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TMI Blog2018 (10) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation in the show cause notice, it is clear that even for the charge of undervaluation, the reason stated is mis-declaration of the description of Opal ware as Glass ware and the claim of classification of goods is under CTH 7013 39 00 instead of under CTH 7013 32 00. Since, now the charge of misdeclaration of goods and classification does not exist, the case of undervaluation of the Revenue fails on this ground itself. Other evidences in support of Revenue’s allegation of undervaluation - Revenue has relied on two parallel invoices found in the premises of M/s. Vishal Hira Merchant Pvt. Limited, Delhi - Held that:- The enhanced price of the goods is not based on these parallel invoices, therefore, this evidence of parallel invoices is discarded and the same cannot be used against the respondent. It is also pointed out by the ld. Counsel that the said invoices are not authentic as the same does not show that it belongs to the supplier. It also does not show that the price is meant for all customers across the world or applicable to all customers in India. Therefore, the invoices of M/s. Vishal Hira Merchant cannot be used as evidence against the respondent. Email exchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and classification. Therefore, in this scenario, when no mis-declaration is involved, no suppression of facts exists. Hence, the extended period for demands proposed in the show cause notice also not sustainable and therefore, the demand for the extended period is set-aside also on the ground of limitation. Appeal dismissed - decided against Revenue. - C/12024/2014 –DB - A/12057/2018 - Dated:- 3-10-2018 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) For the Appellant-Revenue : Shri S.N. Gohil, Superintendent (AR) For the Respondent : Shri T. Vishwanathan and Shri Manish Jain, Advocates ORDER PER : RAMESH NAIR The brief facts of the case are that the respondent are regularly importing various tableware and household items which includes glass ware made out of opal glass like dinner sets which are supplied directly by the manufacturer M/s. Wenzhou Huishunda Industrial Trade Company Limited, China (for short Wenzhou). The respondent entered into a long term arrangement and agreement to purchase opal glass ware from the supplier. The said goods are manufactured by the supplier exclusively for the respondent as per the desig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems fall within the same heading 70.13 covering glassware and attracting the same rate of duty. According to DRI, the respondent have mis-declared the description of the goods and also classification and consequently, in the show cause notice, the invoice price/ transaction value is liable to be rejected in terms of Rule 6 of Customs Valuation Rules, 1988 which is based on the following:- (a) A price list dated 09.02.2004 found in the premises of M/s. Vishal Hira Merchants Limited; (b) E-mail correspondence exchanged between M/s. Wenzhou Huishunda Industrial Trade Company Limited, China and M/s. K.P. International, New Delhi containing offer/counter offer/ negotiation between these two entities regarding sale/ purchase of goods. The show cause notice also relied upon two parallel invoices found in the premises of Delhi based importer M/s. Vishal Hira Merchants Limited. Further, the value of the goods imported by respondent were not worked out on the basis of invoices found in the premises of the said importer. On adjudication, the Commissioner of Customs, Ahmedabad vide order dated 17.10.2008, confirmed the proposals made in the show cause notice. Being aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue s appeal. 3. Shri T. Vishwanathan, ld. Counsel along with Shri Manish Jain appearing on behalf of the respondent, made the following submissions:- (i) That, Order-In-Original dated 31.01.2014 is liable to be upheld. One and the only reason given in the show cause notice dated 23.07.2007 and dated 17.10.2008 for rejecting the transaction value was mis-declaration of description of the imported goods and mis-classification of the imported goods . The said reason is no longer available to reject the value and hence, the value of the imported goods was accepted in its face value, in the absence of any circumstances mentioned in Rule 4(2) of the Customs Valuation Rules. (ii) As can be seen from para 16 of the show cause notice and para 48 of the order dated 16.10.2008 passed by the Commissioner, the sole reason given for rejecting the transaction value was mis-declaration. (iii) Hon ble CESTAT, Ahmedabad, vide para 10 of the Final Order dated 29.10.2012 has held that there is no mis-declaration of the description of goods by the respondents. It was also held that no mis-classification of the imported goods. In fact, the CESTAT has upheld the classification un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. There is not even an averment that the investigating officers found any incriminating documents from any of the premises of the respondents, when they resumed a number of documents, under various panchnamas. (xiii) In the circumstances, invoice price alone can be the value Section 14. Value cannot be enhanced based on third party documents. Thus the Order-ln-Original dated 31.01.2014 is liable to be upheld. 