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2024 (5) TMI 683 - AT - CustomsMaintainability of the impugned order - Anti-Dumping Duty - Undervaluation of imported Flax yarn from sister companies / concerns - re-determined assessable value - Demand of duty - Penalty - Liability to pay differential Anti-Dumping Duty in respect of the 7 Bills-of-Entry - imposition of ADD - genuineness of the invoices - Whether the values declared by the appellants in all the 26 Bills-of-Entry is liable to be rejected and the values re-determined by the ld. adjudicating authority in the impugned order based on the price available of similar goods in the NIDB data is acceptable in the facts and circumstances of the case or not - HELD THAT - We do not agree with the submission of the Ld. DR that adjudication of the case by an officer senior to proper officer would amount to granting of deemed extension. We observe that the proviso to Section 28(9) clearly stipulates that in case the adjudication is not done within the time limit stipulated, then the Officer senior in rank to the Proper Officer must grant extension in such cases. Even if an Officer senior to the Proper Officer adjudicates the case, a formal extension must be obtained as mandated in Section 28(9) of the Act, which has not been done in the instant case. Accordingly, we find merit in the contention of the appellants that the impugned order is liable to be set aside on this ground alone. Differential Anti-Dumping Duty - Since the letter dated 29.03.2019 contains information on invoices issued in the months of September 2019 and November 2019, we agree with the contention raised by the appellants that there is suspicion about the genuineness and veracity of the said letter. Accordingly, we hold that the demand cannot be raised on the basis of the letter dated 29.03.2019 or the documents said to have been attached along with the said letter. When there is a confirmation about the genuineness of invoices from the representative of the manufacturer, there is no reason to reject the same. Accordingly, we hold that the invoices filed by the appellant along with the 5 Bills-of-Entry are genuine. Hence, the ADD paid by them in respect of the 5 Bills-of-Entry at the rate of 0.50 USD per kg. is in order. Thus, we hold that the differential ADD confirmed in respect of the 5 Bills-of-Entry in the impugned order is not sustainable. In respect of the remaining 2 Bills-of-Entry - The demand, if any, for the short-paid ADD could have been issued within a period of one year from the date of payment of ADD. However, in this case, the Notice has been issued on 22.11.2021 which is much beyond the normal period of limitation. As no suppression of fact with intent to evade payment of duty exists in this case, we hold that the demand of ADD by invoking the extended period of limitation is not sustainable. Accordingly, we hold that the ADD demanded in respect of the 2 Bills-of-Entry is also not sustainable, on the ground of limitation. Thus, we hold that the differential ADD confirmed in the impugned order in respect of all the 7 Bills of Entry are not sustainable and accordingly, we set aside the same. Since the demand of differential ADD is not sustainable, the question of demanding interest and imposing penalty on the same does not arise. Whether the values declared by the appellants in all the 26 Bills-of-Entry is liable to be rejected and the values re-determined by the ld. adjudicating authority in the impugned order based on the price available of similar goods in the NIDB data is acceptable in the facts and circumstances of the case or not - We observe that the said email is dated 20th May, 2019 and the details of the two invoices pertain to the dates 26th July and 27th September, 2019 are furnished therein. This clearly establish that the e-mail was not sent on 20th May. The appellants submit that they asked for the IP address from where the e-mail has been sent, but it was not furnished. Thus, we observe that there is merit in the contention of the appellants that the emails are fabricated. Accordingly, we hold that the attachments therein cannot be relied upon to reject the value declared by the appellants in the Bills-of-Entry. Accordingly, we hold that the allegation of undervaluation in respect of all the 26 Bills of Entry are not established. Hence, the demand of differential customs duty confirmed in the impugned order on account of undervaluation is not sustainable and hence we set aside the same. There is no evidence available on the record to reject the genuineness of the invoices submitted by the appellants. The value declared by the importers in other Bills-of-Entry are not comparable as the quantity of goods or quality of goods imported cannot be ascertained to conclude as to whether