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TMI Blog2018 (10) TMI 1574X X X X Extracts X X X X X X X X Extracts X X X X ..... d) is not applicable in as much as there is no mis-declaration of goods. Further, the Department has not produced any evidence to show that the relationship between the parties has influenced the price. Therefore, the reasons for rejecting the transaction value is not in consonance with law and therefore liable to be set aside. also the goods are not liable for confiscation as well - Since the charges of misdeclaration undervaluation are not sustainable in law, the differential duty demand is liable to be set aside along with penalties imposed and redemption fine imposed. Appeal allowed - decided in favor of appellant. - Appeal No. C/50238 and 51246/2018 (DB) - C/A/53182-53183/2018-CU[DB] - Dated:- 26-10-2018 - SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) And SHRI BIJAY KUMAR, MEMBER (TECHNICAL) Appellant: Shri Aneesh Mittal and Shri Pawanshree Agrawal, Advocates Respondent: Shri Rakesh Kumar, AR ORDER Per Anil Choudhary: The appellants are in appeal against the impugned Order-in-Appeal has held that there is a case of misdeclaration by the appellant, a manufacturer of carpets, which had been imported are used and old carpets. Two bills of entry dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard. Thus, second-hand or used were not freely importable. In the absence of specific import licence, the consignment of carpets/Rugs was found liable to confiscation under Section 111 (d) of the Customs Act. Vide order-in -original dated 15/12/2010 passed by the Additional Commissioner of Customs, Nhava Sheva, Mumbai. Accordingly, order of confiscation was passed with option to redeem on payment of fine ₹ 2 lakhs. Further, penalty of ₹ 50,000/- was imposed on the appellant company under Section 112 of the Customs Act, 1962. 4. Subsequently, the appellant imported further consignment at ICD, Mandideep and filed bill of entry No.2842630 dated 24.02.2011 declaring country of origin as USA. The said consignment was detained and was examined by the officers of DRI, Mumbai under punchnama dated 10/11/2011 at ICD. It was noticed that most of the carpet rolls were having made in India tags, whereas the import documents, including the bill of entry mentioned the country of origin as USA. The carpets appeared to be old. The unit price of the carpets was declared as USD 2.00 per square yard, which appears to be on the lower side. Statement of the Director, Shri L. R. Maury ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... release, the appellant filed writ petition before Hon ble High Court of Madhya Pradesh, which vide its order dated 10.05.2012 was pleased to quash the provisional assessment order dated 12.10.2011, holding it to be a harsh and ordered issuance of a fresh order of provisional assessment taking into consideration the facts of the case and in compliance therewith a fresh provisional assessment order dated 20.06.2012 was passed by the Dy. Commissioner of Customs, ICD, Mandideep directing the appellant, the importer to pay provisionally assessed duty of ₹ 9, 65, 585/- along with a bond and bank guarantee of ₹ 38, 25,658/-for the two bills of entry dated 24.02.2011 and 11.05.2012 together. Being aggrieved, the appellant again approached the Hon‟ble High Court of Madhya Pradesh, by way of a writ petition challenging the order dated 20.06.2012 of the Dy. Commissioner of Customs, ICD, Mandideep and the High Court by its order dated 28/01/2013 directed the appellant to deposit 20% of the provisional assessment duty in cash or by way of demand drafts and for the remaining amount of duty, the appellants was directed to furnish a bond alongwith bank guarantee to the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 4 or 5 of the Customs Valuation Rules is not available and further, adequate data for adopting the value under Rule 7 or Rule 8 of the Customs Valuation Rules, 2007 is also not available. Accordingly, Rule 9 was adopted for valuing the carpets under import. The said Rule 9 of CVR, 2007 stipulates that the value shall be determined using reasonable means consistent with the principles and general provisions of these rules. Accordingly, observing that the appellant have not cooperated in working out the deductive value, Revenue worked out the value at USD 4.89601 per square feet and further observing that as the carpets are imported after about three years, allowed depreciation @ 10% on straight line basis and thus arrived at the value of USD 3.42721 per square feet. Accordingly, the consignment under export was re-determined on such an adopted value by the Revenue and thus re-valued at ₹ 40,22,416/- as against the declared value of ₹ 12,14,756/- and thus worked out a difference of ₹ 28,07,660/-. Accordingly, the appellant was required to show cause as to why the declared value be not rejected for the carpets imported vide the two bills of entry dated 24.02.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at by mentioning the wrong country of origin any advantage could be derived by the appellant. A bleak support has sought to be drawn up by the department from the statement recorded on 07.04.2011 (the veracity of which is doubtful as indicated above), where it was stated that wrong country of origin was mentioned to hide the fact that goods were old or used. This aspect is completely unbelievable. The entire case of the appellant is that declaration was that the goods were old and used, and therefore the value of goods imported are less, than why will the appellant try to hide the said fact which is evident, by declaring country of origin as USA. The allegation of department is presumptive and without any merit. 9.2 That in sofar as Bill of Entry dated 11.05.2011 is concerned, there is actually no misdeclaration and unnecessary case has been set up with regard to two sets of documents and difference of 18 rolls of carpets. As regard the first part it has been lucidly explained initially that there is no two sets of documents. As regards second part, it is submitted that there is no difference in the total meansurement which has been declared in sq.yds. in the Bill of Entry. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department should have looked for the similar or identical goods imported around the same time. In any case in the case of the appellant, First Bill of Entry value was available, which was of the similar or identical goods around the same period, which could have been relied upon by the Department. 9.6 Further, the Department has applied the depreciation method on the export mean value calculated on the export prices of the appellant in the year 2007, by treating that as a reasonable method. It seems that department has treated carpets as electronic goods. Depreciation cannot be the reasonable basis for valuing old and used carpets as old and used carpets become obsolete because of old design and use and has virtually no commercial value. Nobody will buy a used carpet or the old one with obsolete design and will have no worth. The department has not undertaken any exercise to get the same valued by the carpet manufacturing units as it was found that the goods were Made in India . No proper examination of the goods has been made. Thus the impugned orders valuing the goods at higher than the transaction or declared value is liable to be set aside. 9.7 That redemption fine is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SA with respect to Bill of Entry dated 24.02.2011. We find that the appellant wanted to correct the said error under the provision of Section 149 of Customs Act, however, that request was not acceded to by the Department. We find that said error is purely clerical in nature, as the appellant had declared the goods as old and/or used. Only on the said basis, it cannot be said that the appellant has misdeclared the goods in order to clear their goods. With respect to second Bill of Entry dated 11.05.2011, we find that there is no misdeclaration by the appellant as alleged by the department. 12. That sofar the enhancement of value is concerned, we find that Rule 12(2)(iii)(d) is not applicable in as much as there is no mis-declaration of goods. We further find that the Department has not produced any evidence to show that the relationship between the parties has influenced the price. Therefore, we find that the reasons for rejecting the transaction value is not in consonance with law and therefore liable to be set aside. We also find the goods are not liable for confiscation as well. 13. Since the charges of misdeclaration undervaluation are not sustainable in law, the differ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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