Custom, Excise & Service Tax Tribunal
Spartan International vs Commissioner, Customs-Patparganj on 11 March, 2024
CUSTOMS EXCISE & SERVICE TAX APPLELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. I
Customs Appeal No. 51537 of 2022
(Arising out of Order-in-Appeal No. CC(A)/Cus/D-II/ICD/PPG/1556/2020-21 dated
20.02.2021 passed by the Commissioner of Customs (Appeals), New Delhi)
M/s Spartan International ...Appellant
17/52, 1st Floor, Mall Road, Tilak Nagar
New Delhi - 110 018
versus
Joint Commissioner of Customs ...Respondent
ICD, Patparganj Delhi - 110 092 APPEARANCE:
Shri P.C. Patnaik and Shri Ramnesh Kumar Sahu, Advocates for the Appellant Shri M.K. Shukla, Authorised Representative of the Department CORAM: HON'BLE Mr JUSTICE DILIP GUPTA, PRESIDENT HON'BLE Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing: 27.02.2024 Date of Decision: 11.03.2024 FINAL ORDER No. 55122/2024 JUSTICE DILIP GUPTA M/s Spartan International1 has sought quashing of the order dated February 10, 2021 passed by the Commissioner of Customs (Appeals), New Delhi2 dismissing the appeal filed by the appellant to assail the order dated August 28, 2019 passed by the Joint Commissioner of Customs. The Joint Commissioner, by the said order, rejected the value of the goods declared in the Bill of Entry dated July 22, 2019 under rule 12 of Customs Valuation
1. The appellant
2. The Commissioner
2 C/51537/2022 (Determination of Value of Imported Goods) Rules, 2007 3 and re- determined the assessable value under rule 5 of the 2007 Valuation Rules.
2. The appellant imported various types of jackets and filed a Bill of Entry dated July 22, 2019 at Customs, ICD Patparganj, Delhi in which the value of the goods was declared as Rs. 1,01,78,142/-. The goods were purchased by the appellant from Xiamen, China, but they were supplied to the appellant by an overseas supplier of the appellant based in Hongkong. During investigation, it was observed that the goods were of better quality and the assessable value of the goods was higher than that declared by the appellant on comparison of the value with that of similar goods from the e-commerce sites. On being shown the value of the goods from the sites, the appellant in writing not only waived the issue of show cause notice and personal hearing, but also submitted a statement dated 23.08.2019 accepting the said value. This fact has been noticed by the Joint Commissioner in the order and the relevant portion of the order is reproduced below:
"Waiver of show cause notice & personal hearing"
1, Sanjay Kumar Bhatia, Aged 45 years, S/o Shri Nand Kishore Bhatia, R/o 24/2B, Tilak Nagar, New Delhi- 1100018, Prop. of M/s Spartan International office at 17/52, 1st Floor, Tilak Nagar, New Delhi- 110018, declared as follows:-
1. I/We request that the case may please be adjudicated without issuance of a written Show Cause Notice.
2. I/We have submitted my submission in my statement dated 23.08.2019.
3. the 2007 Valuation Rules
3 C/51537/2022
3. I/We wish/do not wish to be heard in person by the Adjudicating Authority.
Sh. Sanjay Kumar Bhatia of M/s Spartan International in his statement dated 23.08.2019 has confirmed that he do not want any personal hearing in the case and request for early decision."
3. The Joint Commissioner also noted in the order that the appellant accepted the value of the goods that was shown and explained to him. The Joint Commissioner also noted that despite being asked to produce the invoice of the manufacturer, the appellant did not produce the invoice. Accordingly, the Joint Commissioner rejected the value declared by the appellant under rule 12 and re- determined the same under rule 5 of the 2007 Valuation Rules. The relevant portion of the order dated August 28, 2019 passed by the Joint Commissioner is reproduced below:
"18. During investigation, the value of the goods similar to goods imported by the importer under the subject consignment were searched from the online e-commerce sites of China i.e. www.alibaba.com in respect of goods produced from Xiamen City, China and found that the value of the similar goods are in higher side in comparable quantities as comparison to the declared value of the imported goods. The same has been shown & explained to the importer and he has agreed with the value available.
