2023 (7) TMI 548 - AT - Customs

Valuation of imported goods - 118 used cranes and 04 consignments of accessories - rejection of declared value - redetermination of value - entire facts not considered at the time of redetermination of value - opportunity of hearing not provided to appellant - Confiscation - redemption fine - penalty - violation of principles of natural justice - HELD THAT - The entire case made out against the appellants is based on the statements recorded. Further it is observed that the impugned goods were assessed to duty by the Custom authorities acting as per the provision of law. The investigations have been undertaken much later on and in some case the duty has been sought to be recovered much after the expiry of 5 years from the appellant stating the same to be voluntary payment of duty. Was the payment voluntary or not need to be established. Where the statements recorded voluntary or not is not forthcoming. The decisions relied upon by the Commissioner for not allowing the cross examination are not in cases where person comes forth after the expiry of period limitation and deposits the duty suo motto. The appellants should be allowed an opportunity to defend their case in the manner they deem best. They should have been heard at least. That being so the appeals in respect of these three appellants need to be allowed and matter remanded to original authority for de novo consideration after allowing the opportunity of hearing to the appellant and also to cross examine the person whose statement revenue intend to rely upon against them. It is evident that actual amount paid by him against the purchase of the two cranes was not Rs 2,00,00,000/- but the actual amount paid by him was only Rs 1,25,00,000/-. That being so accepting the same as transaction value in the course of High Sea Sales, the transaction value by applying the principles laid down, as have been applied by the show cause notice and in the impugned order, the transaction value should have been determined at Rs 1,25,00,000/- which is less than the actual transaction value declared on the Bill of Entries at the time of clearance of goods - It is settled principle in law the entire fact stated in the statement about the transaction should have been taken into account while determining the correctness of transaction - the appeal filed by the appellant 2 will have to be allowed in his favour setting aside the impugned order in his respect. Appeal disposed off.

Issues Involved:
1. Rejection of declared value and re-determination of CIF value.
2. Confiscation and redemption of consignments.
3. Duty demands and interest.
4. Imposition of penalties under various sections of the Customs Act, 1962.
5. Violation of principles of natural justice and denial of cross-examination.

Issue-wise Detailed Analysis:

1. Rejection of Declared Value and Re-determination of CIF Value:
The Commissioner Customs (Imports), Mumbai, rejected the declared CIF value of Rs. 39,64,79,950/- for 122 consignments (118 used cranes and 04 consignments of accessories) imported by M/s Govindji Gopalji & Sons and high seas buyers, under Rule 10A/Rule 12 of the Custom Valuation Rules 1988/2007 read with Section 14 of the Customs Act, 1962. The CIF value was re-determined as Rs. 73,90,29,923/- under Rule 3/Rule 8 of the Custom Valuation Rules 1988 or Rule 3/Rule 9 of Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962.

2. Confiscation and Redemption of Consignments:
The order directed the confiscation of 122 consignments under Section 111(m) of the Customs Act, 1962. However, options for redemption were provided under Section 125 of the Customs Act, 1962, upon payment of specified fines. For example, M/s Govindji Gopalji & Sons were given an option to redeem 117 consignments on payment of a redemption fine of Rs. 6,50,00,000/-. Similar options were given to other high seas buyers with varying redemption fines.

3. Duty Demands and Interest:
The duty demand of Rs. 8,35,01,181/- was confirmed for the used cranes and accessories imported by M/s Govindji Gopalji & Sons, along with interest under Section 28AB of the Customs Act, 1962 (Section 28AA from 08.04.2011 onwards). Additional duty demands were confirmed for other high seas buyers, such as Rs. 9,43,508/- for M/s Rangara Industries Pvt. Ltd., Rs. 17,86,121/- for M/s AKM Enterprises, and Rs. 11,26,632/- for M/s Huda Equipments.

4. Imposition of Penalties:
Penalties were imposed under various sections of the Customs Act, 1962. For instance, under Section 114A, penalties equivalent to the duty amounts were imposed on M/s Govindji Gopalji & Sons and other buyers, with a provision for a reduced penalty if paid within 30 days. Additional penalties were imposed under Section 112(a) and Section 114AA on individuals and entities involved, such as Rs. 1,00,00,000/- on Shri Darmesh Vador, Managing Partner of M/s Govindji Gopalji & Sons, and Rs. 50,000/- on Shri Dinesh Sharma, Proprietor of M/s Reetika Road Lines.

5. Violation of Principles of Natural Justice and Denial of Cross-examination:
The appellants argued that the order was passed in violation of the principles of natural justice, as they were not allowed the opportunity of hearing or cross-examination of witnesses whose statements were relied upon against them. The Tribunal observed that the entire case against the appellants was based on statements recorded, and the impugned goods were assessed to duty by the Custom authorities as per the law. The Tribunal emphasized the need for establishing whether the payment of duty was voluntary and whether the statements recorded were voluntary. The Tribunal relied on the decision of the Hon'ble Apex Court in the case of K I Pavunny, which held that statements under Section 108 of the Customs Act form substantive evidence and can be used against the accused.

Separate Judgments:
- Appellant 1 (Shri Dinesh Sharma), Appellant 3 (Dhramesh Vador), and Appellant 4 (Govindji Gopalji & Sons): The Tribunal allowed the appeals and remanded the matter to the original authority for de novo consideration after allowing the opportunity of hearing and cross-examination of witnesses. The Tribunal cited cases like Karim Jaria & Others and Gopalji Heavy Lifters to support the need for cross-examination.
- Appellant 2 (Shri A K Mani): The Tribunal found that the actual amount paid for the two cranes was Rs. 1,25,00,000/-, not Rs. 2,00,00,000/-. Therefore, the transaction value should have been determined accordingly. The Tribunal allowed the appeal and set aside the impugned order in respect of Appellant 2.

Conclusion:
The Tribunal directed that the de novo proceedings for Appellant 1, Appellant 3, and Appellant 4 be completed within three months from the receipt of the order. The appeal of Appellant 2 was allowed, and the impugned order was set aside in his respect.

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