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TMI Blog2011 (11) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 14 of the Customs Act, 1962.He also held that the goods valued as above will be liable for confiscation and imposed redemption fine of on the goods covered by Bill of Entry. Being aggrieved with the order they filed an appeal before this Bench. HELD THAT:- It is also seen that the high seas seller from whom the appellants purchased the scrap also imported the same for their individual use as well for trading. It is significant that during the period of dispute the high seas sellers had either imported scrap for their own use or sold the same to other individuals or companies at the same price as was for the appellants. In all these cases the goods were allowed to be cleared and no objection was raised by the Revenue. The contentions of M/s. Baheti Metals, therefore, are acceptable as we do not find why these assessments were resorted and the goods were allowed to be cleared. the value declared in the Bill of Entry has been correctly stated and the transaction value of the goods in question in terms of Section 14 of the Act read with Rule 4 of the Rules is correctly declared particularly when other Bills of Entry are assessed at the lower price. We find that there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1 crore on Shri Jamnalal Maliwal, authorized signatory of M/s. Baheti Metals & Ferro Alloys Ltd. Further, personal penalties were imposed as under : Sl. Noticee Penalty (Rs. in figures) Penalty (Rupees, in words) 1 Shri Purshottam Parolia 25,00,000/- Twenty-Five Lakh only. 2. Shri Ehsan Haji Amin Gadawala 50,00,000/- Fifty Lakh only. 3. Shri Gajendrakumar Mittal 5,00,000/- Five Lakh only. 4. Shri Bipin Chhabra 5,00,000/- Five Lakh only. 5. M/s. Ghanshyam Metal Udyog 65,00,000/- Sixty-Five Lakh only. 6. M/s. B.R. Metals & Alloys 10,00,000/- Ten Lakh only. 7. M/s. Shree Saibaba Metals 17,00,000/- Seventeen Lakh only. 8. M/s. Pushpak Metal Corporation 40,00,000/- Forty Lakh only. 9. M/s. Kalyan Metals 17,00,000/- Seventeen Lakh only. 10. M/s. Shree Krishna Metals 7,50,000/- Seven Lakh Fifty Thousand only. 11. M/s. Sun Metal Industries 1,50,000/- One Lakh Fifty Thousand only. 12. M/s. Maliwal lmpex Pvt. Ltd. 75,000/- Seventy-Five Thousand only. 13. M/s. Sunil Metal Industries 6,00,000/- Six Lakh only. 14. M/s. Sunil Metal Corporation 4,50,000/- Four Lakh Fifty Thousand only. 15. M/s. Yadhunandan Vasan Bhandar 7.50,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. C.C., Visakhapatnam - 2006 (204) E.L.T. 288 (T). He also submitted that there is no direct evidence against M/s. Baheti that it has resorted to undervaluation of the goods. The evidences relied upon by the Department are against others and not against M/s. Baheti. This apart, none of the Indenters or High Seas Sellers has given any statement incriminating M/s. Baheti. Therefore, the Commissioner's reliance on their statements is totally misplaced. Further, the Commissioner has not taken into account the contemporaneous imports as reflected in NIDB data maintained by the Custom Houses. Therefore, the impugned order is inconsistent with the provisions of Section 14(1) of the Customs Act, 1962. (c) Without prejudice to the aforesaid submissions, assuming without admitting, that the values that the Alert Circular can be made a basis for valuing Aluminium Scrap it is submitted that the said Circular came into force with effect from 16-12-2005 and will only apply prospectively. The burden to prove undervaluation lies squarely on the Department. It is for them to bring forth credible and cogent evidence to prove its case of undervaluation as held in the following decisions : I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, the transaction value is required to be accepted. (i) Eicher Tractors Limited v. Commissioner - [2000 (122) E.L.T. 321] (ii) Commissioner of C. Ex., Rajkot v. Jai Bharat Steel Industry - [2005 (192) E.L.T. 792] (iii) Commissioner of Customs v. Bureau Veritas - [2005 (181) E.L.T. 3 (S.C.)] (iv) Bansal Industries v. Commissioner of Customs, Chennai - [2002 (147) E.L.T. 967] (f) Without prejudice to the aforesaid and in any event, it is submitted that, assuming without admitting, for the sake of arguments only that the allegations made are correct, once the transaction value of the goods is discarded the determination of value is required to be done by sequentially following Rules 5 to 8 of the said Rules. Rule 5 of the said Rules mandates that the value of the imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued. In this connection it is submitted that the various grades of scrap of the same country of origin, as imported by the Appellants, is regularly imported into the country by many other importers across India. Each of the said grades of scrap was imported in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the department's contention that the LME prices which reflects