19. Further during investigation, it was also revealed by the importer that the goods are of better quality and their assessable value would be of higher than the declared value in the import documents. I also observe that the importer failed to provide the manufacturer's invoice and any other documents in support of the declared value of the imported goods. Thus, I am inclined to reject the declared value i.e Rs 1,00,64,912/- of the goods imported by the
4 C/51537/2022 importer vide Bill of Entry No. 4173058 dated 22.07.2019 under Rule 12 of the Customs Valuation (Determination of Value of imported goods) Rules, 2007.
20. During investigation, the importer was asked to provide the Manufacturer's invoice for the subject consignment, but he was not able as he has imported the goods from trading firm based on Hongkong However, he admitted that the declared value of the imported goods were lower as compared to their actual value. He further accepted that actual assessable value of each type of imported goods are as under:-
S.No. Description of the Declared Re-assessed Items Price unit price Per Piece per Pcs.
(UCD) (USD) 1. Mens Polyester 4 13 Wind Jacket 2. Ladies Cotton 3.75 12 Woven wind Jacket 3. Mens PU Jacket 4.5 9 4. Mens Polyester 3.5 7.5 Knitted Jacket 5. Kids Jacket 2.5 4 20.1 xxxxxxxxx xxxxxxxxx xxxxxxxxx 21. I find that on comparison of the
contemporary data, the overall value of the goods is very low and hence the declared value does not appear to be the true transaction value of such goods under Rule 3 of the Customs Valuation Rules, 2007. The same is liable to be rejected under Rule 12 and re- determined under Rule 5 of the CVR, 2007. Therefore, the goods were under-valued, the goods are liable for confiscation under Section 111 (m) of the Customs Act, 1962 and penalty is imposable on the importer under Section 112 (ii) of the Customs Act, 1962.
22. Further I find that the importer also admitted that the assessable value of the 5 C/51537/2022 imported goods are on the lower side as compared to the declared value of the goods.
The imported goods were mis-declared as much as undervaluation of the goods by the importer made deliberately to evade customs duty, thus contravened the Provisions of Section 111 of the Customs Act, 1962 hence, the goods covered under the said bill of entry are, therefore liable for confiscation. Thus, the act of Shri Sanjay Kumar Bhatia has made him liable for penalty under section 112 of the Customs Act, 1962. He has knowingly and willingly submitted improper fact before the Customs. Goods were mis-declared knowingly & intently. The value of goods were also not declared properly. Penalty under Section 112 (a) (ii) is also imposable on Shri Sanjay Kumar Bhatia. Being a Proprietorship firm penalty cannot be imposed both on the firm and proprietor. Therefore I intend to impose penalty on the proprietor of the firm Shri Sanjay Kumar Bhatia under Section 112 of the Custom Act, 1962."
(emphasis supplied)
4. Feeling aggrieved, the appellant filed an appeal before the Commissioner (Appeals), which appeal has been dismissed by the order dated February 10, 2021 and the relevant portion of the order is reproduced below:
"5.2 I find that the appellant filed Bill of Entry No. 4173058 dated 22.07.2019 for Import of various types of jackets from China. On examination, the goods were found to be undervalued. Since the goods were imported from a trader, the appellant was asked to produce manufacturer's invoice which he failed to. I further note that the appellant had paid the duty on the enhanced value. Though afterwards they had intimated that they had accepted the enhancement under protest, it appears to be an after thought since they had paid the duty, redemption fine and penalty. The impugned order has clearly recorded in para 18 that the values of 6 C/51537/2022 similar goods were shown to the Appellant and he agreed with such values. Having agreed to the redetermination of value as explained by the department, it was not open for the Appellant to take a U-turn. It is also noted that the Appellant lodged protest after issuance of the impugned order, which clearly bring out his malafide as he could have lodged protest prior to impugned order. If they were not in agreement with department as stated in para 18 of the impugned order, he should not have waived the show cause notice and personal hearing. The act of waiver of show cause notice and personal hearing clearly indicate that the Appellant agreed with valuation done by the department."
(emphasis supplied)
5. Shri P.C. Patnaik, learned counsel assisted by Shri Ramesh Kumar Sahu, Advocate, appearing for the appellant submitted that the Joint Commissioner could not have re-determined the value solely on the basis of e-commerce site data. Learned counsel pointed out that Bill of Entry of contemporaneous import was not provided and that the statement was given by the appellant under duress. Learned counsel pointed out that there is a detailed procedure provided under the 2007 Valuation Rules for rejecting the declared value and re- determining it, but it was not resorted to by the Adjudicating Authority. Learned counsel also stated that duty on enhanced value was paid under duress.
