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TMI Blog2016 (1) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... by other importer such as M/s Rico Gems based on the available prices for contemporaneous imports of identical goods by other importers. Once it is undisputed fact that the declared value was not accepted and for the purpose of assessment valuation was done on the basis of contemporaneous price of identical or similar goods, further enhancement of value was not permissible. After detailed examination of facts and records we find that the demand of differential duty and penal action cannot sustain in the facts of the instant case. Since the undervaluation of imported goods is not established, all the other confirmation such as confiscation of the goods, fines in lieu thereof, penalties on all the appellants being consequential to demand of duty, are also not sustainable - Decided in favor of assessee. - Appeal No. C/85950, 85951, 85952, 85953, 86007, 86008, 86046, 86047 & 86048/13-Mum - Final Order Nos. A/3917-3925/2015-WZB/CB - Dated:- 14-12-2015 - P S Pruthi, Member (T) And Ramesh Nair, Member (J) For the Appellant : Shri Vikram Nankani, Sr. Adv. Shri Anil Balani, Adv For the Respondent : Shri V K Singh, Special Consultant ORDER Per Ramesh Nair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of payment made separately in addition to value shown in the invoice. 3.3 Shri Prakash Chandra Pandya in his statement dated 19.04.2006 has confirmed the details of entry made regarding payment made or to be made to M/s China 5 star product Company Pvt Ltd. That they have requested China 5 Star Products Co. to give them two sets of invoices, one set for bank purposes in which the value was shown less as compared to the actual value of the goods and the other the actual value invoice. The invoice meant for bank purpose which showed lower value. Payments to the suppliers were however made as per the actual value of the goods. Shri Pandya confirmed his above statement vide his statement dated 03.05.2006 and 29.06.2006. In his above statements Shri Pandya gave further details regarding actual value of the goods. Shri Pandya has further stated that statement of account referred to above was sent by Shri Felix of China 5 Star products Co. Ltd. China which was seized during the course of search on 18.4.2006. That in col. No. 6 the value as declared in the invoices submitted for Customs is mentioned whereas the actual invoice amount (i.e. the actual value of the goods impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Wheel Cover, Cover Plate, Pinion, Metal Shafts, Wing Block, Plastic Jar Etc by mis-declaration of value as detailed the SCN. 3.9 During the period July 2005 to April, 2006, Shreenath Enterprises filed 13 B/Es for clearance of different goods [12 consignments were cleared from JNCH and from Mumbai Customs and M/s. GNG filed 30 B/Es for the clearance of different goods out of which 24 consignments were filed through JNCH and 6 were filed through Air Cargo Complex, Mumbai, to mislead the department from knowing the actual value of the goods, they misdecalred the description of the goods and value. That actual value of the good should be as shown in the SCN/OIO. Appellants were issued show cause notices for recovery of duty short paid invoking the extended period of limitation under Section 29(1) and imposition of penalties under Section 114A, 114AA and 112 of the Customs Act, 1962. 3.10 The said SCNs have been adjudicated, demand of duty has been confirmed and RF and PP has been imposed vide the impugned Orders-in-Original dated 27.11.2012 and 03.12.2012. 4. Shri Anil Balani, Advocate Ld Counsel for the Appellants made the following submission: (1) The Show Cause Notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court has inter alia held as under:- (1) Burden to prove that confiscation was voluntary is on the department. (2) Court must bear in mind the time of retraction, nature and manner and other relevant factors to arrive at a finding. (3) Enquiry was not conducted on alleged remittance of foreign exchange abroad. (e) Prakash Pandya was arrested on 19.9.2007 and he was released on bail. In terms of the bail order Prakash attended the office of the DRI regularly thereafter. But no confessional statement was recorded. The SCN finally came to be issued after a long delay on 6.4.2010. (f) In view of Shri. Prakash Pandya's retraction, the department ought to have interrogated him again. (g) Shri. Prakash is alleged to have admitted that they have requested their supplier to give two sets of invoices- one for the bank and customs purpose and the other with the actual values. However, in the search operations the two sets of invoices were never recovered. This proves that the confessions were false. (h) In the circumstances, the learned Commissioner ought to have examined Prakash Pandya as laid down under Section 138 B of the Customs Act in the course of the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere obtained. The learned Commissioner ought to have asked the investigators to disclose the source of the email correspondence shown to prakash on 3.5.2006. It is well settled that the authenticity of the documents must be established before taking them into evidence. Reliance is placed on Section 139 of the Customs Act in this connection. 3) The Hong Kong Customs documents are not mentioned in the list of RUD (Annexure-A to SCN) and Prakash Pandya was never asked about the same while recording his statements. 4) Even for the computer printouts allegedly recovered from Prakash Pandya's computer, requirements of Section 138C were not fulfilled. In the case of Agarvanshi Aluminium Ltd. [2014 (299) ELT 83 (T) the Hon'ble CESTAT has held as under From the above provisions, it is clear that for admissibility of computer printout there are certain conditions have been imposed in the said section. Admittedly condition 4C of the said section has not been complied with and in the case of Premium Instruments Controls (supra) this Tribunal relied on the case of International Computer Ribbon Corporation 2004 (165) ELT 186 (Tri-Chennai) wherein this Tribunal has held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prevented the Appellants from countering the allegations made by the department more effectively. The action of the department is contrary to and in violation of CBEC Circular No. 42/88-CX dated 24.5.1988 and the law laid down by the Hon'ble Bombay High Court in the case of Silicon Graphics System (India) Pvt. Ltd. [2006 (204) ELT 247 (Bom.)]