2024 (11) TMI 18 - AT - Customs

Undervaluation in import of poppy seeds - Demand of differential duty of customs - demand differential duty of customs alleging that the supplier of Poppy Seeds is the same from Turkey whereas the declared price shown by the respondent is very less than the Poppy Seeds imported by the other importers - HELD THAT - We find that the issue has been dealt with by this Tribunal in the case of Commissioner of Customs (Port), Kolkata v. Sawetri Trading Company 2023 (12) TMI 383 - CESTAT KOLKATA observed that if the value of contemporaneous imports were accepted and the transaction value in those case are not doubted by the revenue in the assessment orders, it is not understandable why the said values could not have been used for the purposes of comparing the same with the value of the consignments in question in these appeals. As decided in M/S CHIRAG INTERNATIONAL VERSUS C.C. KANDLA 2019 (4) TMI 946 - CESTAT AHMEDABAD the enhancement of the price and consequential demand, interest etc. are not sustainable. Accordingly, the impugned order is set aside and appeal is allowed with consequential relief. Decided against revenue.

Summary

Issues:
Appeal against impugned order, Allegation of undervaluation in import of poppy seeds, Reliance on foreign documents for valuation, Use of insurance documents and public ledger for valuation, Imposition of penalties, Confessional statement as basis for differential duty liability, Rejection of contemporaneous imports for valuation comparison.

Analysis:
The judgment pertains to an appeal by the Revenue against an impugned order regarding alleged undervaluation in the import of poppy seeds. The case involved reliance on foreign documents for valuation, including export invoices and declarations from Turkish authorities. The Tribunal highlighted the necessity for foreign documents to be tested and signed by the relevant authorities to be admissible as evidence, emphasizing the requirement for certification as true copies. It was noted that reliance on unauthenticated and unsigned documents is impermissible, as established by legal precedent, such as the East Punjab Traders case. The judgment also addressed the inadmissibility of using insurance documents and public ledger information for redetermining transaction value, citing precedents like Orient Enterprises and Prabhu Dayal Premchand, which established that such sources cannot be used to doubt or reject declared values.

Regarding the imposition of penalties, the Tribunal emphasized the need for proper rejection of transaction value before resorting to valuation rules for customs duty determination. The judgment highlighted the failure to follow the prescribed rules and the reliance on documents not pertaining to the concerned parties. Additionally, the Tribunal scrutinized the use of a confessional statement as the sole basis for asserting undervaluation, noting the retraction of the statement by the individual in question. The Tribunal concluded that the impugned orders were unsustainable due to factual discrepancies and set them aside.

Furthermore, the judgment discussed the rejection of contemporaneous imports for valuation comparison, emphasizing the inconsistency in not considering values from similar imports. The Tribunal underscored the necessity to reject transaction value before applying valuation rules, which was found lacking in the case at hand. Ultimately, the Tribunal upheld the impugned order in favor of the respondent, citing previous decisions that had already resolved the issue in question. Consequently, the appeal by the Revenue was dismissed, affirming the decision in the impugned order.