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2022 (7) TMI 1556 - AT - CustomsRejection of transaction value and its re-determination - Valuation, confiscation of goods, consequential demand of duty, redemption fine and penalty imposed - import of betel nuts made by the Appellant - acceptability of the report of the First Secretary (Commerce), High Commission of India, Singapore for rejecting the transaction value - Appellant imported 05 consignments of betel nuts from Thailand and 17 consignments of betel nuts from Indonesia. Adjudicating Authority, while accepting the transaction value of goods imported from Thailand, finds that products from different countries are not comparable and held that betel nuts of Indonesia and Sri Lankan origin are different in nature, quality and price - HELD THAT - We find that the aforesaid reasoning for rejection of transaction value would not meet the mandate of section 14 of the Customs Act and Rules as elucidated in M/s Sanjivani Non-Ferrous Trading Pvt Ltd 2018 (12) TMI 738 - SUPREME COURT . In view of the above judgments, it is clear that the rejection and re-determination of transaction value are not based on any contemporaneous imports and therefore the findings of the Adjudicating Authority are illegal and incorrect. In absence of quality test report, it is not possible to compare the price of the goods involved in the case of M/s Integral Traders and M/s Rajeswari Match Works. Moreover, in the impugned order it is stated that those cases are under investigation. Revenue has not submitted any evidence before us to prove the outcome of investigation. In such circumstances, comparison of goods imported by M/s Integral Traders and M/s Rajeswari Match Works cannot be justified. In the absence of any quality assessment of the goods, evidences of contemporaneous imports on higher transaction value of identical/similar goods at or about the same time and in the absence of any evidence leading to the payment of any amount directly or indirectly, over and above the invoice value presented before customs, the rejection of transaction value and its re-determination is not in agreement with the procedure established by law. The Order-in-Original is flawed and contrary to law, for it doesn t give any cogent reason for rejecting transaction value in terms of section 14(1) of the Customs Act, 1962 and Rule 12 of the Customs Valuation Rules, 2007. The impugned order is not in accordance with Section 14 and Rule 3 and 12 as the mandates of these provisions are ignored. Competency of the Commissioner of Customs, who was formerly First Secretary (Commerce), High Commission of India, Singapore, to adjudicate the impugned case, when his report was relied upon among various documents for adjudication - From records, it is clear that the Appellants have not challenged the said decision of the Board before any forum and therefore the said issue is no more res integra. We therefore reject the argument of the Appellant with regard to the competency of the Adjudicating Authority to adjudicate this case. Rejection of request for cross examination of the First Secretary (Commerce) in the High Commission of India, Singapore - As submitted by the Learned A.R, show cause notice in this case was issued on 09.02.2010 and Order was passed on 17.5.2010. Even when the First Secretary (Commerce) in the High Commission of India, Singapore, took charge as Commissioner of Customs, Cochin on August 2012, no such requests were made. Later, in September 2012 the Appellants demanded opportunity to cross examine the First Secretary (Commerce) in the High Commission of India, Singapore. We are of the view that the request of the Appellant for cross examination, after one round of adjudication is not justified with any supporting evidences and therefore the same is liable to be rejected. Even though Tribunal has remanded the case for de-novo consideration, Adjudicating Authority has not considered the contentions of the Appellant afresh and has borrowed findings from the first adjudication order - We have perused the impugned order in detail and found that the Adjudicating Authority has observed that certain contentions of the Appellant have been already considered by the Original Authority, while passing orders. We are unable to agree with the said findings of the Adjudicating Authority when there is an open remand for de-novo consideration is on records. Therefore, we hold that the impugned order, passed by the Adjudicating Authority, is not a well-considered order. Since this matter is under lis for the past more than 10 years and since this matter is in its third round before this Tribunal, we are not inclined to remand this case again. Commissioner of Customs, Cochin, has ordered confiscation of goods under section 111(m) of the Customs Act, 1962 with an offer to redeem the goods on payment of redemption fine besides imposing penalty under section 112(a) of the Customs Act, 1962. We have already found that Revenue has failed in establishing undervaluation on the part of the Appellant and no evidences are brought before us to establish remittance, in excess to the invoice value submitted before the Customs. Therefore, we are of the view that, order of confiscation of goods under section 111(m) is not sustainable and consequentially redemption also fails. Penalty under section 112(a) of the Customs Act being a confiscation related penalty, the same is also held to be unsustainable. Since there is no violation of EXIM Policy, nothing survives more. Demand of differential duty, interest, redemption fine and penalty cannot be sustained. Resultantly the impugned order is set aside. The appeals are allowed.
Issues Involved:
1. Rejection of transaction value and its re-determination. 2. Acceptability of the report of the First Secretary (Commerce), High Commission of India, Singapore. 3. Competency of the Commissioner of Customs, who was formerly the First Secretary (Commerce), to adjudicate the case. 4. Rejection of the request for cross-examination. Issue-wise Detailed Analysis: 1. Rejection of Transaction Value and Re-determination: The Adjudicating Authority rejected the transaction value under Rule 12(1) of the Customs Valuation Rules, 2007, and re-determined it under Rule 9. The judgment emphasized that the transaction value under Rule 3(1) must reflect the price paid or payable at the time and place of importation. The invoice price is not sacrosanct, and before rejection, the department must provide cogent reasons and evidence of imports of identical or similar goods at higher prices. The court cited precedents, including the Supreme Court's rulings in cases like Sanjivani Non-Ferrous Trading Pvt Ltd and South India Television P. Ltd., highlighting that without evidence of contemporaneous imports at higher prices, the invoice price should be accepted. The Tribunal found that the rejection and re-determination were not based on contemporaneous imports, making the Adjudicating Authority's decision illegal and incorrect. 2. Acceptability of the Report of the First Secretary (Commerce): The Tribunal found the report of the First Secretary (Commerce) to be inconclusive and unreliable for valuation purposes. The High Commission of India at Singapore did not have records to substantiate the value communicated by the First Secretary. The report lacked specificity regarding data sources, rendering it insufficient for determining or redetermining the value of imported goods. The Tribunal concluded that reliance on this report for valuation was unsustainable. 3. Competency of the Commissioner of Customs: The Tribunal addressed the competency of the Commissioner of Customs, who was formerly the First Secretary (Commerce), to adjudicate the case. The Central Board of Excise and Customs decided not to change the adjudicating authority despite the Commissioner's previous role. The Tribunal noted that the appellants did not challenge this decision before any forum, and thus, the issue was no longer open for debate. The Tribunal rejected the appellant's argument regarding the Commissioner's competency. 4. Rejection of Request for Cross-Examination: The request for cross-examination of the First Secretary (Commerce) was made only in the second round of adjudication. The Tribunal found no justification for the delay in making this request. Since the request was not made during the initial adjudication, the Tribunal deemed it unjustified and rejected it. Conclusion: The Tribunal set aside the impugned order, finding that the rejection of the transaction value and its re-determination were not in accordance with the law. The order of confiscation under section 111(m) and the penalty under section 112(a) of the Customs Act were deemed unsustainable. Consequently, the demand for differential duty, interest, redemption fine, and penalty could not be sustained. The appeals were allowed with consequential reliefs.
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