Custom, Excise & Service Tax Tribunal
Burberry International vs New Delhi on 17 August, 2020
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Custom Appeal No. 52214 of 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO. II
Custom Appeal No. 52214 of 2019
(Arising out of order in appeal No. CC(A)CUS/D-II/PREV/NCH/258/2019-20 dated
30.05.2019 passed by the Commissioner of Customs (Appeals), New Customs
House, Near IGI Airport, New Delhi).
M/s Burberry International Appellant
C-9/8, Sector-8, Rohini
New Delhi-110023.
VERSUS
Commissioner of Customs Respondent
New Custom House Near IGI Airport, New Delhi.
APPEARANCE:
Shri M. S. Hasan, Advocate for the appellant Shri Rakesh Kumar, Authorised Representative for the respondent CORAM:
HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. C. L. MAHAR, MEMBER (TECHNICAL) FINAL ORDER NO. 50746/2020 DATE OF HEARING: 14.11.2019 DATE OF DECISION: 17.08.2020 ANIL CHOUDHARY:
The issue in this appeal is whether order of rejection of the declared value as regards the import of 'Silicone Weather Proofing Sealant', 'Fast Track Acqua - tech very high bond foamed acrylic tape' imported from China have been rightly rejected and revalued alongwith order of confiscation with option to redeem on payment of fine and further demand of differential duty alongwith penalty under Section 114A of the Act and further penalty of Rs. 50,000/- under 2 Custom Appeal No. 52214 of 2019 Section 114AA on the appellant is correct, as confirmed by the impugned order in appeal.
2. Brief fact of the case are that based on intelligence, the goods imported vide Bill of Entry No. 2140432 dated 04.08.2015 filed by the appellant was subjected to detailed examination by the officer of the Customs Preventive Commissionerate, on the reasonable belief that the same were undervalued. On examination, goods containing (i) Silicone Weather Proofing Sealant (ii) Foamed Acrylic Tape and (iii) Tape were found. The quantity of goods was found as per the declaration, however, the length of the each tape as mentioned at (iii) above was found 8.2 meters as compared to declared length of 6.5 meters in the BoE/Invoice and Packing List. No MRP/ RSP stickers were found affixed on any cartons/ items. As the MRP/ RSP stickers were not affixed on the cartons and goods, it appeared the value has been mis-declared in terms of description viz a viz unit price. Hence, the goods appeared liable for confiscation under Section 111 of the Customs Act, 1962. Accordingly, the same were put under seizure under Section 110 of the Customs Act, 1962 for further enquiry/ investigation in the matter and representative samples of the goods were drawn as per procedure for comparison of value of similar / identical goods as per NIDB data. Statement of Shri Sameer Mittal, Proprietor of the appellant was recorded under Section 108 of the Customs Act, 1962 on various occasions. He inter alia stated that he had been regularly importing silicon adhesives in his own brand name i.e. 'KORNING' and 'BARRBERY' from supplier namely 'M/s Guandong Olivia Chemical Ind Co. Ltd.', and 'M/s Kam Yip silicon Sealant HK 3 Custom Appeal No. 52214 of 2019 Co. Limited'. He was shown the NIDB data in respect of silicon adhesives and he signed the same, in token of having seen the same on which the import price of silicon adhesives was given, but did not accept the value of Rs. 24.1/- per piece. On being asked how he declared and justified the declared value of $0.14 for sealant and $0.04 for the adhesive tape and whether he had any purchase order or any proof in support of the declared value, stated that the goods were purchased at the declared value but did not have any proof such as purchase order.
3. The importer vide letter dated 28.08.2015 submitted that there was a minor difference in length of 20 nos. of tapes, the consignment need not be detained. The provisional release of the consignment covered under Bill of Entry No. 2140432 dated 04.08.2015 was allowed by the competent authority under Section 110A of the Customs Act, 1962 with the conditions (i) 100% payment of differential duty amounting to Rs. 2,37,245/- (ii) furnishing of Bond for the entire value of the goods i.e. Rs. 11,58,275/- and (iii) furnishing of Bank Guarantee equal to 25% of the differential duty i.e. Rs.59,311/-. Provisional release was granted to the importer after fulfilling the conditions of the provisional release.
4. Since, Shri Sameer Mittal did not agree with the valuation of the imported goods as per NIDB data, the aspect of undervaluation was also examined by taking further recourse to price available on internet. It was found that minimum price for bulk quantity from China in respect of similar goods were US$0.52/piece. Also retail 4 Custom Appeal No. 52214 of 2019 price of similar product available on net was Rs. 80/- per piece (minimum price). On the assessable value of US$0.52 taken from the net, the MRP worked out to Rs. 75/- per piece which appeared to be in consonance with the retail price of Rs. 80/- prevalent in India.