. (h) Regarding computer printouts (pages 13 to 19) mentioned in Sr.No. 17 of Annexure-A to SCN, no question was asked to anybody under Section 108. There is no confession about the same. Therefore it cannot be treated as incriminating evidence in support of the department's case. (i) Regarding Proforma Invoice dated 23.8.2005 (Page 9) showing value @$18/- relied upon in Sr.No.16 of Annexure-A to the SCN, no statement was recorded although it was allegedly shown to Prakash Pandya on 3.5.2006. Significantly it is not figuring on pages 124 125 of seized file No.A1. 6) The SCN has relied upon computer printouts also. In the list of relied upon documents on pages 77 78 Sr.No. 18 refers to printouts taken from the computer under panchnama dated 29.6.2006. However, for Sr. No. 19 which refers to emails correspondence with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evidence came on record to show that Telebrand is anything to do with the valuation of the imported goods purchased by them from the Indian suppliers. Therefore even if there is any undervaluation, it is on the part of the importer and Telebrand are nowhere concern with the import price. Shri Hitesh Israni in his statements never admitted any role in the valuation of the imported goods. It is also not under dispute that Telebrand has made the payment towards purchase of the goods which was billed and it is not the case that Telebrand made any payment over and above the invoiced amount. In this undisputed facts, there is no reason to implicate Telebrand in this case and therefore the Ld. Commissioner erred in imposing penalties on Telebrand and Shri Hitesh Israni. 5. ON the other hand Shri V.K. Singh, Ld. Special Consultant appearing on behalf of the revenue reiterates the findings of the impugned order. He made additional submissions as under: (i) On retraction - Statements of Shri Prakash Pandya were recorded on 19.04.2006, 21.04.06, 25.04.06, 03.05.2006 and 29.06.2006. In his statement he was shown his earlier statement and he confirmed that to be true and correct. That h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd it is stated that Shri Pandya in this statement has explained about the various entries made in costing sheet available at page 124-125 of the file seized on 18.04.2006. He has categorically stated that value shown in the costing sheet is correct value of the goods. The sheet prepared for showing to M/s Telebrand are other than these sheets. Costing sheets prepared and shown to M/s Telebrandare also enclosed with SCN. (reference to worksheet shown to M/s Telebrand is made in para 7.1.15 of the SCN). 5.4 The department has not proved that the documents in Para 9.1.3 of the SCN viz. was Statement of accounts given by China 5 Star Product, as there is no sign, stamp or seal of China 5 Star Products Co. Ltd. on the said documents. That instead of co-relating Pandya's confessional statement with the said statement, the commissioner should have held that the statements were not corroborated with any credible documentary evidence of undervaluation.- In this context it is submitted that this chart was received from M/s CNG and company during the course of search of his premises. When asked to explain about these details given in chart, Shri Pandya has explained that thesechart co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in terms of provisions of Section 28 of the Customs Act, 1962. In support of this submission, reliance is placed on the Hon'ble CESTAT Judgment in the case of M/s A.H. Incorporation vs. Commissioner of Customs, Delhi - 2013 (287) ELT 387 (Tri-Del). 5.8 Ld. Commissioner has invoked rule 4 and rule 8 of the CVR, 1988 simultaneously. As there was evidence regarding the actual transaction value of the goods, which was admitted by Shri Pandya. The Adjudicating Authority has correctly re-determined the value invoking provisions of Rule 8 of valuation Rules. 5.9 As this case where value has been mis-declared the demand has correctly been confirmed invoking the extended period of limitation. Reliance is placed on (i) 2010(256) ELT 369, Commissioner of C. Ex. Surat - I vs. Neminath Fabrics and (ii) 2010 (260) ELT 17(SC) (SC) Commissioner of Central Excise Aurangabad vs Bajaj Auto. 5.10 It is well settled law the Department is not required to prove its case with mathematical precision. Evidence as discussed above clearly shows that appellant had mis-declared the value of the imported goods in order to evade the payment of duty. 5.11 As regards role M/s. Telebrands India an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigating officer. Moreover, if at all there is any objection of the department on the said retraction, nothing prevented the departmental officers to reject the same with cogent reason or to record a counter statement in context with the retraction. We have seen that no such effort was shown by the department. In such situation, the retraction letter cannot be discarded. We are therefore of the view that statements which were retracted cannot be accepted as evidence. 