Custom, Excise & Service Tax Tribunal
Kolkata(Port) vs R L Goenka & Sons on 10 July, 2024
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No. 75371 of 2018
(Arising out of Order-in-Appeal No. KOL/CUS (PORT)/AA/1612/2017 Dated 31.10.2017
passed by Commissioner of Customs (Appeals), Kolkata)
Commissioner of Customs (Port), Kolkata
(15/1, Strand Road, Kolkata-700001)
Appellant
VERSUS
M/s. R. L. Goenka & Sons
(28, Armenian Street, Room No. 14, Kolkata-700001)
Respondent
With
(i) Customs Appeal No. 75678 of 2018 (Commr. of Customs (Port), Kolkata Vs. Sri Narendra Kr. Goenka ) (ii) Customs Appeal No. 75679 of 2018 (Commr. of Customs (Port), Kolkata Vs. Sri Surendra Kr. Goenka) (iii) Customs Appeal No. 75680 of 2018 (Commr. of Customs (Port), Kolkata Vs. Sri Kishan Gopal Bhutra)
(ii) (Arising out of Order-in-Appeal No. KOL/CUS (PORT)/AA/2026-2028/2017 Dated 28.11.2017 passed by Commissioner of Customs (Appeals), Kolkata)
(iii) (Arising out of Order-in-Appeal No. KOL/CUS (PORT)/AA/2026-2028/2017 Dated 28.11.2017 passed by Commissioner of Customs (Appeals), Kolkata)
(iv) (Arising out of Order-in-Appeal No. KOL/CUS (PORT)/AA/2026-2028/2017 Dated 28.11.2017 passed by Commissioner of Customs (Appeals), Kolkata) APPEARANCE :
Mr. Tariq Sulaiman, Authorized Representative for the Appellant Mr. K. K. Sanyal, Consultant for the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) FINAL ORDER NO.76353-76356/2024 Date of Hearing : 10 July 2024 Date of Decision: 10 July 2024 PER R. MURALIDHAR:
Revenue has filed these appeals.
2. The facts of the case are that the respondent during the period 13.01.2004 to 12.09.2006, the respondents imported 'Poppy Seeds' under 23 2 Customs Appeal Nos. 75371, 75678-75680 of 2018 Bills of Entry. An investigation was conducted by DRI and thereafter a show cause notice was issued to the respondents to demand differential duty of customs alleging that the supplier of 'Poppy Seeds' is the same from Turkey whereas the declared price shown by the respondent is very less than the 'Poppy Seeds' imported by the other importers. Therefore, the proceedings were initiated against the appellants, but the Ld. Commissioner(Appeals) relying on the Tribunal's decision dropped the proceedings against the respondents. Aggrieved from the said order, the revenue is before us.
3. Heard the Ld.AR for the department and perused the records.
4. We find that on the said allegation and on the basis of investigation conducted by the DRI, several show cause notices were issued all over India and in the case of Ajay Exports v. CC(Import), Mumbai [2016-TIOL-264-
CESTAT-MUM], this issue came up for consideration and this Tribunal after considering all the facts palced before it, observed as under:-
"10. On perusal of the records and hearing both sides, we find the issues which arise for determination in these appeal are
(a) Whether insurance documents can be relied upon for the loading the transaction value of the consignment/goods
(b) Whether the copies of documents export declarations submitted by the foreign supplier/exporter can be relied upon for enhancing transaction value
(c) Whether com trade, UK public ledger and like sources of the information can similarly eb used to enhance transaction value declared by the importer.
(d) Whether penalties need to be imposed on he appellants.
10.1 On consideration of the rival contentions and perusal of records, the following position emerges:
(a) The revenue relied upon copies of export invoices and declarations submitted by the suppliers/the exportes before the Turkish authorities. This is evident from reading of paragraphs 9.1.1.1 of the 2 nd corrigendum issued and the revenue has relied upon 18 (sic 16) bills of entry to charge undervaluation. A perusal of the letter dated 30/10/2009 addressed by first secretary, Moscow to the additional director general of DRI, seems to suggest that information regarding 3 Customs Appeal Nos. 75371, 75678-75680 of 2018 252 consignments in the form of comparative chart were given out of which 48 cases the declared value (at Turkish Port) match with the invoice value/transaction value and in 204 cases there was significant difference. The letter further states that an exercise of segregation and co-relating such documents would be needed. It is also seen that the comparative statement set to have been filed awarded is blacked out and most of the entries have been redacted and cannot be read. The revenue has not been able to explain this satisfactorily. It is settled law that in order to be admissible as evidence, the copies of foreign documents are required to be tested and signed by the Turkish Customs authorities which they were not. Further, it is settled law that the documents must bear the signature of the officers making the enquiries and be certified as true copies. It is to be noted that the originals have not been made available even to the Tribunal and unauthenticated and unsigned documents were relied upon, which could not be used, even if they may have been forwarded by „authorities‟ to the investigating agency through official channels. This law is settled by the Apex court in the case of East Punjab Traders (supra).