the comparable import qualifies as identical goods or not. Accordingly, we hold that the transaction value declared by other importers cannot be treated as the correct transaction value in respect of the goods imported by the appellants herein. The transaction value declared by the appellants cannot be rejected on the basis of a mere allegation by a third-party on the ground that the format of the invoice is not similar to theirs or other invoices issued by the manufacturer. Hence, we hold that the transaction value declared by the appellants in respect of the 26 Bills-of-Entry cannot be rejected and the assessable value re-determined by the Department in the impugned order is not based on any documentary evidence. Thus, we hold that the assessable values declared by the appellants in the 26 Bills of Entry cannot be rejected. Accordingly, we hold that the differential duty confirmed on the basis of the re-determined assessable value is not sustainable. Penalty - Since the demand of ADD and Differential customs duty is not sustainable, the question of demanding interest or imposing penalty on the appellant importers does not arise. Penalty on the common Director - We observe that his involvement in the alleged offence was established on the basis of the statement given by him on 9th July, 2019. We observe that he has retracted his statement dated 9th July by letter dated 10th July 2019 which was not responded to by the authorities concerned. As the department has not responded to the retraction made by Mr. Aditya Sarda on 10th July 2019 addressed to the Director General of DRI, Delhi, the purported statement dated 9th July 2019 cannot be relied upon to penalize him. Further, as discussed, the alleged offence of short payment of ADD and short payment of customs duty on account of undervaluation has not been established. Accordingly, we hold that the penalty imposed on the Director Shri. Aditya Sarda is not sustainable. In the result, the appeals filed by all the four appellants are allowed, with consequential relief, if any, as per law.
Issues Involved:
1. Differential Anti-Dumping Duty (ADD) liability on 7 Bills-of-Entry. 2. Rejection and re-determination of declared values in 26 Bills-of-Entry. 3. Imposition of penalties on the appellants. Summary: Issue (1): Differential Anti-Dumping Duty (ADD) Liability: The appellants were alleged to have undervalued Flax Yarn imports, leading to a demand for differential ADD. The Department relied on a letter dated 29.03.2019 from Tung Ga Linen & Cotton Changzhou Co. Ltd., claiming no exports to India post-Notification No. 53/2018. The appellants contested the letter's authenticity, pointing out discrepancies such as future dates mentioned in the letter. The Tribunal found merit in the appellants' contention, stating that the letter could not be relied upon to demand differential ADD. Additionally, for two Bills-of-Entry, the Tribunal held that the short-paid ADD demand was time-barred as no mis-declaration was involved. Consequently, the differential ADD confirmed in the impugned order was set aside. Issue (2): Rejection and Re-determination of Declared Values: The Department alleged undervaluation based on emails from a trade rival, which the appellants claimed were fabricated and uncertified. The Tribunal observed that the Department failed to provide cogent evidence to reject the declared values. It emphasized that transaction values could not be rejected based on mere allegations without contemporaneous import data of identical or similar goods. The Tribunal held that the declared values were not liable to be rejected, and the differential customs duty confirmed on account of undervaluation was unsustainable. Issue (3): Imposition of Penalties: Penalties were imposed on the appellants for alleged short payment of ADD and customs duty. Given the Tribunal's findings that both the differential ADD and customs duty demands were unsustainable, it concluded that the penalties were also not maintainable. The penalty on the common Director, Mr. Aditya Sarda, was deemed unsustainable as his retracted statement was not responded to by the authorities, and the alleged offences were not established. Conclusion: (i) The impugned order was not sustainable due to non-compliance with Section 28(9) of the Customs Act, 1962, as no extension was obtained from a higher-ranking officer. (ii) The differential ADD confirmed in respect of 7 Bills-of-Entry was set aside due to lack of evidence and limitation. (iii) The demand for differential customs duty on account of undervaluation was set aside. (iv) Penalties imposed on all appellants were set aside. Result: The appeals filed by all four appellants were allowed with consequential relief as per law.
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