6. Shri M.K. Shukla, learned authorized representative appearing for the department has, however, placed reliance upon the decision of the Tribunal in Commissioner of Customs, ICD Patparganj, Delhi vs. M/s Hanuman Prasad and Sons4 and submitted that the impugned order does not call for any interference. Learned authorized
4. 2021-TIOL-CESTAT-Del 7 C/51537/2022 representative submitted that once the appellant had waived the issuance of show cause notice and personal hearing and had also accepted the value of the goods indicated by the Joint Commissioner, it is not open to the appellant to now raise any issue regarding the valuation.
7. The submissions advanced by the learned counsel appearing for the appellant and the learned authorized representative appearing for the department have been considered.
8. 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 xxxxxx xxxxxx xxxxxx"
9. It would be seen that section 14 of the Customs Act provides that the value of the imported goods shall be the transaction value that is 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 8 C/51537/2022 behalf. The 2007 Valuation Rules have been framed in exercise of the powers conferred by section 14 of the Customs Act.
10. 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 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 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 -
9 C/51537/2022
(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."
11. 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 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 10 C/51537/2022 which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed.
12. It would also be useful to reproduce the relevant portion of section 17 of the Customs Act and it is as follows:
"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, selfassess 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 subsection (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 subsection (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 subsection (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 11 C/51537/2022 on the reassessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be."
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. Subsection (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 re- assessment in writing. Thus, if the importer confirms his acceptance of the re-assessment in writing, a speaking order is not required to be passed.
14. In the present case, it is clear from the order passed by the Joint Commissioner that the appellant had in writing submitted that the matter may be adjudicated without issuance of show cause notice and the appellant did not desire to be heard in person. The appellant had also submitted a written statement dated August 23, 2019. Though the said statement dated August 23, 2019 has not been filed by the appellant, but from the order passed by the Joint Commissioner it clearly transpires that the appellant had in the said statement accepted the actual assessable value of each of the five types of jackets that were imported and this fact has been recorded in paragraph 20 of the order.
15. As noticed above, the proper officer doubted the truth or accuracy of the value declared by the appellant for the reason that contemporaneous data available from the e-commerce sites had a 12 C/51537/2022 significantly higher value. It was open to the appellant to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared and seek a reasonable opportunity of being heard, but the appellant did not do so. On the other hand, the appellant submitted in writing that though it had declared the value of the imported goods at a particular price, but on being shown contemporaneous data, it agreed that the value of the goods should be enhanced to that value indicated by the proper officer. The appellant also specifically stated that it did not want any show cause notice to be issued or personal hearing to be provided or a speaking order to be passed on the Bill 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 17(5) of the Customs Act requires a speaking order to be passed on the Bills of Entry, except in a case where the importer/exporter confirms the acceptance in writing.
16. 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 2007 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 13 C/51537/2022 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.
17. Explanation (1)(i) to rule 12 of the 2007 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.
18. In Century Metal Recycling Pvt. Ltd. vs. Union of India5, the Supreme Court summarized the provisions of rule 12 of the 2007 Valuation Rules and the observations are as follows:
"15. The requirements of Rule 12, therefore, can be summarised as under:
(a) The proper officer should have reasonable doubt as to the transactional value on account of truth or accuracy of the value declared in relation to the imported goods.
(b) Proper officer must ask the importer of such goods further information which may include documents or evidence.
(c) On receiving such information or in the absence of response from the importer, the proper officer has to apply his mind and decide whether or not reasonable doubt as to the truth or accuracy of the value so declared persists.
(d) When the proper officer does not have reasonable doubt, the goods are cleared on the declared value.
(e) When the doubt persists, sub-rule (1) to Rule 3 is not applicable and transaction value is determined
5. 2019 (367) ELT-(SC) 14 C/51537/2022 in terms of Rules 4 to 9 of the 2007 Rules.
(f) The proper officer can raise doubts as to the truth or accuracy of the declared value on certain reasons which could include the grounds specified in clauses (a) to (f) in clause (iii) of the Explanation.