5. It appeared that the invoice value submitted at the time of clearance of the Bill of Entry No. 2140432 dated 04.08.2015 is liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods), Rule, 2007. The assessable value of the Silicon Sealant imported by the party appeared not be less than US$0.52/pc. which was the minimum rate available for the identical/ similar products as per website. The price appeared in consonance with the retail price of Rs. 80/- per piece. However, in order to follow the principal of natural justice, lowest amount of all value of the identical / similar goods retrieved from NIDB data i.e. Rs. 24.10 per piece was taken for assessment. It was also observed that the importer imported most of their products from M/s Guangdong Oliva Chemical Industry which was giving a minimum rate of US$0.6/pc for the imported goods, as obtained from the internet.
6. Accordingly, the importer firm M/s Burberry International were issued a show cause notice proposing therein for rejection of the declared value; re-determination of assessable value at the lowest price obtained as per NIDB data; demanding differential duty; confiscation of imported goods/ imposition of redemption fine; imposition of penalty under Section 114A and Section 114AA of the Customs Act, 1962.
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Custom Appeal No. 52214 of 2019
7. The appellant contested the show cause notice by filing reply and also appeared at the time of personal hearing. The appellant contended that as per para 10 of the show cause notice, admittedly silicon Adhesive is complex and complicated product where percentage change in chemical composition of the ingredients can change the properties of the final product. There is no mention of the chemical composition of the product on the samples resumed during examination. The price also depends on the quality of the adhesive and tape, like curing at room temperature of silicon, length of life etc. It was further urged that declared value can be rejected only upon condition as mentioned in Rule 4(2) or in Rule 10A of the Customs Valuation Rules. Further, stated that the seller/ shipper is not a related person and price is the sole consideration. Further, as required under Section 14(1) of the Customs Act read with the Valuation Rules, transaction value can be rejected only for cogent reasons. Simply casting suspicion on the invoice / transaction value is not sufficient for rejection. It is further contended that the appellant's unit price is Rs.14/- for each 300 ml. bottle of the silicon sealant. Further, as per NIDB data there are other Bills of Entry mentioned therein, wherein the actual unit price per bottle is Rs. 9/- to Rs. 15/-. Reliance is placed upon the price from website of M/s Chander Glass House at Rs. 80/- per bottle and of Silchem Sales for 260 ml bottle Rs. 125/-, clearly shows wide variation in the prices which depend on number of factors. Further, reliance is placed on the price quotation on the website of Alibaba which was minimum rate of GP Silicon Sealant at US$0.52 per piece for bulk quantity 6 Custom Appeal No. 52214 of 2019 manufactured in China. Thus, the Department have not given any basis for fixing the wholesale and retail margin. There is no proper scientific basis. Further, prices also vary as per the brand name. It was further urged that the Revenue adopting pick and choose method from the NIDB data relied upon, as they are ignoring the import price in respect of past Bill of Entry No. 9707166 dated 26.06.2015 and Bill of Entry No. 8648503 where value of 280 ml. and 300 ml Silicon Sealant has been accepted at Rs. 24/- per piece. Further, appellant contended that they are regular importers from M/s Olivia chemicals, China which is a ISO 9001 certified company. Thus, rejection of transaction value on the basis of one Sealant from different suppliers is not justified in view of difference in quality, quantity, period of time etc. Further, the appellant is a regular importer under his own brand name which are KORNING and BARRBERY. The appellant also produced contemporaneous data of import loaded from the website 'ZAUBA' wherein the transaction value is lower than the declared value as per appellant. Thus, as per rules when various import prices are available in respect of contemporaneous import, lowest of such prices is to be taken. Further, contended that the appellant imports directly from the manufacturer on better competitive rates. Vide order-in-original dated 15.03.2017 the Additional Commissioner (Prev.) passed the following order:-
(i) I reject the declared value of Rs. 4,69,906/- in respect of goods imported vide Bill of Entry No. 2140432 dated 04.08.2015 under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and re-determine the same at Rs.11,58,275/- (Rupees Eleven Lakhs Fifty Eight Thousand Two Hundred and Seventy Five only) under Rule 5 of the Rules ibid. (being the value of similar goods) as the actual transaction value of the goods.7
Custom Appeal No. 52214 of 2019
(ii) I confiscate the seized goods valued at Rs. 11,58,275/- seized vide panchnama dated 07.08.2015 under Section 111(m) of the Customs Act, 1962. I give an option under Section 125 of the Customs Act, 1962 to the importer to redeem the seized goods, released provisionally, on payment of redemption fine of Rs. 50,000/- (Rupees Fifty Thousand only).
