Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Tuticorin vs M/S. Smbj Impex Pvt. Ltd on 6 November, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal Nos. C/135, 136 and 322/2009
(Arising out of Order-in-Appeal No. 6/2009 dated 27.1.2009; No.12/2009 dated 30.1.2009 and No.61/2009 dated 30.6.2009 all passed by the Commissioner of Customs and Central Excise (Appeals), Trichy)
Commissioner of Customs, Tuticorin Appellant
Vs.
1. M/s. SMBJ Impex Pvt. Ltd.
2. A.G. International
3. DCP Synthetics Pvt. Ltd. Respondents
Appearance Shri K. Veerabhadra Reddy, JC (AR) for the Appellant Shri B. Satish Sundar and Dr. S. Krishnanandh, Advocates for the Respondents CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 06.11.2017 Final Order Nos. 42721-42723 / 2017 Per Bench The issue involved in the above three appeals being the same as well as the facts being identical, the same were heard together and are disposed by this common order.
2 The respondents imported PU Coated Fabrics and filed Bill of Entry through Tuticorin Port. The Bills of Entry were assessed provisionally on the basis of an Alert Circular issued by DRI, New Delhi. As such, consignments were released provisionally upon furnishing of bond with bank guarantee. The case of the department is that, vide DRI Alert Circular, DRI informed that during the course of search of an importer Shri Rajkumar Anand, laptop was recovered along with various incriminating documents. On scrutiny of the said laptop, it was found that mixed lots of PU leather cloth fabrics having different thickness varying from 0.6 mm to 1.5 mm were being imported but in majority of the import declarations, the thickness was declared to be lower and thus there was evasion of customs duty. Thus, the imports made by the respondents were brought within the scrutiny. The department after issuing show cause notice and after due process of law, rejected the transaction value declared by the respondents and enhanced the same. The respondents being aggrieved by the enhancement of value and demand of differential duty, approached the Commissioner (Appeals), by filing an appeal and vide impugned orders herein, the Commissioner (Appeals) set aside the enhancement of value as well as the demand of differential duty. Hence the department has filed these appeals.
3. On behalf of Revenue, ld. AR Shri K. Veerabhadra Reddy reiterated the grounds of appeal. He submitted that the Commissioner (Appeals) has set aside the enhancement of value mainly on three grounds:-
(a) That there is no ground put forward by the department for rejecting the transaction value;
(b) There is no allegation that the buyer is related to seller and therefore Rule 7A cannot be invoked without first excluding Rules 5 to 8 with valid reasons;
(c) The enhancement of value is merely based on NIDB data.
He submitted that the imports were taken up for scrutiny on the basis of DRI Alert Circular which was relating to import of PU Coated Fabrics. Thus, there was reasonable ground for the department to reject the transaction value declared by the respondents. In paras 15 to 17 of the Order-in-Original, the original authority has discussed the grounds on which the transaction value was held to be not acceptable. It was seen that the supplies are from China origin and sales register of the import for relevant period showed that there was cash sale for even more than Rs.20,000/- in each transaction / invoice and invoice in respect of credit sale did not indicate the full address of the customer. This created a doubt about the genuineness of sales transaction in respect of sales price. It was also noticed by the original authority that cash sales was for large amount and credit sales was without detail address of the customer, there is no scope to accept the contention of the respondent that the declared value is true and correct. At the same time, some of the importers who had imported identical goods through Tuticorin Port had voluntarily discharged the enhancement value determined by the department. Thus, it can be safely concluded that the value declared by the respondent is not true transaction value. The department has therefore correctly enhanced the value on the basis of NIDB data available. That the Commissioner (Appeals) has erred in setting aside the enhancement of value and demand of differential duty.
4. On behalf of the respondents, ld. counsel Shri B.Satish Sundar and Dr. S. Krishnanandh argued the matter. They strongly argued that the department has rejected the transaction value without any ground and the enhancement is done on the basis of NIDB data which has been held in various decisions to be not acceptable for enhancement of declared value. The ld. counsel submitted that on similar set of facts, in regard to import of PU Coated fabrics itself, the Tribunal in the case of Commissioner of Customs, New Delhi Vs. DM International 2013 (289) ELT 169 (Tri. Del.) had held that department cannot enhance the value on the sole basis of NIDB data. He has also relied upon the decision of the Tribunal in the case of Commissioner of Customs, New Delhi Vs. Polyglass Acrylic Mfg. Co. Ltd. 2014 (301) ELT 545. It is also submitted that this Tribunal in the case of KPH Impex Pvt. Ltd. Vs. Commissioner of Customs, Chennai vide Final Order No. 41995/2017 dated 6.9.2017 had taken similar view observing that the declared value cannot be enhanced merely on the basis of NIDB data.
5. Heard both sides.
6. The ld. AR has vehemently argued that enhancement was on the basis of DRI Alert Circular and therefore there were reasons to believe that the declared value is not correct. On going through the facts of the case as well as the submissions made by both sides, the declared value has been rejected on mere assumptions and presumptions. The department has not been able to adduce any cogent evidence for holding that the declared transaction value is not correct. The Commissioner (Appeals) in para 4.6 has rightly discussed that there is no allegation in the present case that the buyer is related to seller and therefore Rule 7A cannot be invoked without first excluding Rules 5 to 8 with valid reasons. Further, in para 4.11, he has observed that it is established principles of law that suspicion however grave cannot stand the place of proof. That no inquiry was conducted with regard to undervaluation in the case of the respondents. Further, there is no evidence of contemporaneous imports put forward so as to hold that the respondents have declared incorrect transaction value. The department has failed to prove that the goods imported by the respondents are of the same quality of the goods referred in the DRI Alert Circular. That being so, the rejection of transaction value is not acceptable. Further, the enhancement is solely based on the NIDB data. The Tribunal in the various decisions relied by the ld. counsel for the respondent has held that value cannot be enhanced merely on the basis of NIDB data. Ld. AR has made an effort to argue that the said decisions are not applicable to the facts of the present case, since the facts of the case are different. We find that the ratios laid down in the said decisions are squarely applicable to the issue under consideration. The Tribunal in the said judgment has categorically held that NIDB data cannot be a basis for enhancement of declared value. Following the same, we are of the opinion that the impugned orders call for no interference and the appeals filed by the Revenue are dismissed.
(Operative portion of the order was
pronounced in open court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex
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