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2023 (10) TMI 362 - AT - CustomsValuation of imported goods - Correctness of valuation by the Government approved valuer of Natural Rough Emerald - imposition of redemption fine - rejection of declared value on the ground that undeclared Natural Rough Diamond were found during the examination of the import consignment - HELD THAT - No cogent reason has been given by the revenue for rejection of the transaction value. The learned counsel for the appellant has argued that the valuation has been done by so called Government approved valuer Shri Kamal Kant Parekh, who did not figure in the list of the Government approved valuers as intimated vide Public Notice no.03/2022 dated 08.03.2022. On perusal of the contents of the aforesaid Public Notice and it is found that it lists names of 29 members of the Gems and Jewellery Export Promotion Council, Jaipur/Regional Jewellers Association empanelled for the purpose of identification, classification, purity, weight and valuation of precious/semiprecious stones, pearls as well as gold/silver and jewellery for customs purposes. No valuer can give exact valuation of rough precious stones at any stage of time, however an expert the valuer may be. Generally, the prices are given with a margin of fluctuation of /- 20% and the value declared by the appellant was well within this range. It has further been contended that the valuation report of the said Government approved valuer does not specify whether the rate is wholesale or retail sale value or the CIF value. Further, during the course of investigation itself, it has been observed that the valuation cannot be determined under Rules 4 to 7 of Customs Valuation Rules, 2007 as the nature of each stone and its value is distinct and varied, and even the market value cannot be ascertained. Consequently, other than the valuation report submitted by the valuer who does not appear in the panel of Government approved valuers, and there being no other corroborative evidence to establish any undervaluation by the appellant, the transaction value is liable to be accepted. The Department has failed to prove that the transaction value/invoice price was incorrect. Consequently, the valuation done by the valuer cannot accepted and is set aside. Imposition of Rs 50 lakh as Redemption fine on the said goods under Section 111 read with Section 118(a) and 119 of the Customs Act, 1962 - HELD THAT - There is no prohibition in the import of such Natural Rough Emerald. Therefore, the provisions of Section 111(d) is not attracted. It is an admitted fact that 3 packets of Natural Rough Diamonds were found along with the Natural Rough Emerald, which had not been declared by the appellant. As the said diamonds was not accompanied by the KP Certificate, the said goods took on the nature of prohibited goods - there is no case for imposition of Rs. 50 lakh as redemption fine on the Natural Rough Emerald. Imposition of redemption fine on the undeclared Natural Rough Diamonds - HELD THAT - The original adjudicating authority has gone on to confiscate the Natural Rough Diamonds valued at Rs. 10,98,670/- under Section 111 of the Customs Act, 1962, with an option given to the importer to redeem the goods for re-export on payment of redemption fine of Rs. 2 lakh. It is a fact on record that 3 packets of natural rough diamond were found in the consignment which had not been declared by the appellant. It is also on record that such import of rough diamond was restricted in terms of DGFT circular number 34/2015 2020 dated 28.09.2020. The condition for import was that it had to be accompanied by a Kimberley process certificate - the Director in his statement has accepted that he had not ordered the rough diamonds, and hence he could not produce the Kimberly Process Certificate. It has been also pleaded before us that the provisions of Circular No. 53/2003 Cus dtd 23.6.2003 vide para 6 allow the goods to be sent back to the exporting country in the same is not accompanied by the valid KP certificate. The Department has not drawn any Panchnama to establish that the rough diamonds were concealed in the import consignment in any manner. The appellant had submitted necessary documentation to evidence that he had not placed the order for import of Natural Rough Diamond to the exporter. The appellant has also clarified the different signatures in the invoice and the email belong to the owner and the authorised signatory. Consequently, it is established that there was no attempt by the appellant import these undeclared goods and the same has happened due to the mistake on the supplier side. Therefore, the goods viz., Natural Rough Diamond are permitted to be re-exported, without payment of redemption fine. Thus, no penalty or fine is leviable on the appellant - appeal allowed.
Issues Involved:
1. Valuation of Natural Rough Emerald and imposition of redemption fine. 2. Imposition of redemption fine on Natural Rough Diamond. Summary: Issue 1: Valuation of Natural Rough Emerald and Imposition of Redemption Fine The Tribunal examined whether the valuation by the Government-approved valuer of Natural Rough Emerald and the consequent imposition of redemption fine was correct. The only reason given for rejecting the declared value was the presence of undeclared Natural Rough Diamonds. The Tribunal noted that the valuer, Shri Kamal Kant Parekh, did not figure in the list of Government-approved valuers as per Public Notice No. 03/2022. The Tribunal found that valuation of precious stones is subjective and generally fluctuates by +/- 20%, and the value declared by the appellant was within this range. The Revenue failed to provide cogent reasons or evidence for rejecting the transaction value. The Tribunal cited precedents, including Bikash Saha Vs. Commissioner of Customs (Prev), Kolkata, and Commissioner of Customs, Calcutta Vs South India Television (P) Ltd., to support its decision. Consequently, the Tribunal held that the Department failed to prove the transaction value was incorrect, and the valuation by the valuer was set aside. The Tribunal also found no grounds for imposing Rs. 50 lakh as redemption fine on the Natural Rough Emerald. Issue 2: Imposition of Redemption Fine on Natural Rough Diamond The Tribunal considered whether the imposition of redemption fine on the undeclared Natural Rough Diamonds was correct. The Tribunal noted that the import consignment was opened and examined routinely, and the three packets of Natural Rough Diamond were not concealed. The Director of the appellant company stated that the diamonds were never ordered, and the exporter corroborated this, admitting a mistake in packing. The Tribunal referred to Circular No. 53/2003-Cus, which allows goods without a Kimberley Process Certificate (KP Certificate) to be sent back to the exporting country. The Tribunal found no evidence of deliberate mis-declaration or smuggling by the appellant. Consequently, the Tribunal permitted the re-export of the Natural Rough Diamonds without payment of redemption fine. Conclusion: The Tribunal set aside the impugned order, holding that no penalty or fine is leviable on the appellant, and allowed the appeal.
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