Customs, Excise and Gold Tribunal - Bangalore
Selection Enterprises vs Commissioner Of Customs on 27 December, 2004
Equivalent citations: 2005(183)ELT273(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. This is an appeal against O-I-A No. C3/96/0/2002-SEA & C. Cus No. 217/2002, dated 30-5-2002 passed by the Commissioner of Customs (Appeals).
2. The appellants imported consignments of assorted chocolates of various brands and other items from Dubai and declared the GIF value of US $ 4,357.50. On the basis of the declared value, duty was paid. However the SIIB of Chennai Custom House conducted detailed examination of the goods and also market enquiries and found that the goods have been grossly under-valued. Proceedings were initiated against the appellant. The original authority in the adjudication proceedings demanded the differential duty of Rs. 8,15,661.56 after fixing CIF value of the goods imported at US $ 16,739.30. The goods were confiscated. The redemption fine of Rs. 5 lakhs was imposed. A personal penalty of Rs. 1 lakh was also imposed. The appellant was not successful in his appeal before the Commissioner (Appeals). The Commissioner (Appeals) in his order has confirmed the order of the Original Authority. Hence the appellant has come before this Tribunal against the impugned order.
3. Shri A.K. Jayaraj learned Advocate appeared on behalf of the appellants and Shri M. Raja Ram learned JDR appeared for the department. The learned Advocate urged the following points :
(1) The consignment consisted of assorted confectionary/chocolates of different countries of origin and most of them are from 3rd world countries and are not branded products.
(2) The imported goods are freely importable.
(3) The goods were originally detained by the SIIB and the statements from the appellants were taken by threatened coercion.
(4) In view of the threat from Departmental officers the appellants stated that the value of the goods is Rs. 6 lakhs.
(5) The department without any basis has determined the value under Rule 8 of the Customs Valuation Rules, 1988.
(6) The Department is bound to accept the invoice value unless it is found that the seller and buyer have interest in the business of each other and that the price is not to be the sole consideration of the same.
(7) The Original Authority has not followed the valuation rules in determining the assessable value.
(8) Non-adherence to valuation rules is totally unsustainable in law as decided in clear terms in the case of Sandip Agarwal v. Collector of Customs reported in [1992 (62) E.L.T. 528] wherein it has been observed by the Hon'ble Court that Section 14 of the Act is to be read along with Rule 4 of the Customs Valuation Rules.
(9) Enhancement of the value has been done based on the appellants statements taken under coercion and duress.
(10) There is no contemporaneous import to reject the transaction value.
(11) The authorities have not taken in to account the decision of the Supreme Court in the case of Eicher Tractor v. Commissioner of Customs, Mumbai [2000 (122) E.L.T. 321 (S.C.)].
(12) The Commissioner (Appeals) has not taken into account the decision cited by the appellant in the case of M/s. Markandi Prasad Radha Krishna Prasad Pvt. Ltd. wherein it was held that the acceptance of enhanced proposed by the department by the assessee due to his urgency to clear the goods does not preclude him from challenging the enhancement by way of appeal.
(13) The learned advocate relied upon the large number of judicial decisions. The Hon'ble High Court of Calcutta in the case of Manindra Chandra Dey v. CEGAT [1992 (58) E.L.T. 192 (Cal.)] has held that confessional statements even if found admissible should be treated as a light weight documents needing independent corroboration. The Hon'ble Supreme Court in the case of Koteshwara Rao v. Sub-barao [AIR 1971 SC 1542] has held that before the right of party can be considered to have been defeated on the basis of an alleged admission by him, the implication of the statement made by him must be clear and conclusive. There should be no doubt or ambiguity about me alleged admissions. The Hon'ble Supreme Court in the case of Sounds N. Images v. C.C. [2000 (117) E.L.T. 538 (S.C.)] has held that the burden to establish under-valuation by methods known to law and in a satisfactory manner is on the department and the onus cannot be shifted to the importer. The learned JDR reiterated the findings of the OIA as well as the OIO and prayed for dismissal of the appeal.
4. We have given a careful consideration to the submissions made by the appellants and the revenue. The Commissioner (Appeals) has upheld the original order on the ground that the department has followed the correct method in accordance with the valuation rules in enhancing the CIF value of the imported goods. The original authority in para 8 of his order dated 24-1-2002, has stated the manner of arriving at the assessable value of the imported goods. According to him the value declared by the appellants was very low. Hence the same could not be accepted as per rule 4 of the Customs (Valuation) Rules, 1988. Since the goods imported are of various countries origin and brand and no identical imports have been noticed during the relevant period, the value could not be determined under Rule 5 and 6 of the Customs (Valuation) Rules. No data was available for duty paid imports or for condition of value of goods under Rules 7 and 7A. The importer has also failed to furnish the manufacturers inputs in terms of Rule 10A. Hence the values have to be determined under Rule 8 of the Customs (Valuation) Rules. He has further stated that the market enquiries revealed that the MRP value of the imported goods is equal to Rs. 27,89,6807- by working backwards, by allowing a margin of 40% from the wholesaler to the retailer and further 50% margin from the importer to the wholesaler and by deducting duty element. The total CIF value was fixed at Rs. 8,07,6717- on 22,000 US $ Rs. (16,739.30) The differential duty was worked out to Rs 65,11,706/- It is seen that the goods imported by appellants are assorted chocolates and are from various countries. Even though the original authority has stated that market enquiries have been made, there is no indication that a copy of the market enquiry made by the department has been furnished to the appellant for his rebuttal or otherwise. The market enquiry report is also not available in the records for our perusal. Simply on the basis of the appellants' acceptance of the enhanced value when his statement was recorded, enhancing the assessable value without adhering to the principles of natural justice cannot be sustained. The vague assertion that market enquiries have been made without indicating the details of the same and fixing the duty liability on the importer on the basis of the same cannot be accepted. In view of the above observations we allow the appeal with consequential relief.