2024 (3) TMI 138 - AT - Customs

Valuation of imported goods - allegation of Fabricated invoices/ original invoices - transaction value of the imported goods - Jurisdiction Of Ld. Adjudicating Authority to appreciate the evidences on record in sustaining the allegations/ the issues raised in the SCN - Whether the issues raised under the said SCN can be considered as valid and legal notwithstanding the allegations of failure on the part of Ld. Adjudicating Authority in considering the evidences while passing the impugned OIO ? - HELD THAT - We find that the Ld. AR, while assailing arguments reiterating the allegations as per the SCN has not made any submission on the aforesaid observations of the Adjudicating Authority. Thus, it is understood that the Adjudicating Authority has thoroughly examined the facts on record giving a categorical observation that Shri Sanjay Punjabi is the sole Director of M/s Rax Trading Limited, Hong Kong and that Shri Hitesh Nagwani is the sole proprietor of PV Enterprises. Nothing has been brought on record to contradict the aforesaid observations of the Adjudicating Authority. Hence, in the absence of any evidence to the contrary, we do not find any reason to interfere with the conclusion arrived at by the Ld. Adjudicating Authority. We observe that the case of M/s Rudras Overseas was pertaining to the period prior to the subject imports of M/s P.V Enterprises/ Respondent and therefore the allegations fabricated invoices is not a matter of relevance in the instant case. In this regard, the Ld. AR also agrees to the fact that though such fabricated invoices had been relied upon to allege under-valuation of the said goods but re-determination of value of imported goods has not been made on the basis of such invoices but based upon the contemporaneous imports. In fact, it is a now matter on record that no fabricated invoice or no invoice said to be original, has been relied upon in the instant case to support the elements of related person and consequent alleged undervaluation, as rightly observed by the Ld. Adjudicating Authority vide para 28.16 of his order, reproduced supra. In such a situation, we have no option but to accede to the submissions made by the Ld. Counsel for the Respondent since the valuation of the subject imported goods has not been done on the basis of the so-called fabricated invoices, hence, cognizance of the same cannot be taken to prove the allegations against the Respondent. The crux of the decision by Ld. Adjudicating Authority in the context is that the SCN failed to suggest that there is material on record that a proper exercise had been taken into consideration on the issues like, brand, ingredients, country of manufacturer, etc. The Ld. Adjudicating Authority had further exemplified his decision with reference to certain Bills of Entry, as detailed under para 29.8 of the subject OIO, as already reproduced above. We find that the issue of comparison is indeed not based on the issue of identical goods but is based on similar goods. However, the information contained in the SCN along with the referred annexures, as claimed by Ld. AR prima facie does not contain the comparison and the similarity thereof, with reference to the item description, as rightly observed by the Ld. Adjudicating Authority. Infact, the Annexures contained the details of item description, as if it is the same or similar in the subject Bills of Entry of the Respondent and that of the other importers. It was quintessential for the Appellant to have been specifically explain as how the description, if not identical, is similar in nature, description, contents, etc. Hence, by merely stating that the description is similar in the Bills of Entry under comparison, is to be considered as a bald statement sans evidence. However, having observed so, we do find that the observations of the Ld. Adjudicating Authority are not correct with reference to the country of manufacturer, as the same has been provided in the Annexures, as well as in the narrative part of the SCN. Nevertheless, this observation is not sufficient enough to compare the values in order to confirm the aspects of undervaluation. Hence, we are of the considered opinion that the Transaction Values of the other importers cannot be considered for the purposes of redetermination of Transaction Value in terms of Rule 5 of CVR, 2007. Moreover, we note that the seizure of cash at the residence of Shri Sanjay Punjabi vide Panchnama has been made out, as if it is the sale proceeds of food supplements, imported by M/s P.V Enterprises/ Respondent and therefore, apparently, it is the case of the Department that the sales of the imported goods by M/s P.V Enterprises had direct connection with the seized cash as well as to prove the transactions to be related . Hence, we do not find any infirmity in the discussions carried out by the Ld. Adjudicating Authority under para 28.17, as the same is the integral part of the SCN as well as of the defence submissions along with documentary evidences as detailed under para 26.7 of the subject OIO. Regarding confiscation of the goods of the live consignment , On perusal of the said Panchnama, we note that the comparable transaction values have not been substantiated based on any documentary evidences or by referring to the specific Bills of entry and the other details of description, brand name, quantity, etc. in the said Panchnama. Hence, the basis of seizure itself is improper, with reference to the alleged undervaluation on comparable prices. The issues related to minor infractions of descriptions and quantities with reference to products listed at Sr. No. 9 of the Bill of Entry, we note that the same does not have any impact on the allegations of the undervaluation, which was principally, basis for the seizure. SCN can be considered as valid and legal - We are of the considered opinion that the basis of the allegations pertaining to the comparable prices, as per the referred Bills of Entry of the other importers, as already stated above, do not sustain, as rightly observed by the Ld. Adjudicating Authority vide paras 29.7 to 29.10 of the subject OIO and therefore, the subject OIO is upheld in toto. Thus, having considered the rival contentions and grounds of the appeal and on perusal of records, we find that there is no error in the impugned Orderin- Original. Accordingly, we dismiss this appeal by Revenue. Appeal dismissed.

