Custom, Excise & Service Tax Tribunal
Sayo Traders Private Limited vs -Kolkata(Port) on 19 November, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Customs Appeal No. 75426 of 2021
(Arising out of Order-in-Appeal No. KOL/CUS(PORT)/AKR/218/2021 dated
02.03.2021 passed by the Commissioner of Customs (Appeals), 3 rd Floor, 15/1,
Strand Road, Kolkata - 700 001)
M/s. Sayo Traders Private Limited : Appellant
1780, Rajdanga Main Road,
Block ED, Plot 116,
Kolkata - 700 078
VERSUS
Commissioner of Customs (Port) : Respondent
Custom House, 15/1, Strand Road,
Kolkata - 700 001
APPEARANCE:
Shri R.N. Bandyopadhyay, Advocate for the Appellant
Shri Faiz Ahmed, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO. 77580 / 2024
DATE OF HEARING / DECISION: 19.11.2024
ORDER:[PER SHRI R. MURALIDHAR] The facts of the case are that the appellant had imported Fuel Filters and other filters from China vide the Bill of Entry No. 5660719 dated 20.03.2018. As per the self-assessed Bill of Entry filed, they had declared the value of the goods as Rs.16,48,029/- and duty thereon as Rs.4,76,640/-
1.1. The consignment was ordered for examination and thereafter, it was found that the goods were of a much better quality i.e., made in Germany, South Korea, etc. Based on these findings, the value was Page 2 of 6 Appeal No.: C/75426/2021-DB enhanced and additional duty of Rs.25,23,360/- was demanded.
2. The importer/appellant vide their letter dated 14.06.2018 replied stating that the goods were manufactured in China, but were compatible with the Volvo, Deutz, Komatsu, Hyundai, etc., brand equipment; as per requests of importers, the brand name and country of origin were mentioned in these filters. After this, the importer requested for re- examination by a technical expert.
2.1. As per their request, a DGFT-approved Chartered Engineer was appointed to examine the goods, who has given his report stating that the "goods are new/unused" and the brand of fuel filters, oil filters and fuel water separators pertained to brands like Komatsu, Deutz, Volvo, etc.; the countries of origin is mentioned in these filters are Thailand, Germany, China, Korea, etc. He estimated the value of the goods to be of USD 161746.43 (FOB). As per the declaration filed by the appellant, the value of the said goods was USD 25046.09.
3. A Show Cause Notice was issued on 13.11.2018 to re-determine the value of the goods at Rs.1,08,14,630/- and to demand Customs Duty thereon amounting to Rs.25,22,796/-, along with interest and penalty. A proposal for confiscation of the goods was also made in the Notice, in terms of Section 111(m) of the Customs Act, 1962.
4. After due process, the ld. adjudicating authority vide the impugned order held that the value of the consignment has to be taken as USD 161747.40 in terms of Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, Page 3 of 6 Appeal No.: C/75426/2021-DB 2007. He has also confiscated the goods under Section 111(m) of the Customs Act, 1962, giving an option to redeem the same on payment of redemption fine of Rs.20,00,000/- in terms of Section 125 of the Act. A penalty of Rs.2,50,000/- was also imposed on the appellant.
4.1. Being aggrieved, the appellant is before the Tribunal.
5. The Ld. Advocate appearing on behalf of the appellant submits that the proper procedure in terms of the Customs Valuation Rules has not been followed for arriving at the enhanced value of the consignment. He submits that it is a fact borne on record that the overseas exporter had sent an e-mail stating that the goods were of Chinese origin and were not manufactured in other countries such as Thailand, Germany, Korea, etc., as is being claimed by the Revenue. Therefore, it is his contention that the enhanced value adopted by the Revenue is legally not tenable.
5.1. The Ld. Advocate for the appellant prays that the impugned order be set aside in toto and the present appeal be allowed.
6. The Ld. Authorized Representative of the Revenue takes us through the detailed findings given by the ld. adjudicating authority in the impugned order. He points out that, at the initial stage itself, after examination by the Customs Officials, the appellant had volunteered to pay the differential duty of Rs.25,23,360/- to clear the goods; as an afterthought, after receiving the e-mail from the Chinese exporter, they have sought re-examination of the goods by a Chartered Engineer; as per their Page 4 of 6 Appeal No.: C/75426/2021-DB request, a proper Chartered Engineer approved by the DGFT was appointed, who after thorough examination of the consignment has arrived at the value of the consignment as USD 161746.43. It is contended that, on the other hand, the appellant has mis-declared the value at a lower rate of USD 25046.09.
6.1. The Ld. Authorized Representative of the Revenue also submits that on examination of the goods, it was found that the goods were of foreign brands like Komatsu, Deutz, Volvo, etc., and therefore, it was gathered that the said filters are compatible with the equipments manufactured by these reputed manufacturers; hence, their value would be much more than what the importer had declared. He therefore submits that the Revenue has not contravened any of the provisions of the Customs Valuation Rules while arriving at the enhanced value of the impugned goods as has been claimed by the appellant.
6.2. Accordingly, he justifies the order passed by the ld. adjudicating authority.
7. Heard both sides, perused the appeal papers and considered the arguments adduced by both the sides.
8. We find that there is no dispute as to the fact that the filters carried the brand names of reputed parties such Komatsu, Deutz, Volvo, etc., along with the countries of origin embossed as 'Germany', 'Korea', etc. This basically would allow the importer to sell these filters to buyers who want to replace these filters with the original branded filters. Hence, we find that the value as shown in the invoice of the Chinese exporter cannot be accepted prima facie.
Page 5 of 6Appeal No.: C/75426/2021-DB 8.1. The importer himself had volunteered to pay the differential Customs Duty of Rs.25,23,360/- as per the enhanced value arrived at by the Customs officials, but subsequently appears to have changed their stand and sought re-examination of the goods by the Chartered Engineer. There is nothing on record to indicate that the Chartered Engineer, who was also duly approved by the DGFT, has committed any mistake in examining the subject consignment and arriving at the value. Therefore, we do not find any merit in the arguments adduced by the appellant that the Revenue has not followed the proper procedure while enhancing the value.
9. Therefore, we hold that the lower authorities have correctly arrived at the value as per which the appellant would be required to pay Rs.25,23,360/- (as per the original estimate of the Customs officials).
9.1. However, since it was not a very serious contravention by the appellant and initially, they were even ready to pay the differential duty arising thereon and further were also ready to re-export the consignment for which they had given a written request, we find that confiscation of the goods is not warranted. Accordingly, we set aside the said order of confiscation and consequently, the redemption fine imposed also stands set aside.
9.2. We also set aside the penalty of Rs.2,50,000/- imposed on the appellant.
9.3. We give an option to the appellant to pay the differential Customs duty of Rs.25,23,360/-, along with interest, to clear the consignment.
Page 6 of 6Appeal No.: C/75426/2021-DB
10. Thus, the appeal stands allowed partly.
(Dictated and pronounced in the open court) Sd/-
(R. MURALIDHAR) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd