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TMI Blog2018 (11) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... ady released provisionally). However confiscation of A4 copy paper is set aside - as no redemption fine has been imposed by the ld Commissioner, the order of appropriation of the bank guarantee furnished towards redemption fine is bad and accordingly the same is set aside. Penalty u/s 112(a) read with Section 114AA of the Customs Act - Held that:- The appellant M/s Balaji Overseas is liable to penalty under Section 112(a) read with Section 114AA of the Customs Act. However, such penalty is restricted to 100% of the duty sought to be evaded, as worked in terms of para 21 of this order - So for the penalty on the partner Mr Kshitiz Sharma is concerned, the same is set aside in view of the penalty confirmed on the firm - So far penalty on M/s Him Logistics under Section 112 of the Act is concerned, they have not done any act of omission or commission attracting the provisions of section 112 of the Customs Act. Accordingly the penalty on them is set aside. Appeal allowed in part. - Appeal No. C/51161, 52268 & 52269/2018-DB - FINAL ORDER Nos. 53248–53250/2018 - Dated:- 6-11-2018 - Shri Anil Choudhary, Member (Judicial) And Shri Bijay Kumar, Member (Technical) Shri Avijit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce it has been alleged that the appellant Balaji Overseas have indulged in evasion of custom duty by resorting to mis declaration of the goods under import. 6. Upon inspection of the aforementioned containers by DRI, during examination, a short quantity of declared goods was found, and a large quantity of undeclared/misdeclared goods being food supplements, was found as follows:- Declared Goods Found in Containers by DRI during examination on 13.01.2016 Container No. Description No. of Cartons Packets per Catron Total Number of Packets GESU4740611 Multi office stress free paper 80 GSM A4 (500 sheets) 521 5 2605 MANU5758717 516 5 2580 Total 1037 5185 Undeclared Goods found in container by DRI during Examination on 13.01.2016 S.No. Description Cartons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uscle Tech Platinum 100% Creatine Powder (Net Wt 0.88 lbs/400 gms) 89 6 534 6 ScivationXtend BCAAS Dietary Supplement (Net Wt 3.9 lbs/1.80 Kgs) 50 12 600 7 Muscle Tech Nitro Tech Dietary Supplement (Net Wt 3.9 lbs/1.80 kgs) 200 4 800 8 MHP Xpel Dietary Supplement (80 Capsules) 27 6 162 9 MHP Glutamine-SR 12 Hour Dietary Supplement (Net Wt 10.6 Oz/300 gms) 26 6 156 10 Muscle Tech Platinum 100% Glutamine Dietary Supplement (Net Wt 10.65 Oz/302 gms) 46 6 276 11 MHP BCAA 10 X Dietary Supplement (Net Wt 10.6 Oz/300 gms) 44 12 528 12 BSN Amino X Dietary Supplement (Net Wt 15.3 Oz/435 gms) 256 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kshitij Sharma, Partner of M/s Balaji Overseas was recorded on 13 th January, 2016 wherein he allegedly admitted the mis-declaration regarding import of goods/food supplements. 8. Another statement of Mr. Kshitij Sharma was recorded on 14 th January, 2016 wherein he stated that the goods covered under the Bill of Entry No. 3866704 was the first consignment imported by M/s Balaji Overseas. That the order for supply of food supplements was placed telephonically, on Mr. Mukul @ Mike, who was working with Sea Efforts Ltd., China. Further, he approached the CHA- M/s Him Logistics Pvt. Ltd., New Delhi and submitted KYC and other documents like invoice, etc., for customs clearance. He further stated that he was aware that for import of food supplements, the same requires NOC from FSSAI before clearance. Mr. Sharma was shown by the officers, the print out of similar food supplements available on various internet sites wherein the retail prices of the respective items offered in India was mentioned. Based on such data, he was shown a calculation chart of the value and duty of the food supplements imported by him, as listed in the tables herein above. That the value and duty was calcula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 11 th April, 2016. The provisional release was allowed vide communication dated 23 rd August, 2016, by the Department on the following terms. Payment of Customs duty of ₹ 6,60,675/- as declared in the Bill of Entry No. 3866704 dated 13.01.2016 Submission of Bond of ₹ 2,34,81,523/- equivalent to re-determined value of seized goods i.e. food supplements not containing beef proteins and A4 plain copy paper; Furnishing of Bank Guarantee of ₹ 40,87,525/- equivalent to 30% of differential Customs duty of food supplements not containing beef proteins and A4 plain copy paper; Furnishing an undertaking that the importer will not dispute the identity of the seized good; 11. It appeared to Revenue that the value of the undeclared imported goods found concealed with the declared goods, under Section 14 is not available, as there is no declared transaction value. Hence in terms of Section 14 (2), value shall be determined as per the Customs Valuation (Determination of Price of Import Goods) Rules, 2007, hereinafter called the Valuation Rules . It appeared to Revenue that under Rule 3 of the Valuation Rules transaction value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplements, and after allowing deduction towards transport cost, insurance cost, customs duty, reasonable profits margins, etc. Taking the MRP (per unit price) from the internet, valuation was done, giving rebate of 35% on MRP, working the assessable value as follows- Assessable Value of Food Supplements Containing Beef In Rupees S.No. Description Quantity MRP Total MRP Total Assessable Value 1 Muscle Meds Ultra Concentrated Carnivore Beef Aminos 100% Beef Protein (300 tablets) 156 1326 206856 79143 2 Muscle Meds Bioengineered Beef Protein Isolate Carnivor (Net Wt 4 lbs/1.808 kgs) 1000 3558 3558000 1361291 3 Muscle Meds Ultra Concentrated Carnivore Beef Aminos 100% pure Beef Protein (300 tablets) 1044 1326 1384344 