the prevailing market price will be free from bias & show the trend of prices, the Hon'ble Tribunal has held in para 8 of its order that it is difficult not to accept this contention inasmuch as the LME is the market place for the great deal of trade in metal both prime and scrap and its bulletins show the prices at which contracts for sale and purchase of these commodities are being concluded. In the case of C.C., Mumbai v. Mukund Ltd. - 1999 (107) E.L.T. 653, the Hon'ble Tribunal has held that the LME prices can be considered to be a fair indicator of the prevailing market price. In the case of C.C., Mumbai v. Elpro International Ltd. - 2001 (127) E.L.T. 157 the Hon'ble Tribunal has held that the LME prices can be taken into consideration in determining the value of imported goods. In the case of C.C., Mumbai v. Metec Asia Pvt. Ltd. - 2001 (127) E.L.T. 169, the Hon'ble Tribunal has held that prices of goods as traded in the LME has an important bearing on the international market price. Again in the case of C.C., Nhava Sheva v. Maini Traders - 2001 (127) E.L.T. 388, the Hon'ble Tribunal has held that the price at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Importer. The investigation revealed that the aforesaid container containing goods weighing 24.719 MT was imported by M/s. Ghanshyam Metal Udyog, Ahmedabad which, in turn, sold it on high seas sales basis to M/s. Baheti on 8-3-2004 and M/s. Baheti had cleared the same through Nhava Sheva Port by filing Bill of Entry No. 981678, dated 16-3-2004 covered by invoice No. 12558, dated 11-2-2004 for a value of US Dollar 25,213.38 issued by M/s. F.J. Church & Sons Ltd. Both M/s. Ghanshyam Metal Udyog and M/s. Baheti have denied any advance payment to M/s. F.J. Church & Sons Ltd., London. It has been contended that they have imported aluminium scrap and not loose pure aluminium cuttings. Further, invoicc No. 12558/1, dated 1-2-2004 has been addressed to the old address of M/s. Ghanshyam Metal Udyog. However, it has not been denied that invoice No. 12558/1, dated 1-2-2004, invoice No. 12558, dated 11-2-2004 and Bill of Lading No. 14104144401024, dated 11-2-2004 pertain to one and the same Container No. TRLU 6146284 containing 24.719 MT goods. It, therefore, establishes the fact that the invoice No. 12558, dated 11-2-2004 is an undervalued invoice. (e) Ld. Counsel for M/s. Baheti co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 28 of the impugned order. Other Contentions of M/s. Baheti : [(h)] Ld. Counsel for M/s. Baheti submitted that in about 16 cases, the Department has accepted the declared value and pointed out certain orders passed by the Asstt. Commissioner & Commissioner (Appeals) in that regard. Therefore, the Department cannot now reopen those cases and pass different orders. He pointed out that in the case of M/s. Siyaram Metals, the Tribunal has remanded the matter. He submitted that the facts of the present case are not different from the cases where the Department has accepted the declared value. He cited the Apex Court's judgment in the case of Bharat Sanchar Nigam Ltd. v. Union of India - 2006 (2) S.T.R. 161 (S.C.) and referring to para 8 of the said judgment, he submitted that "where facts and law in a subsequent assessment year are the same, no authority whether quasi judicial or judicial can generally be permitted to take a different view". [(i)] It is submitted that in the earlier cases, the facts were plain and simple. In the present case, there are numerous evidences indicating under-valuation of aluminium scraps. In the case of C.C.E., Calcutta v. Alnoori Tobacco Products - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as loose aluminium cuttings while the goods sold by M/s. Ghanshyam Metal Udyog, received by the appellants are scrap. (d) The description in the Bill of Entry No. 981678, dated 16-3-2004 gives a description as aluminium scrap submitted ISRI "Taint and Tabor". It is very significant that the Bills of Entry were assessed and the goods were allowed to be cleared thereafter. If the facts are so as above, we find that the Revenue's case is not sustainable. This finds support from the statement of Mr. Ehsan Haji Amin Gadawala which states that if the values in various invoices were not true and correct and the order of Commissioner would show a higher value, the factual correctness of the declarations as regards the value in the various Bills of Entry filed for clearance of the various consignments of scrap should have been brought along with support of facts and law. 7. The allegation of the Revenue involving the appellants to the extent of purchasing 'tin sheets' nor any other consignments also proved to be wrong because as per the records of the case the appellants had not purchased either aluminium skeleton bottle or "Testy" from Primetal. This is apparent from the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased the scrap also imported the same for their individual use as well for trading. It is significant that during the period of dispute the high seas sellers had either imported scrap for their own use or sold the same to other individuals or companies at the same price as was for the appellants. In all these cases the goods were allowed to be cleared and no objection was raised by the Revenue. The contentions of M/s. Baheti Metals, therefore, are acceptable as we do not find why these assessments were resorted and the goods were allowed to be cleared. 