(iii) I confirm demand of differential duty of Rs. 2,37,245/- (Rupees Two Lakhs Thirty Seven Thousand Two Hundred forty Five only) under Section 28 of the Customs Act, 1962 and order recovery of the same from the importer along with interest under Section 28AA of the Act ibid. I appropriate the differential duty amount of Rs.2,37,250/- already deposited by the party vide TR-6 challan No. 70711 dated 04.09.2015 at the time of provisional release of the goods against the above confirmed demand of the differential duty.
(iv) I impose penalty of Rs. 2,37,245/- (Rupees Two Lakhs Thirty Seven Thousand Two Hundred forty Five only) under Section 114A of the Customs Act, 1962 and Rs.50,000/- (Rupees Fifty Thousand only) under Section 114AA of the Customs Act, 1962 on M/s Burberry International, C-9/7, Sector-8, Rohini, Delhi-110087 through its proprietor Shri Sameer Mittal for their wilful acts of omission and commission as discussed in the foregoing paras."
8. Being aggrieved, the appellant preferred the appeal before the learned Commissioner (Appeals) inter alia on the ground that the order in original was passed in a mechanical manner without application of mind. Further, the contention of the appellant were not considered. Further, the Adjudicating Authority failed to follow the Rule of law, as no cogent reason has been given for rejecting of transaction value, save and except suspicion.
9. Learned Commissioner (Appeals) observed that upon examination of the goods under Bill of Entry as required no sticker of MRP/RSP was found fixed. Further, the length of tapes was found to be longer than declared. Thus, it is a case of mis-declaration. Further, on comparison of the declared price with the NIDB price of identical / similar goods, the declared values appear to be very low and accordingly have been rightly rejected. Further, admittedly the price on internet for bulk quantity was found to be US$0.52 per piece 8 Custom Appeal No. 52214 of 2019 and retail price in India was found to be Rs. 80/- per piece. As per the internet quotation the MRP worked out at Rs. 75/- per piece which is in consonance with the retail sale price of Rs. 80/-. Thus, the value as per NIDB data was taken at Rs. 24.10 per piece. The adjudicating authority have compared the price of the product under import 'Silicon sealant' is as follows:-
Description CIF Ass. Duty Post Price Price Price of goods value cum importation including Including including price charges importer wholesaler retailer (5%) margin margin margin (15%) (10%) (30%) Silicon 0.52 33.665 44 46 53 58 75 sealant Black/ Clear Further contemporaneous import price (NIDB data) of silicon adhesives at various ports in India (particularly at ICD, TKD, New Delhi) of same specification, from same place of origin, with almost same level of import and imported during the same period of time was shown to Sh. Sameet Mittal, prop. of M/s Burberry International (also supplied as RUD-3 to SCN dated 04.02.2016) wherein price was given as Rs. 24.1/- per piece."
10. Further, as per the price quoted by the shipper through website they were getting the minimum rate US$ 0.6 per piece for the Silicon Sealant. Thus, the Commissioner (Appeals) found the re-determined value was reasonable and proximate value confirming to the general principles of valuation. It was further observed that the appellant has not produced any documentary evidence in support of their contention, in spite of being a regular importer as admitted by them, particularly documents like purchase agreement or purchase order nor the costing sheet of the shipper for the product under dispute. Accordingly, the appeal was dismissed.
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Custom Appeal No. 52214 of 2019
11. Being aggrieved, the appellant is before this Tribunal on the ground which are more or less similar to the ground raised before the Commissioner (Appeals).
12. Learned Counsel Shri M. S. Hasan appearing for the appellant reiterated the grounds as per the appeal memo, which have been already taken notice herein above.
13. Learned Authorised Representative Shri Rakesh Kumar appearing for the Revenue relies on the impugned order.
14. Having considered the rival contentions, we find that the impugned order has been passed in accordance with law. Further, the appellant have failed to bring any cogent evidence on record, even before the Tribunal, inspite of being regular importer importing under their own brand name. Thus, apparently the appellant has not come with clean hands before this Tribunal. Accordingly, agreeing with the findings of the Commissioner (Appeals), we uphold the impugned order in appeal and dismiss the appeal in toto.
(pronounced on 17.08.2020) (Anil Choudhary) Member (Judicial) (C. L. Mahar) Member (Technical) Pant