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2017 (4) TMI 11 - AT - CustomsHigh Seas purchase - valuation - Palm Kernel Fatty Acid Distillate - what will be the price of the goods that should be adopted for determining assessable value, namely, the prices at which the Singapore supplier procured the goods or otherwise the price at which the said supplier invoiced the goods to the high seas buyer? - Held that - what was certified in the accompanying certificates of origin was only in respect of goods sold and invoiced by Kalmart Systems (Malaysia) and M/s. MAMBA SDN BHD (Malaysia) and not by Aavanti Industries (Singapore). These Certificates of Origin have further certified the Name of Signatory Company as M/s.Kalmart Systems, Malaysia and M/s.Mamba SDN BHD. If the importer wants the customs authorities to accept as genuine these certificates of origin as also the Bills of Lading, Packing List etc. certified therein, by implication, the invoices of Kalmart Systems (Malaysia) and MAMBA SDN BHD (Malaysia) who stand certified on those documents will only get credence and be accepted for the purpose of determining the transactions. The Invoice No.KSS01 9903/370 dt. 10-10-2003 of Kalmart Systems (Malaysia) for unit value of US 397.50 PMT and Invoice No.MA046/10103 dt. 14-10-2003 of Mamba Sdn Bhd (Malaysia) for unit value of USD 385.00 will have to be necessarily taken as the correct invoice and transaction value and consequently for determination of assessable value in respect of goods covered by B/E No.550460 and 551112 respectively. These would be the correct prices paid or payable for the purposes of Rule 4 (1) of the Customs Valuation Rules, 1988. Appeal dismissed - decided against appellant.
Issues Involved:
1. Misdeclaration of invoice values. 2. Determination of the correct transaction value for customs assessment. 3. Applicability of the Central Board of Excise & Customs Circular No.32/2004. 4. Confiscation of goods under Section 111(m) of the Customs Act, 1962. 5. Imposition of penalties under Section 112(a) of the Customs Act, 1962. Detailed Analysis: 1. Misdeclaration of Invoice Values: The Customs authorities observed discrepancies in the invoicing of goods imported by KSDL from Ruchi Soya. The invoice values declared in the Bills of Entry did not match those found in the documents obtained during the investigation. Specifically, the goods were invoiced by Malaysian suppliers to a Singapore intermediary at higher prices than those declared in the Bills of Entry submitted by KSDL. 2. Determination of the Correct Transaction Value for Customs Assessment: Upon investigation, it was found that the goods were directly shipped from Malaysia to India, bypassing Singapore, despite being invoiced through a Singapore intermediary. The adjudicating authority determined that the correct transaction values should be the prices at which the Malaysian suppliers sold the goods to the Singapore intermediary, not the lower prices declared by KSDL. This was based on the principle that the price actually paid or payable for the goods when sold for export to India should be considered for customs valuation. 3. Applicability of the Central Board of Excise & Customs Circular No.32/2004: The appellants argued that the high seas sales price should be accepted as per the CBEC Circular No.32/2004. However, the adjudicating authority noted that the circular requires the entire chain of documents to be furnished to establish the transaction value. The declared prices were found to be inconsistent with the original invoices, leading to the rejection of the declared transaction values under Rule 4(2) of the Customs Valuation Rules, 1988. 4. Confiscation of Goods under Section 111(m) of the Customs Act, 1962: The goods were confiscated under Section 111(m) of the Customs Act, 1962, due to misdeclaration of the value. The adjudicating authority confirmed the confiscation, as the investigation revealed that the declared values were significantly lower than the actual transaction values. 5. Imposition of Penalties under Section 112(a) of the Customs Act, 1962: Penalties were imposed on KSDL and Ruchi Soya under Section 112(a) of the Customs Act, 1962, for their involvement in the misdeclaration of the invoice values. The adjudicating authority found that the appellants had engaged in a deliberate attempt to underdeclare the value of the imported goods to evade customs duty. Conclusion: The Tribunal upheld the adjudicating authority's decision, confirming the rejection of the declared values, the determination of the correct transaction values based on the original supplier invoices, the confiscation of goods under Section 111(m), and the imposition of penalties under Section 112(a) of the Customs Act, 1962. The appeals were dismissed, and the impugned order was affirmed.
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