529650 4 Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not produced for confiscation, under Section 125, these goods are not available for confiscation. though they are liable for confiscation. The bank guarantee furnished was ordered to be appropriated towards redemption fine that could have been imposed on these goods upon confiscation. The duty determined recoverable from the appellants, M/s Balaji Oversees and further appropriation of the amount already paid for ₹ 6,60,790/- was ordered. A penalty of ₹ 10 crore was imposed on the appellant, M/s Balaji Oversees under Section 112 and 114 AA of the Act and similarly penalty of ₹ 5 crore was imposed on Mr Kshitiz Sharma. Further, penalty of ₹ 12,50,000 was imposed on M/s. Him Logistics under Section 112 of the Customs Act. 15. Being aggrieved, the appellants are in appeal before this Tribunal the learned counsel for the appellant states that the allegations made against the appellant importers are completely wrong without any basis. The appellant had mainly ordered for A-4 copier paper and never ordered for food supplement. It is only on account of the mistake on the part of the packing staff of the exporter/shipper that the goods meant for some other e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as a confessional statement and cannot be relied upon for drawing adverse inference. 19. That the goods under import not containing beef have been valued by the respondents on the basis of NIDB. The learned counsel states that revenue have valued as per rule 3 and 4 of the Valuation Rules for the reason that NIDB data taken by the Department for similar/identical goods being imported in various ports throughout the country, contains food supplements which are imported from USA. Thus, these are not of Chinese origin as in the case of the appellant. That the goods manufactured and coming from China, are not identical or similar to goods from USA and hence prices are not comparable. Therefore, the value of the goods can only be computed under Rule 7 of the Valuation Rules, that is, the deductive value method which provide for subject to the provisions of Rule 3 of the Rules, the goods being valued are identical or similar imported goods, are sold in India, in the condition imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on the unit price at which the imported goods or identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2,29,03,044/- as per Rule 7 of Customs Valuation Rules, 2007. The value calculated is as follows:- THE VALUE IS COMPUTED AS FOLLOWS: The value of the goods as per the department is ₹ 2,29,03,044/- which is taken from the internet, which is a fact admitted by the department in the subject show cause notice and as evident from the judgments cited above the value of the goods cannot be taken under Rule 3 and Rule 4 of the Customs Valuation Rules, 2007 and the necessary deductions as per Rule 7 of the Customs Valuation Rules, 2007 will be as follows: i. 30% of the Customs Duty ii. Percentage of commission: 5% iii. Percentage of transportation: 5% Computation Table: Sl. No. Value of Goods (as per department) Deductions (as mentioned above) Exact value as per Rule 7 1 2,29,03,044/- 40% (including customs duty, commission charges and transportation charges) 1,37,41,826/- Therefore, as per the above computation after deducting 40% from the internet value of the goods as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 12.5 lakhs imposed upon them is bad and fit to be set-aside. It has been alleged that, Him logistics have actively and knowingly aided and abetted M/s Balaji Oversees and its partner, and thus they were hand in glove with them in the attempt to smuggle undeclared as well as prohibited goods. M/s Him logistics paid the customs duty for the said consignment on behalf of the importer M/s Balaji oversees. They also handed over the customs KYC documents to M/s KVS Cargo custom broker, in the aforementioned Bill of entry. That M/s KVS cargo filed the Bill of entry. The fact of handing over of KYC documents and other documents have been stated by the proprietor of M/s KVS cargo, as the said documents were delivered to them by Him logistics. Thus, the appellants have been held liable to penalty under section 112 of the Act. 29. The learned counsel further urges that appellants, M/s Him Logistics is neither the CHA nor the importer for the purpose of the present case. Neither M/s Him logistics have been held to be a co-importer along with M/s Balaji Oversees. Further it is by way of procedural practice that the CHA - customs broker deposits the customs duties on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Shri Kshitiz Sharma recorded on 13 th and 14 January 2016. This plea was taken for the 1 st time after about 2 months, based on the letters of the exporter dated 6 th March 2016 and 9 March 2016. If the mistake was genuine, the supplier would have come to know about the blunder much earlier and later or sooner after the shipping. Further, the statement of the foreign supplier is not reliable as he may be hand in glove with the appellants. Further it is established law that in case of breach of a civil obligation, attracting penalty, existence of element of mens rea is not required for imposition of punishment/penalty. 31. So far the contention of the appellant that the statement of Kshitiz Sharma has got no evidentiary value in view of the retraction made, it is stated that such ground was not raised before the adjudicating authority. Mr Kshitiz Sharma did not complain of any ill treatment or coercion when he was produced before the CMM. Further Mr. Sharma did not inform about the retraction of his statement to the authority before whom he recorded the statement. Subsequent retraction cannot take away the effect of the statement recorded under section 108 of the Act, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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