(b) As regards the insurance documents as well as entries from Comtrade and UK public ledger and other journals it is now well settled law that such information cannot be used to doubt or reject the transaction value. As regards the value on the insurance documents, Apex Court in the case of Orient Enterprises (supra), while affirming the judgement of the Tribunal; Christelle Violene (supra); Nina Chaka Pvt.Ld (supra) held that the value declared for insurance purposes by the exporter cannot be the basis for redetermination of the transaction value as the exporter may have declared higher value for insurance purposes which may not be the correct value. As regards the issue or reliance on com trade and public ledger for redetermination of value of the imported goods, this lies also well settled in the favour of the assessee in the case of Prabhu Dayal Premchand (supra); Jindal Strips Ltd. (supra) (etc as listed at paragraph No.3 at page 10) wherein the law has been clearly settled in favour of the appellant and we find strong force in the submissions made by the learned Counsel for appellant that on the issue in hand, the adjudicating authority has incorrectly relied upon the values of poppy seed‟s by considering the same from Comtrade and UK public ledger. In our view the finding on this point are incorrect and not in consonance with the settled law.
4Customs Appeal Nos. 75371, 75678-75680 of 2018
(c) We also note that the adjudicating authority has refused to look at other contemporaneous imports, which are not the subject matter of the present show cause notice on the ground that there was gross undervaluation being done by the trade. We find that if the value of contemporaneous imports were accepted and the transaction value in those case are not doubted by the revenue in the assessment orders, it is not understandable why the said values could not have been used for the purposes of comparing the same with the value of the consignments in question in these appeals. It is also said along that the Department has to first reject the transaction value and then follow the rules as laid down form rule 5 to 9 of the valuation rules in order to arrive at the value for discharge of Customs duty. From the entire records we find that this does not seem to have been done. In addition, we find that the documents which have come from the foreign source i.e. Indian embassy, Moscow cannot bring home the charge of undervaluation in the case of Bhatia Group as none of these documents which are relied upon and received from foreign source pertain to these groups; even as far as Ratan Lal Group is concerned these documents cannot be relied upon for the reasons set out hereinabove. 10.4 As we have disposed of the appeals on the factual findings, we are not recording any findings on other submissions made at by both sides. As we have disposed of the appeals on merits holding that the impugned orders are not sustainable, question of penalty on appellants does not arise."
5. As the said issue was examined by this Tribunal in the case of Ajay Exports and further in the case of Chirag International v. Commissioner of Customs [2019-TIOL-1279-CESTT-MUM], wherein again this Tribunal observed as under :-
"4. Heard both the sides and perused the records. We find that from the SCN it can be seen that the reason for issuance of the SCN is basically an alert from the DG Valuation. In our view, merely by an alert of DG valuation, SCN cannot be issued in mass to all the importers without investigating the fact of their declared value. Though in the subsequent inquiry, the department has found that as per the public ledger international price published therein is 3200 PMT FOB Turkey however as per the judgment of this Tribunal in the case of Ajay Exports (supra), the Tribunal has categorically held in the 5 Customs Appeal Nos. 75371, 75678-75680 of 2018 identical case that merely on the basis of international price published in the public ledge cannot be used for enhancement of the value. As regard the application of price of USD 2700 PMT on the basis of Bill of Entry of contemporaneous import, we find tha the bill of entry of Laxmi Trading Co. was relied upon wherein the 2700 PMT was enhanced price by the customer under the identical dispute. It is a settled law that for the purpose of contemporaneous price, the price which is under dispute and enhanced out of such dispute cannot be taken as price of contemporaneous goods. Only a price which declared by the assessee and accepted by the department, the bill of entry thereof can only be taken as price of contemporaneous goods. Moreover, the enhancement of the price in the case of Laxmi Trading Co., the case was before the Tribunal and the enhancement was set aside by the Tribunal in the case of Ajay Exports and others including the Laxmi Trading Co. (supra) therefore on both the count i.e. either the international price published in the public ledge or contemporaneous price of Laxmi Trading Co., the enhancement is incorrect and illegal. As regard the judgements relied upon by the Ld.AR, we find that the absolutely identical facts and law point in respect of the same case form the same country of origin has been decided by this Tribunal in the case of Ajay Exports and others, therefore, the facts of those cases relied upon by the AR is different from the case in hand, therefore, the judgments are not applicable. As per our above discussion, the enhancement of the price and consequential demand, interest etc. are not sustainable. Accordingly, the impugned order is set aside and appeal is allowed with consequential relief.
Therefore, the issue is no more res integra.
6. In view of this, we do not find any infirmity in the impugned order and the same upheld and the appeals filed by the revenue are dismissed.
(Dictated and pronounced in the open court.) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(Rajeev Tandon) Member (Technical) Pooja