2019 (11) TMI 1289 - AT - Customs

Under-valuation of imported goods - Demand of differential customs duty - demand based on load port documents - HELD THAT - It is undisputed fact that the said documents were not authenticated by either the overseas exporters or the Overseas Customs Organizations - in view of the finding of this Tribunal in the case of RAMKRISHNA SALES PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD 2007 (5) TMI 233 - CESTAT AHMEDABAD the impugned order is not sustainable in respect of goods imported through 13 Bills of Entries where allegations were made on the basis of load port documents. In the present case also there is no other evidence on record showing payment of higher value to the foreign suppliers. Further, the value has been enhanced on the basis of photocopies of documents obtained from the overseas shipping lines - the findings of Original Authority in respect of goods imported through 13 Bills of Entry are not sustainable - the impugned order in respect of goods imported through the 13 Bills of Entry set aside. Demand of differential duty - Goods imported through 365 Bills of Entries - it appeared to revenue that in respect of 365 consignments imported by the present appellants during the above stated period there was undervalued and by adopting the value discovered during the investigation in respect of goods imported by Shri Vishal Madan differential Customs duty appeared to be recoverable from the present appellants was computed - HELD THAT - There is no discussion as to how the goods imported by Shri Vishal Madan are similar goods to the goods imported by present appellants - It is very clear through the allegations made in the show cause notice and findings of Original Adjudicating Authority that Revenue nowhere established that the goods imported by Shri Vishal Madan and the goods imported by the appellants were similar goods since no such description and discussion has been recorded in the impugned order. The findings of Original Authority in respect of consignments cleared through said 365 Bills of Entry are not sustainable since the same are not based on evaluation of evidence - the impugned order in so far as the same is concerned with imports through said 365 Bills of Entry in respect of enhancement of value, confirmation of differential Customs duty, order to pay interest, confiscation of said goods and penalties imposed including personal penalties is set aside. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Admissibility of load port documents as evidence.
2. Determination of value for import consignments based on similar goods.
3. Imposition of differential customs duty, interest, and penalties.
4. Confiscation of goods.

Detailed Analysis:

1. Admissibility of Load Port Documents as Evidence:

The primary issue was whether the load port documents obtained from shipping companies, which were unauthenticated photocopies, could be used as evidence for undervaluation of goods. The appellants argued that these documents were not confirmed by the overseas suppliers or Customs Department, making them inadmissible. They cited the Tribunal's decision in the case of M/s Ramkrishna Sales Pvt. Ltd., which held that enhancement of values based on unauthenticated documents is not sustainable.

The Tribunal agreed with the appellants, referencing the Ramkrishna Sales Pvt. Ltd. case, and concluded that the impugned order was not sustainable for the 13 consignments based on these unauthenticated load port documents. The Tribunal emphasized that there was no other evidence showing payment of higher value to the foreign suppliers.

2. Determination of Value for Import Consignments Based on Similar Goods:

The second issue involved the determination of value for 365 consignments based on the values of similar goods imported by another importer, Shri Vishal Madan. The appellants contended that the Customs Valuation Rules, 2007, require similar goods to have like-characteristics and be commercially interchangeable. They argued that the Original Adjudicating Authority did not establish how the goods imported by Shri Vishal Madan were similar to those imported by the appellants.

The Tribunal noted that the show cause notice and the Original Adjudicating Authority's findings lacked any discussion or evidence establishing the similarity between the goods imported by Shri Vishal Madan and the appellants. Consequently, the Tribunal held that the findings regarding the 365 consignments were not sustainable as they were not based on a proper evaluation of evidence.

3. Imposition of Differential Customs Duty, Interest, and Penalties:

The Tribunal found that the differential customs duty demanded for the 13 consignments based on unauthenticated load port documents was not justified. Similarly, for the 365 consignments, the Tribunal held that the enhancement of value and the consequent confirmation of differential customs duty were not sustainable due to the lack of evidence establishing the similarity of goods.

Since the Tribunal set aside the differential duty demands, it also concluded that the imposition of interest and penalties, including personal penalties on the appellants, was not warranted.

4. Confiscation of Goods:

The Tribunal addressed the issue of confiscation of goods, which was ordered by the Original Adjudicating Authority. Given that the Tribunal found the enhancement of value and the confirmation of differential customs duty to be unsustainable, it also set aside the order for confiscation of the goods.

Conclusion:

The Tribunal set aside the impugned order in its entirety, including the enhancement of value, confirmation of differential customs duty, order to pay interest, confiscation of goods, and imposition of penalties. All the appeals were allowed.

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