4. The ld. Counsel further submits that evidences relied upon in the show cause notice do not support the enhancement of the value and in this respect his submissions are that: (i) The two parallel invoices were allegedly found in the premises of M/s. Vishal Hira Merchants Limited, Delhi are not the basis for demanding duty from the respondents. (ii) The price list resumed by the department from the premises of M/s Vishal Hira Merchant Limited and relied upon by the department is not authentic. It does not show that it belongs to the suppliers. It also does not show that the price was meant of all customers across the world or applicable to all customers in India. It may be a price list for M/s Vishal Hira Merchants Limited. Also, no evidence is cited in the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act as the Hon'ble CESTAT has held that respondents have not mis-declared the goods. 7. We have carefully considered the submissions made by both the sides. This is second round of litigation. In the first round of litigation, the respondent had filed appeal before this Tribunal against the earlier order-in-original. In the earlier appeal, the issue of mis-classification and undervaluation was involved. The Tribunal in the earlier appeal No. C/485-486/2008 passed final Order No. A/1568-1569/WAB/AHD/2012 dated 29.10.2012, reported as 2014 (314) ELT 394 (Tri. Ahmd.). By the said order, the matter was remanded to the Adjudicating Authority. The findings of the Tribunal s order dated 29.10.2012 is reproduced below:- 4. The department has taken a view that Hamilton has mis-declared the description and also the classification of the items in dispute. Before we proceed to consider mis-declaration of description, it would be appropriate to consider the dispute regarding the classification first. The disputed tariff headings are to be found under 7013 as under in Customs Tariff : 7013 Glassware of a kind used for table, kitchen, toilet, off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold that the goods are correctly classified under CTH as claimed by the department. Unfortunately, even though in the test memo query had been raised to determine linear coefficient of thermal expansion, the Chemical Examiner simply stated that the fact that there was no breakage on heating and cooling would indicate low linear coefficient of expansion and he has not quantified the same. On the other hand, the supplier of the goods had certified the coefficient thermal expansion of the imported goods as 5.9 10-6 per Kelvin and the appellant got tested the imported goods at Central Glass Ceramic Research Institute (CGCRI), Kolkata. The Institute certified that the thermal expansion of the imported goods is 6.99 10-6 per Kelvin. Thus we have a situation where the supplier s certificate and the certificate obtained by the importer are contradictory to the report of the Chemical Examiner. 7. Hamilton contended that the Chemical Examiner has determined the boron content as per procedure prescribed in the manual maintained by M/s. Alembic Glass Ltd., which is not a standard for determination for boron content. That also contended that the precise method prescribed is IS 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Chemical Examiner in the test report that, since there was no breakage on hearing and cooling, it indicates lower linear coefficient of expansion. How can we conclude whether it is below the level prescribed in the heading or not is not indicated by the Chemical Examiner. We could have appreciated if he stated clearly that it is lower than what is prescribed in the tariff heading. Even this is not forthcoming from the reports. On the other hand, the supplier of the appellants and CGCRI has clearly measured the linear coefficient of expansion and have indicated the same. Under these circumstances, we have no option but to hold that the department has failed to show and prove that the classification of the goods in question would come under 7013 32 00. 9. The next question that arises is whether there was misdeclaration of description by the appellants. On going through some of the Bills of Entry filed in ICD, Vapi, we find that after opening the packages and inspection, the examining officer had found the goods to be contained in 2 packages and the goods were found to be Opal Glassware Dinner Sets . The fact that even after finding the goods to be Opal Ware on examination, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant that the goods were specially designed for them with different art work, the Commissioner had observed that this would actually increase the rate and not decrease the rate. As regards reliance on the e-mail and submissions of the appellants that there was no evidence to show M/s. K.P. International had imported the goods figuring in e-mail, the Commissioner has observed that differential duty of ₹ 90 lakh was paid by M/s. K.P. International and they have already approached the Settlement Commission for settlement of the case. As regards contentions that price redetermination has to be made on the basis of contemporaneous price, the Commissioner has stated that it was admitted by Shri Vishal Konde, General Manager, that there was no escalation in the price of M/s. Wenzhou and therefore reliance on price list of 9-2-2004 and E-mail, dated 