Customs (Appeals), New
Customs House, Near IGI Airport, New Delhi-110037)
M/s Artex Overseas Pvt. Ltd. ...... Appellant
Plot No. 10, SSI Jahangirpuri
Industrial Area, New Delhi-110033
VERSUS
The Principal Commissioner of Customs-
ICD, Patparganj- Delhi-110096 ......Respondent
WITH Customs Appeal No. 51160 of 2020 (Arising out of Order-in-Appeal No. CC(A)CUS/D-II/ICD/PPG/144-147/2020-21 dated 09-06-2020 passed by the Commissioner of Customs (Appeals), New Customs House, Near IGI Airport, New Delhi-110037) M/s Artex Overseas Pvt. Ltd. ...... Appellant Plot No. 10, SSI Jahangirpuri Industrial Area, New Delhi-110033 Versus The Principal Commissioner of Customs-
ICD, Patparganj- Delhi-110096 .....Respondent WITH Customs Appeal No. 51161 of 2020 (Arising out of Order-in-Appeal No. CC(A)CUS/D-II/ICD/PPG/144-147/2020-21 dated 09-06-2020 passed by the Commissioner of Customs (Appeals), New Customs House, Near IGI Airport, New Delhi-110037) M/s Artex Overseas Pvt. Ltd. ...... Appellant Plot No. 10, SSI Jahangirpuri Industrial Area, New Delhi-110033 Versus The Principal Commissioner of Customs-
ICD, Patparganj- Delhi-110096 ......Respondent 2 C/51159-51161 & 51165/2020 AND Customs Appeal No. 51165 of 2020 (Arising out of Order-in-Appeal No. CC(A)CUS/D-II/ICD/PPG/144-147/2020-21 dated 09-06-2020 passed by the Commissioner of Customs (Appeals), New Customs House, Near IGI Airport, New Delhi-110037) M/s Artex Overseas Pvt. Ltd. ...... Appellant Plot No. 10, SSI Jahangirpuri Industrial Area, New Delhi-110033 Versus The Principal Commissioner of Customs-
ICD, Patparganj- Delhi-110096 ......Respondent APPEARANCE:
None for the Appellant Mr. Rakesh Kumar, Authorized Representative of the Department CORAM :
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MS. HEMAMBIKA R PRIYA, MEMBER (TECHNICAL) FINAL ORDER NO._50625-50628/2023_ DATE OF HEARING: May 04, 2023 JUSTICE DILIP GUPTA The order dated 02.06.2020 passed by the Commissioner of Customs (Appeals) dismissing the four appeals filed by the appellant has been assailed in all these four appeals.
2. The appellant had imported certain products and filed four Bills of Entry on the basis of self assessment. These Bills of Entry were assessed at higher values by the assessing authority on the basis of contemporaneous data which values were accepted by the importers in writing. It is after payment of duty in terms of the re- determination of the value of the assessed goods by the assessing authority that the four appeals were filed by the appellant before the Commissioner (Appeals).
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C/51159-51161 & 51165/2020
3. It is not in dispute that the appellant had declared USD 1.15 per kg for the goods in the four Bills of Entry. On being confronted with this contemporaneous data, the appellant submitted letters specifically stating that it agreed for enhancement of the value of goods to USD 1.94 per kg and that it did not desire that a show cause notice should be issued to it or personal hearing be provided to it, which requirements are set out in section 124 of the Customs Act, 19621. It also stated that it did not desire that a speaking order, as contemplated under section 17(5) of the Customs Act, should be passed on the Bills of Entry. In view of the specific requests made in the letters that were submitted by the appellant in regard to all the Bills of Entry that it had agreed for the declared value of the goods to be enhanced, the assessing officer assessed the value of the goods at the enhanced rate. It is after the payment of duty on the aforesaid assessments made by the assessing officer and after the "out of charge" date that the appellant filed four appeals before the Commissioner (Appeals), which appeals were ultimately dismissed by a common order dated 02.06.2020.
4. Notice of this appeal was sent to the appellant and the learned counsel for the appellant by speed post informing that the appeal would be listed for final hearing on 04.05.2023. Office has reported that the notice sent to the appellant in all the four appeals was served upon on 08.04.2023. Case has been called out but no one has appeared on behalf of the appellant.