(g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested.
(h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules.
16. Proper officer can therefore reject the declared transactional value based on certain reasons to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression grounds for doubting the truth or accuracy of the value declared has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the reason to doubt exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared."
19. Despite the specific statement made by the appellant that it did not require any show cause notice to be issued or personal hearing being granted and that the value indicated by the Joint Commissioner was acceptable to it, it was sought to be contended by the learned counsel for the appellant that the transaction value of the imported goods alone should have been treated to be the value of the goods, as provided for under rule 3(1) of the Valuation Rules, since none of 15 C/51537/2022 the conditions stipulated in the proviso to sub-rule (2) of rule 3 were attracted and in any case, if the declared value could not be determined under sub-rule (1) of rule 3, it was required to be determined by proceeding sequentially through rules 4 to 9.
20. Rule 3 of the 2007 Valuation Rules is, therefore, reproduced below:
"Rule 3. Determination of the method of
valuation.-
(1) Subject to rule 12, the value of imported goods
shall be the transaction value adjusted in accordance with provisions of rule 10;
(2) Value of imported goods under sub-rule (1) shall be accepted: Provided that -
(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which -
(i) are imposed or required by law or by the public authorities in India; or
(ii) limit the geographical area in which the goods may be resold; or
(iii) do not substantially affect the value of the goods;
(b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued;
(c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and
(d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below:
(3) xxxxxxxx xxxxxxxxx xxxxxxxxx (4) If the value cannot be determined under the provisions 16 C/51537/2022 of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9."
21. The very fact that the appellant had agreed for enhancement of the declared value in the statement submitted to the assessing authority, itself implies that the appellant had not accepted the value declared by it in the Bill of Entry. The value declared in the Bill of Entry, therefore, automatically stood rejected. Further, once the appellant 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 2007 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 rules 4 to 9. As noticed above, the appellant had accepted the enhanced value. 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 2007 Valuation Rules sequentially.
22. The aforesaid views find support from the decision of the Tribunal in Hanuman Prasad & Sons6.
23. In this connection, it would also be useful to refer to a decision of the Tribunal in Advanced Scan Support Technologies vs. Commissioner of Customs, Jodhpur7, wherein the Tribunal, after making reference to the decisions of the Tribunal in Vikas Spinners
6. 2020 (12) TMI 1092-CESTAT, New Delhi
7. 2015 (326) ELT 185 (Tri.-Del) 17 C/51537/2022 vs. Commissioner of Customs, Lucknow8 and Guardian Plasticote Ltd. vs CC (Port), Kolkotta9 , held that as the appellant therein had expressly given consent to the value proposed by the department and stated that it did not want any show cause notice or personal hearing, it was not necessary for the department to establish the valuation any further as the consented value became the declared transaction value requiring no further investigation or justification. Paragraph 5 of the decision is reproduced below:
"5. We have considered the contentions of both sides. We find that whatever may be the reasons, the appellant expressly gave its consent to the value proposed by Revenue and expressly stated that it did not want any Show Cause Notice or personal hearing. Even the duty was paid without protest. By consenting to enhancement of value and thereby voluntarily foregoing the need for a Show Cause Notice, the appellant made it unnecessary for Revenue to establish the valuation any further as the consented value in effect becomes the declared transaction value requiring no further investigation or justification. To allow the appellant to contest the consented value now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no Show Cause Notice, could/would have invited allegation of harassment and delay in clearance of goods. When Show Cause Notice is expressly foregone and the valuation is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been
8. 2001 (128) E.L.T. 143 (Tri.-Del.)
9. 2008 (223 E.L.T. 605 (Tri.- Kol.)
18 C/51537/2022 consented, the onus will be on the appellant to establish that the valuation as per his consent suffered from fatal infirmity and such onus has not been discharged. Further, valuation of such goods requires their physical inspection and so reassessment of value in the absence of goods will not be possible. The case of Eicher Tractors v. Union of India (supra) cited by the appellant is not relevant here as in that case there was no evidence that the assessee had consented to enhancement of value."
(emphasis supplied)
24. In Vikas Spinners, the Tribunal dealing with a similar situation, observed as under:
"7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry dated 7-5- 1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5- 1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally stopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images, (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the 19 C/51537/2022 loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly."