Summary

Issues Involved:
1. Whether the parties involved are "related persons" under the Customs Act and the rules made thereunder.
2. Whether the relation influenced the price of the goods in question.
3. Whether the transaction values declared are influenced by their mutual relationship and thus liable to be rejected.
4. Whether the goods used for comparison fall within the realm of "similar goods" as contemplated in the Customs Act and the rules made thereunder.
5. Whether the Ld. Adjudicating Authority failed to appreciate the evidences on record in sustaining the allegations raised in the SCN.
6. Whether the issues raised under the SCN can be considered as valid and legal notwithstanding the allegations of failure on the part of Ld. Adjudicating Authority in considering the evidences while passing the impugned OIO.

Summary of Judgment:

Issue 1: Related Persons
The adjudicating authority examined whether the parties involved are "related persons" under Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It was concluded that there was no sufficient material to prove that the parties were related as defined under the rules. The investigative outcomes were deemed insufficient to establish a legal relationship influencing transaction values.

Issue 2: Influence on Price
The adjudicating authority found no conclusive evidence that the relationship between the parties influenced the price of the goods. The allegations were based on circumstantial evidence and did not meet the legal requirements to prove that the transaction values were influenced by their relationship.

Issue 3: Transaction Values
The adjudicating authority concluded that the transaction values declared by the importer were not influenced by any mutual relationship. The evidence provided did not support the rejection of the declared values under Rule 5 of the Customs Valuation Rules, 2007.

Issue 4: Similar Goods
The adjudicating authority found that the comparison of the imported goods with other goods did not meet the statutory requirements for "similar goods" under Rule 2(f) of the Customs Valuation Rules, 2007. The comparison lacked consideration of important aspects like brand, ingredients, and country of manufacture, making the exercise legally unsanctioned.

Issue 5: Appreciation of Evidence
The adjudicating authority thoroughly examined the facts and evidence on record, providing categorical observations and conclusions. The appellant's arguments were found to be reiterations of the allegations in the SCN without raising any new points of law or evidence.

Issue 6: Validity and Legality of SCN Issues
The adjudicating authority upheld the impugned OIO, finding no basis for the allegations of undervaluation and related party transactions. The transaction values of other importers could not be considered for re-determination of the subject goods' value under Rule 5 of the Customs Valuation Rules, 2007.

Technical Issues:
The appeal also addressed technical issues, including the release of seized cash and the relevance of the Canon India judgment. The adjudicating authority found no error in the impugned OIO and dismissed the appeal by Revenue.

Conclusion:
The appeal by Revenue was dismissed, and the impugned Order-in-Original was upheld in toto. The adjudicating authority's findings were deemed thorough, well-reasoned, and based on a comprehensive examination of the evidence and legal provisions.