5. Shri Rakesh Kumar, learned authorized representative appearing for the Department has submitted that the issue involved in all these four appeals stands decided against the appellant by a
1. the Customs Act 4 C/51159-51161 & 51165/2020 decision of the Tribunal in Commissioner of Customs ICD Partparganj & Others ICDS (ICD Palwal, Haryana) Vs. M/s Manvi Exim Pvt. Ltd.2
6. It is, therefore, considered appropriate to decide the appeal on merits after hearing the learned authorized representative of the Department and after perusing the records.
7. Section 14 of the Customs Act deals with „Valuation of Goods‟ and is reproduced below:
"Section 14. Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf:
Provided ********"
8. It would be seen that section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. The Valuation Rules have been framed in exercise of the powers conferred by section 14 of the Customs Act. Rule 12 deals with rejection of the declared value and is reproduced below:
"Rule 12. Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the
2. 2022 (7) TMI 466-CESTAT New Delhi 5 C/51159-51161 & 51165/2020 transaction value of such imported goods cannot be determined under the provisions of sub-rule(1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1).
Explanation.-(1) For the removal of doubts, it is hereby declared that:-
(i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9.
(ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers.
(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include -
(a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed;
(b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price;
(c) the sale involves special discounts limited to exclusive agents;
(d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production;
(e) the non declaration of parameters such as brand, grade, specifications that have relevance to value;
(f) the fraudulent or manipulated documents."
9. Rule 12 provides that when the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods 6 C/51159-51161 & 51165/2020 cannot be determined under the provisions of rule 3(1). Explanation
(iii) to rule 12 provides that the proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons, which may include any of the six reasons contained therein, one of which is that there is a significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed.
10. The relevant portion of section 17(5) of the Customs Act is reproduced below:
"Section 17. Assessment of duty.- (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self- assess the duty, if any, leviable on such goods.
(2) The proper officer may verify the entries made under section 46 or section 50 and the self-assessment of goods referred to in sub-section (1) and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary.
Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria.
(3) For the purposes of verification under sub- section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.
(4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.
(5) Where any re-assessment done under sub- section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re- assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be."
11. It would be seen that though in a case where re-assessment has to be done under sub-section (4) of section 17 of the Customs 7 C/51159-51161 & 51165/2020 Act, the proper officer is required to pass a speaking order on the reassessment, but if the importer or exporter confirms his acceptance of the re-assessment, a speaking order is not required to be passed.
12. The Commissioner (Appeals) has recorded the following findings while dismissing the appeal:-
"5.3. However it is noted from the ICEGATE status of impugned bills for entry that in response to the assessing officer‟s query i.e. "Pls justify declared value", the Appellant had responded as-
"R/Sir we have submitted party letter dated 02.01.2019. We were shown the contemporaneous import of the said items from the NIDB Date for the corresponding period. Accordingly in view of the said contemporaneous NIDB Data we find our declared value liable for rejection under Customs Valuation Rules 2007. We voluntarily declare the assessable value of the said goods as USD 1.94/kgs. Since we have voluntarily accepted the rejection of declared value of the goods increased value. We do not want any speaking order on the re-assessment of the same. We also do not want any show cause notice or personal hearing in the matter. Thus we voluntarily forfeit our right so as to having show cause notice and opportunity of personal hearing as provided under Section 124 of the Customs Act, 1962. So you are requested kindly assess the BE pl.
It is evident from this response that the Appellant had gone through the data of contemporaneous imports and accepted that their declared value was liable for rejection Under CVR 2007 and then voluntarily declared the value as $1.94 per kg. The Appellant had waived requirement of show cause notice, personal hearing and requested for assessment of bill of entry accordingly. Thus the bills of entry were assessed as per revised declared value of $ 1.94/kg and not re-assessed by the Assessing Officer contrary to self assessment. 5.4 It is also noted that the Appellant is contesting assessment of bills of entry at higher values despite declaring such value voluntarily during assessment after going through contemporaneous import data and agreeing that declared value is liable to rejection. The grounds of appeal are the same on which the Appellant had agreed during assessment. The Appellant cannot challenge assessment on the same grounds which were agreed to during assessment. In this regard I rely upon Hon'ble Tribunal's judgment in case of M/s Jai Shiv Trading Co. [2018(359)ELT 0208(T-Del.)]. The same principle was followed in case of M/s Sodagar Knitwear [2018(362) ELT 819(T- Del)] which has been upheld by Hon'ble Apex Court in 2018(362) ELT A213 (SC).