15-3-2004 and evidence in the form of parallel invoices is rightly placed for determination of value. As regards submission about contemporaneous value declared by other importers, the value other than in e-mail and the price list, the Commissioner has observed that it is open to the jurisdictional authority to take up investigation and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of any evidence to show and any admission by the company to show that actual transaction value was higher in the absence of any admission of excess payment and its quantum, it was necessary for the Commissioner to follow the Customs Valuation Rules after rejecting transaction value for which we find that there are ground made out even though appellants had resisted this. Having rejected the transaction value, the next step was to proceed to determine the value by following the rules. As submitted by appellants, the proper course for the Commissioner was to apply Rule 6(2) read with Rule 5(3) of Customs Valuation Rules. In this case transaction value of similar goods by other importers was available and for rejecting the same it should have been shown that the department has not accepted those values, by taking appropriate action. Whereas the Commissioner has simply stated that it is for the jurisdictional authorities to take action. In this case while price list of February, 2004 has been relied upon, no adjustment taking the peculiar circumstances into account has been made. The MoU has been rejected on the ground that it covers only 2 items and there is no indication whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Adjudicating Authority for fresh adjudication after observing principles of natural justice, taking note of following observation : (1) The re-valuation has not been done in accordance with the provisions of law. 8. On careful reading of the above order of the Tribunal, it is observed that the Tribunal has concluded, as recorded, the charge of mis-declaration of description and mis-classification is not sustained. The Tribunal in the aforesaid order made various observations as regards the valuation of the goods also and after considering the said observations, the ld. Commissioner in de-novo adjudication, dropped the proceedings initiated against the respondent vide show cause notice dated 23.03.2007 and the ld. Commissioner also clearly held that as per the Tribunal order, the issue of mis-declaration and mis-classification does not exists. Therefore, the limited issue now to be decided by us is whether the appellant have undervalued the goods in question or otherwise. As regards the valuation of the goods, it is observed that in the show cause notice, the sole reason given for undervaluation was on the basis of mis-declaration of goods. The Tribunal in the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exist, the case of undervaluation of the Revenue fails on this ground itself. 8. As regards the other evidences in support of Revenue s allegation of undervaluation, we find that the Revenue has relied on two parallel invoices found in the premises of M/s. Vishal Hira Merchant Pvt. Limited, Delhi. However, enhanced price of the goods is not based on these parallel invoices, therefore, this evidence of parallel invoices is discarded and the same cannot be used against the respondent. It is also pointed out by the ld. Counsel that the said invoices are not authentic as the same does not show that it belongs to the supplier. It also does not show that the price is meant for all customers across the world or applicable to all customers in India. Therefore, the invoices of M/s. Vishal Hira Merchant cannot be used as evidence against the respondent. As regards the email exchanged between supplier and M/s. K.P. International, it is not the conclusive evidence for the reason that it contains only offer/ counter-offer between the parties and it is exchanged with M/s. K.P. International only for enquiring about the price. There is no evidence that goods have been imported by M/s. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of facts exists. Hence, the extended period for demands proposed in the show cause notice also not sustainable and therefore, the demand for the extended period is set-aside also on the ground of limitation. 9. On perusal of the impugned order, we find that the ld. Commissioner has very carefully considered the observations made by the Tribunal in the remand order and also each and every charge made in the show cause notice together with analyzing various judgments in the case of Adani Exports Limited vs. CC, Vishakhapatnam 2000 (116) ELT 715 (Tri.), CC, Vishakhapatnam vs. Aggarwal Industries Limited 2011 (272) ELT 641 (SC), Shalimar Industries Limited vs. CC, Madras 1996 (88) ELT 769 (Tri.) and Sawhney Exports House (P) Limited vs. CC 1992 (60) ELT 327 (Tribunal, to come to the conclusion that there is no undervaluation of the goods imported by the respondent. From the impugned order, we do not find any infirmity and therefore, the order deserves to be sustained. Accordingly, the impugned order is upheld and Revenue s appeal is dismissed on merits as well as on limitation. We find that the respondent has also filed a misc. application for release of bank guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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