9.1 We also find considerable force and conviction in the argument of the appellant that for proving undervaluation the onus is on the department with evidence relating to comparable imports. They have relied upon the case of C.C. v. South India Television (P) Ltd. - 2007 (214) E.L.T. 3 (S.C.). In the present case the Revenue has not brought out any such evidence in support of their case. It is also a fact that the evidence of contemporaneous imports should be considered for determining the transaction value and cannot be determined on any other basis. The reliance is placed on the order of Truwoods Pvt. Ltd. v. C.C. - 2006 (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section : Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement that the value is "very low", there is no basis for discarding the transaction between the importer and his supplier. In fact the circumstances only indicate that the transaction is fully commercial. Appellant is a regular importer of the material for the purpose of domestic manufacture. There is also a difference between the quantities under import. The difference in price is also not vast, so as to lead to the presumption that the transaction is externally influenced. In these facts and circumstances, the impugned Order is not sustainable. (Ref : Sundek India Ltd. v. Commissioner of Customs, Kandla - 2005 (192) E.L.T. 900 at Pp. 901, 902) 5. Section 14(1) creates a legal fixation. - The most important provision for the prupose of valuation of the goods for the purpose of assessment is Sec. 14 of the Customs Act, 1962. And a perusal of the same show that the value to be determined is a deemed value and not necessarily the actual value of the goods. Thus, Sec. 14(1) creates a legal fiction. Section 14(1) states that the value of the imported goods shall be the deemed price at which such or like goods are ordinarily sold or offered for sale, for delivery at the time and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t duties of Customs shall be levied on all goods imported into India. The goods imported shall have to be valued under Sec. 14, and the duty payable shall have to be determined according to the rates specified under Sec. 15 of the Customs Act read with the Customs Tariff Act. Goods referred to in Sec. 14 are goods on which duty of Customs is chargeable by reference to their value. It would be clear that Sec. 14 by itself does not lay down when or what goods are chargeable to Customs duty. It only deals with valuation of the goods imported which are chargeable to Customs duty. If they are chargeable to Customs duty and are chargeable by reference to their value, then the value has to be determined as laid down in Sec. 14. For such a levy, the concept of value assumes great importance since value may differ from country to country. Some countries have adopted the value based on either the FOB, FAS, C&F OR CIF. prices. Sec. 14 of the Customs Act envisages the C.I.F. concept of valuation which is in consonance with the provisions of G.A.T.T. (General Agreement on Trade and Tariff). The goods under import are liable for Customs duty as soon as they enter the territorial waters of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a matter of judicial discipline that when the appellants succeed before the appellate authority, the adjudicating authority cannot take a different stand. 13.2 In the Order-in-Original No. KDL/AC/DK/528/Gr.IV/2011, dated 31-3-2011 the original adjudicating authority ordered acceptance of declared invoice value as transaction value since there is no such contemporaneous price of identical or similar goods was considered. His observations which are as follows, we feel, may help in deciding the case. 9. I find that the declared invoice value has been rejected as transaction value by enhancing the value on the basis of DOV Alert Circular No. 14/2005, dated 16-12-2005 on the basis of LME price, which reflects the market prices prevailing of prime metal. In case transaction value is rejected the value is required to be determined by proceeding sequentially through the Rule 5 to 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 read with Section 14 of the Customs Act, 1962. But in this case it has not been followed scrupulously. In this context, I rely upon the case of M/s. Adani Exports Ltd. v. Commissioner of Customs, Vishakhapatnam - 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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