2024 (3) TMI 698 - AT - Customs

Valuation of the imported goods - Mis-classification of goods - value of the goods on the basis of some entries taken from the rough note books and diaries - Demand - Penalty levied - imported goods as pre-sensitized positive offset aluminium plates - classified under CTI 8442 50 39 - whether the entries in the notebook/ diaries can be considered for determining the transaction value - HELD THAT - In the present case, the corroborative evidence, as noted above, indicates that the value mentioned by the appellant in the Bills of Entry is comparable to the assesseed value of the good imported by other importers at the same time. The value is also comparable to the value determined by the designated authority in the Final Notification in anti-dumping matter. It would be seen from the comments that rough entries were made and they cannot be considered towards payment received from imports. It needs to be noted that Rakesh of Aakruti Impex is an Indian buyer and Ajit Kumar Jain has maintained receipt and payment from him in Rupees with exchange rates of RMB and USD for rough estimation. Aakruti Impex is the only buyer of offset printing plate imported by Barfo Impex under the seven Bills of Entry and sold under 22 VAT invoices. The contention of the appellant, therefore, is that the local rough estimates of Rakesh of Aakruti Impex made in foreign exchange were for rough business estimation only and they cannot be considered towards payment made to overseas supplier, more particularly when the value of the imported goods is comparable to the contemporaneous imports and the value indicated in the Final Anti-Dumping Notification dated 15.05.2020. Hence, it is not possible to accept the contention of the department that the transaction value was required to be rejected as the rough registers indicated some additional consideration, apart from the banking transactions, and the transaction value was correctly re-determined in accordance with the 2007 Valuation Rules. Thus, the impugned order dated 06.01.2020 passed by the Principal Commissioner deserves to be set aside and is set aside. Customs Appeal are, accordingly, allowed with consequential relief (s) if any.

Summary

Issues Involved:
1. Rejection and re-determination of self-assessed transaction value with penalty.
2. Imposition of penalty on proprietors of M/s. Vardhman Automobiles and Ms. Aakruti Impex.
3. Allegations of mis-classification and undervaluation of imported goods.

Summary:

1. Rejection and Re-determination of Transaction Value:
The Principal Commissioner of Customs adjudicated three show cause notices and rejected the self-assessed transaction value, re-determining it with penalties. The rejection was based on rough entries found in the kaccha registers during searches at the appellant's premises. The department alleged that the appellant indulged in undervaluation of imported goods from China to evade customs duty, making additional payments through non-banking channels. The Principal Commissioner upheld the allegation of undervaluation but dropped the demand based on mis-classification, confirming the re-determined assessable value of Rs. 8,39,06,391/- and the differential duty of Rs. 1,17,34,066/-.

2. Imposition of Penalty on Proprietors:
Penalties of Rs. 40 lakhs each were imposed on the proprietors of M/s. Vardhman Automobiles and Ms. Aakruti Impex. The department alleged that these proprietors were involved in the undervaluation scheme, with Ajit Kumar Jain and Rakesh Rashik Lal Shah actively participating in the suppression of the actual transaction value.

3. Allegations of Mis-classification and Undervaluation:
The show cause notices alleged mis-classification and undervaluation of imported goods. The Principal Commissioner dropped the demands regarding mis-classification but confirmed the demand relating to undervaluation. The appellant contended that the contemporaneous price of imported goods was comparable to the declared value and that the rough notebooks found during searches were merely rough estimates with no evidentiary value. The Tribunal observed that entries in rough notebooks cannot be the sole basis for determining valuation without corroborative evidence. The declared value was found comparable to the value determined in the Final Finding Notification in anti-dumping matters.

Conclusion:
The Tribunal set aside the impugned order dated 06.01.2020 passed by the Principal Commissioner, allowing the appeals with consequential reliefs. The rough entries in notebooks were deemed insufficient for rejecting the declared transaction value without corroborative evidence, and the declared value was found comparable to contemporaneous imports and anti-dumping findings.