7.1 It is seen that the prices at which the Appellants sold the imported goods to Telebrands India P. Ltd. is not disputed by the Department in the show cause notice, and is the actual local sale price paid to the Appellants by Telebrands India P. Ltd. 7.2 We find that although the Show Cause Notice and the impugned Order heavily rely on pages 124 125 from the seized file No. A1, and the values mentioned therein, however, it is seen that in the case of 5 in 1 Sofa Bed /Air Lounge the value mentioned in these seized documents has not been accepted for the purpose of valuation in the show cause notice itself, as evident from 2 nd row of table at Page 30 of the Show Cause Notice itself. Therefore, the contents o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidavits soon after they are made and which affidavits are again strategically withheld from the Revenue Officers, so that they become complacent and do not carry out a fuller investigation. It appears that the Revenue Officers in the present case have fallen victim to this type of strategic confessional statements which have been retracted soon after they were made in the affidavits which were withheld by the deponents till the proceedings came up before the Commissioner, by which time the damage of not a making fuller investigation, thinking that the confessional statements are made and not retracted, was already done. 7.3 The Hon'ble Supreme Court in Mohtesham Mohd. Ismail, 2007 (220) ELT 3 (SC), held that confession of a co-accused person cannot be treated as substantive evidence while observing in Para 16 of the said judgement as under:- We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvanthapuram [2006 (13) SCALE 386], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged emails correspondence with the suppliers is not disclosed. Such email correspondence from undisclosed sources was shown to Prakash on 3 rd May 2006 and his confessions were recorded. However, para 5.3 of the notice records that on 29.6.2006 the seal of the computer was broken for the first time and printouts were obtained. Even for the computer printouts allegedly recovered from Prakash Pandya's computer, requirements of Section 138C were not fulfilled. The authenticity of the documents therefore is not beyond doubt for accepting the same as substantive evidence. 7.7 A lot of emphasis was given by the Learned Commissioner on letter dated 14 th May 2007 of Deputy Head, Trade Investigation, Hong Kong addressed to the Consulate General India, Hong Kong contending that in the case of imports of Inflatable Sofa Beds from CNI - Creative International (HK) Ltd there were corresponding invoices issued by Creative Nations International Limited, Philippines on the Indian buyers which showed a higher price than that appearing in the invoices of CNI-Creative International (HK) Ltd. We are not impressed with the argument. We find that name of the appellant M/s GNG CO. do not eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector v East Punjab Traders 1997 (89) ELT 11 (SC), for the presumption under Section 139 to apply, authenticated copies of the Invoices referred to in the report ought to have been obtained from the Hong Kong Customs. The judgment of this Tribunal in the Best Co vs CC (supra) which is relied upon by the department, is not applicable in the peculiar facts of the instant case. In the present case the Hong Kong Customs report has not provided some information exercising informally extra-territorial jurisdiction. As per the observations of the Hon'ble Supreme Court in the case of CC v South India Television P. Ltd. - 2007 (214) ELT 3 (SC) and Collector v East Punjab Traders - 1997 (89) ELT 11 (SC) the authenticated copies of the foreign documents should have been produced by Customs. The aforesaid letter dated 14.05.2007 is not relevant to the import made by M/s GNG Co. as their name is not appearing in the said report. 7.8 There is no tangible proof of any payment to the foreign supplier by the Appellants or by Mr. Hitesh Israni of Telebrands India P. Ltd., of any amount over and above the prices mentioned in the foreign suppliers invoices. There is no cogent material whats ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... values, market values etc and then resort to an assessment of loading. Piece meal value loading re-adjudication is not envisaged under the Custom Act 1962 and cannot be upheld mere so when valuations as determined on the BE and assessed would be an order appealable adjudication order (see. CC Cochin V/s. Arvind Exports (P) Ltd. [2001 (130) ELT 54 L.B]. No review/ appeal against such an order of determination of value by the proper officer was taken by Revenue. The loading for USD 0.05 per pcs to USD 0.10 per pcs is final. That assessment, cannot be challenged by alleging misdeclaration of nature of goods, which the proper officer in the groups was in any case required to ascertain, the loading of value, on second check BE should not have been ordered. In this respect, Apex Court observations in the case of Mohan Mealun Ltd [2000 (118) ELT 3SC] paragraph 6 need appreciation 6 . If the Collector failed to make a proper enquiry as to the market value of the goods and released the same after half hearted adjudication. Half hearted adjudications and failure to make proper market enquiry in this case is to be believed, how the proper officer loaded only 0.05 USD pcs is not explained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not applicable to the facts of the present case inasmuch as here it is not the case of the Department that the Appellant firm somehow got the custom officer to enhance the value at the first instance and on the contrary the values of contemporaneous imports was the basis of first enhancement. In AG Incorporation (supra) the subsequent enhancement was done on the basis of contemporaneous imports and no lower contemporaneous price in terms of Rule 5 was available at the first instance. In SRK Enterprises v CC 2012 (280) ELT 264, the Tribunal held that to ignore a contemporaneous import at lower price which has been accepted by the department, would be totally discriminatory and untenable in law. 7.10 Thus, after detailed examination of facts and records we find that the demand of differential duty and penal action cannot sustain in the facts of the instant case. Since the undervaluation of imported goods is not established, all the other confirmation such as confiscation of the goods, fines in lieu thereof, penalties on all the appellants being consequential to demand of duty, are also not sustainable. We make it clear that since this order is passed on merit, we are not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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