5.5 It is evident that in this case, when the Appellant was asked to justify the declared value, they themselves agreed that their declared value was liable to rejection and hence voluntarily declared higher value. Thus this case stands at different footing as compared to various case laws cited by the Appellant in as much as the referred case laws relate to enhancement of value by the assessing officer which is not the situation in present 8 C/51159-51161 & 51165/2020 appeal. Thus the case laws and various orders cited by the Appellant are not relevant to present appeal. Accordingly I pass the following order. "
13. It is seen from a perusal of section 17(4) of the Customs Act that the proper officer can re-assess the duty leviable, if it is found on verification, examination or testing of the goods or otherwise that the self-assessment was not done correctly. Sub-section (5) of section 17 provides that where any re-assessment done under sub- section (4) is contrary to the self-assessment done by the importer, the proper officer shall pass a speaking order on the re-assessment, except in a case where the importer confirms his acceptance of the said reassessment in writing.
14. In the present case, as noticed above, the proper officer doubted the truth or accuracy of the value declared by the importers for the reason that contemporaneous data had a significantly higher value. It was open to the importers to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared by them and seek a reasonable opportunity of being heard, but they did not do so. On the other hand, the importers submitted in writing that though they had declared the value of the imported goods at a particular value, but on being shown contemporaneous data, they agreed that the value of the goods should be enhanced. The importers also specifically stated that they did not want to avail of the right conferred on them under section 124 of the Customs Act and, therefore, they did not want any show cause notice to be issued to them or personal hearing to be provided to them. The importers also specifically stated that they did not want a speaking order to be passed on the Bills of Entry. It needs to be noted that section 124 of the Customs Act provides for issuance of a show cause notice and personal hearing, and section 9 C/51159-51161 & 51165/2020 17(5) of the Customs Act requires a speaking order to be passed on the Bills of Entry, except in a case where the importers/exporters confirm the acceptance in writing.
15. It is no doubt true that the value of the imported goods shall be the transaction value of such goods when the buyer and the seller of goods are not related and the price is the sole consideration, but this is subject to such conditions as may be specified in the Rules to be made in this behalf. The Valuation Rules have been framed. A perusal of rule 12(1) indicates that when the proper officer has reason to doubt the truth or accuracy of the value of the imported goods, he may ask the importer to furnish further information. Rule 12(2) stipulates that it is only if an importer makes a request that the proper officer shall, before taking a final decision, intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared and provide a reasonable opportunity of being heard. To remove all doubts, Explanation 1(iii)(a) provides that the proper officer can have doubts regarding the truth or accuracy of the declared value if the goods of a comparable nature were assessed at a significantly higher value at about the same time.
16. Explanation (1)(i) to rule 12 of the Valuation Rules, however, provides that the rule only provides a mechanism and procedure for rejection of declared value and does not provide a method for determination of value and if the declared value is rejected, the value has to be determined by proceeding sequentially in accordance with rules 4 to 9.
17. The very fact that the importers had agreed for enhancement of the declared value in the letters submitted by them 10 C/51159-51161 & 51165/2020 to the assessing authority, itself implies that the importers had not accepted the value declared by them in the Bills of Entry. The value declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the importers had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under rule 3(1) for the reason that the declared value has been rejected under sub rule 2, that the value of the imported goods is required to be determined by proceeding sequentially through rule 4 to 9. As noticed above, the importers had accepted the enhanced value and there was, therefore, no necessity for the assessing officer to determine the value in the manner provided for in rules 4 to 9 of the Valuation Rules sequentially.
18. Thus, what follows in the aforesaid discussion is that the order passed by the Commissioner does not suffer from any illegality so as to call for any interference in this appeal.
19. All the four appeals are, accordingly, dismissed.
(Order dictated and pronounced in the open Court) (JUSTICE DILIP GUPTA) PRESIDENT (HEMAMBIKA R PRIYA) MEMBER (TECHNICAL) Rekha