(emphasis supplied)
25. In Guardian Plasticote., the Tribunal after placing reliance on the decision of the Tribunal in Vikas Spinners, also observed as follows:
"4. The learned Advocate also cites the decision of the Tribunal in the case of M/s. Vikas Spinners v. C.C., Lucknow10 - in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is stopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had lodged any protest and on the contrary their letter dated 21-4-1999 clearly points to acceptance of the enhanced value by them, the cited decision advances the cause of the department rather than that of the Appellants contrary to the claim by the learned Counsel."
(emphasis supplied)
26. In BNK Intrade (P) Ltd. vs. Commissioner of Customs, Chennai11 , the Tribunal observed as follows:
"2.............. It is also to be noted that the importer had also agreed for enhancement of the price based on contemporaneous prices available with the Department. We, therefore, find no merit in the contention raised in the appeal challenging the valuation and seeking the refund of the differential duty paid by the appellants on enhancement."
10. 2001 (128) E.L.T. 143 (Tri.-Del.)
11. 2002 (140) E.L.T. 158 (Tri.-Del.) 20 C/51537/2022
27. The following position emerges from the aforesaid decisions of the Tribunal:
(i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation;
(ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and
(iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted.
28. What, therefore, follows is that once the appellant had accepted the enhanced value, it was not necessary for the department to determine the valuation as the consented value, in effect, became the declared transaction value. Further, once the appellant accepted the enhanced value it would not be open to the appellant to now contend that the procedure as contemplated under rule 12 of the 2007 Valuation Rules should have been complied with.
29. Learned counsel for the appellant submitted that the duty was paid by the appellant under protest and for this purpose the learned counsel pointed out that the customs duty was paid on the same date the letter was written by the appellant.
30. It is not possible to accept this submission of learned counsel for the appellant. It clearly transpires from the records that the appellant had accepted the value and had paid the excise duty. The Commissioner (Appeals) clearly noted this fact and observed that the appellant submitted the letter accepting the enhancement under 21 C/51537/2022 protest after depositing the duty and the contention appeared to be an afterthought after payment of duty, redemption fine and penalty. Ofcourse, the letter could have been submitted on the same date the duty was paid.
31. The appellant had procured the goods from an overseas supplier based in Hongkong. The appellant, on being asked by the adjudicating officer, did not also produce the manufacturer invoice or the sale price. The invoice of the manufacture would have clearly indicated whether the appellant, for ulterior motives, had purchased the goods for a lesser price from the supplier based in Hongkong to evade payment of duty. The Adjudicating Officer had re-determined the value of the imported goods, not only because the appellant had accepted the value but also because of the contemporaneous data available on the e-commerce sites. When this price available on the sites was shown to the appellant, the appellant submitted a statement that the said price was acceptable to it.
32. The Adjudicating Officer has given detailed reasons for rejecting the transaction value under rule 12 and re-determining it under rule 5 of the 2007 of the Valuation Rules.
33. The judgment of the Supreme Court in Commissioner of Customs (Imports), Mumbai vs. Ganpati overseas and Another12 relied upon by learned counsel for the appellant would not come to the aid of the appellant. This was not a case where the importer had in writing accepted the value of the imported goods. In fact, a show cause notice had been issued and, thereafter, proceedings were initiated, unlike the present case where the
12. (2023) 10 Supreme Court 484 22 C/51537/2022 appellant had waived the issuance of the show cause notice as also personal hearing.
34. The judgment of the Supreme Court in The State of Punjab vs. Barkat Ram13 would also not come to aid of the appellant. The issue involved was whether a customs officer would be a police officer within the meaning of that expression in section 25 of the Indian Evidence Act.
35. It is also not possible to accept the contention of the learned counsel for the appellant that duty was paid under duress. This objection had not been raised earlier and even otherwise there is no merit in this objection. If it was under duress, the appellant would not have paid the duty voluntarily without raising an objection.
36. Thus, for all the reasons stated above, it is not possible to accept the contention raised by learned counsel for the appellant. There is no merit in this appeal and it is dismissed.
(Order Pronounced on 11.03.2024) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER(TECHNICAL) Golay, Jyoti
13. (1962) 3 SCR 338