2017 (2) TMI 421 - AT - Customs

Valuation - rejection of declared value u/r 10 of the Customs Valuation Rules, 1988 - application of Rule 6 - valuation done on the basis of contemporaneous price of similar goods - Held that - the invoices produced by the appellant at the time of assessment are not genuine documents. Furthermore, the quantities mentioned in the Air Way Bill and the invoices of K Line Air Services (Hong Kong) Ltd. do not match with quantities and description given by the appellants in their declaration before the Revenue. The invoices produced by the appellants are not genuine and therefore, the same was to be rejected outright. Once the invoices produced by the appellants are rejected, the only alternate is to rely on the documents recovered from the Hong Kong Government. The Commissioner has taken the value declared in the corresponding invoices of K Line Air Services (Hong Kong) Ltd. as the assessable value while doing this he has given suitable adjustments after examining the contemporaneous imports of similar goods in terms of Rule 6 of the Customs Valuation Rules. Appeal rejected - decided against appellant.

Summary

Issues Involved:
1. Authenticity of invoices and documents produced by the appellant.
2. Discrepancies in the documents and invoices.
3. Valuation of imported goods and application of Customs Valuation Rules.
4. Contemporaneous imports and their relevance.
5. Bank records and remittance proofs.
6. Confiscation and imposition of redemption fine and penalty.

Issue-wise Detailed Analysis:

1. Authenticity of Invoices and Documents Produced by the Appellant:
The appellants imported watch modules and provided invoices and documents for customs assessment. However, discrepancies were noted in the documents, and the authenticity was questioned. Citizen Watch Co. Ltd. confirmed that the invoices and offer letters provided by the appellant were not issued by them, and the forms used were different from their original invoices. This raised doubts about the genuineness of the documents submitted by the appellant.

2. Discrepancies in the Documents and Invoices:
Several discrepancies were found in the documents submitted by the appellant:
- The address on the manufacturer’s catalogue differed from the letterhead of Citizen Watch Co. Ltd.
- Telex numbers and signatures on the documents did not match.
- Spelling errors in the word "Japanese" were noted.
- Differences in the text and format of the photocopy of the letter dated 12/06/2002 compared to the original.
- Inconsistent naming conventions for Citizen Watch Co. Ltd.

3. Valuation of Imported Goods and Application of Customs Valuation Rules:
The declared value of the imported goods was rejected under Rule 10 of the Customs Valuation Rules, 1988, and Rule 6 was applied to re-fix the assessable value. The assessments were finalized under Section 18(2) of the Customs Act, and the differential duty was demanded. The goods were ordered to be confiscated under Section 11M of the Customs Act, with a redemption fine of ?4.00 crore imposed. A penalty equal to the duty demanded was also imposed under Section 112 of the Customs Act.

4. Contemporaneous Imports and Their Relevance:
The appellant argued that the contemporaneous imports of identical goods should be considered for assessment. However, the Tribunal found that the invoices and contract documentation produced by the appellant were suspected documents. Therefore, the final assessment of bill of entry No.457430 could not be treated as contemporaneous imports of identical goods.

5. Bank Records and Remittance Proofs:
The appellant failed to produce complete bank records of the remittance made. Although some TT documents were produced, it was not sufficient to prove that all payments were made. The invoices issued by K Line Air Services (Hong Kong) Ltd. indicated that they also received payments in advance, which the appellant did not fully account for.

6. Confiscation and Imposition of Redemption Fine and Penalty:
Given the discrepancies and the rejection of the invoices produced by the appellant, the Tribunal upheld the confiscation of the goods and the imposition of a redemption fine and penalty. The documents recovered from the Hong Kong Government were relied upon for assessment, and the Commissioner made suitable adjustments after examining contemporaneous imports of similar goods.

Conclusion:
The Tribunal found no merit in the appeal and rejected it, upholding the decision of the lower authorities. The discrepancies and lack of genuine documentation led to the rejection of the declared value and the imposition of penalties and fines. The judgment emphasized the importance of authentic and accurate documentation in customs assessments.