9911796707
TMI Blog2020 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ch have been imported and cleared for home consumption after due assessment. It is evident that Shri Satish Luthra has not been held to be an importer before the clearance of goods for home consumption and as such he cannot be held to be an importer after the clearance of the goods for home consumption - for the purpose of Section 2 of the Customs Act 1962, Shri Satish Luthra cannot be held to be an importer and as such cannot be a person referred to in Section 28 of Customs Act 1962. Therefore, neither the demanded duty nor the imposed penalty can be held to be devolved on Shri Satish Luthra. Under-valuation of goods - HELD THAT:- The entire allegations in the show cause notice and consequently the impugned order are based on statements of different persons. Some of them have been since retracted. All the impugned goods imported by or imported in the name of nine importers have been cleared for home consumption by the proper officers. The Department has sought to re-determine the value of such goods which have been already cleared for home consumption without filing appeals against the respective assessments in the Bills of Entry. We find that Learned Commissioner has been cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l allowed - decided in favor of appellant. - Customs Appeal No. 786 of 2010,859 of 2010, 868 of 2010, 911 of 2010, 912 of 2010, 914 of 2010, 915 of 2010, 917 of 2010, 919 of 2010, 920 of 2010, 921 of 2010,21 of 2011, 22 of 2011, 23 of 2011,24 of 2011,59 of 2011,60 of 2011,61 of 2011,62 of 2011 - A/85555-85573/2020 - Dated:- 11-3-2020 - HON BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Appearance: Shri Ramesh Kumar, AC,Authorized Representative for the Appellant/Respondent Revenue Dr. Prabhat Kumar, Advocate Shri C.M. Sharma, Consultant for the Respondent/Appellant Assessee Per: P. Anjani Kumar Based on intelligence received, the officers of the Directorate of Revenue Intelligence, Delhi Zonal Unit (hereinafter referred to as DRI) conducted searches at the office/ business premises of Shri Satish Luthra, MD of M/S Ramakrishna Electro Components Pvt. Ltd., (RECPL in short) and some of the other importers, namely, M/s Communication Trade Links, M/s Unique Trade Links, M/s Radhe International, M/s Oberoi Import Export, M/s Sanjay Enterprises, M/s Universal Electronics, M/s Simran Exports and M/s Shiv Enterprises; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 8 Radhe International 22,35,269 5,00,000 1,33,000 Kanchan Kumar Kora 9 Sanjay Enterprises - 2,00,000 10 Sushil Goel 2.50,000 11 Vijay Chand Baid 2,50,000 2.1. Hence, Satish Luthra and the proprietors of the six firms are in appeal against the confirmed demand. Three firms and/or their proprietors i.e. Unique Trade Link, Oberoi Import Export and Sanjay Enterprises are in appeal seeking refund of the duty deposited in their names. Shri Sushil Goyal and Shri Vijay Chand Baid are in appeal against the penalty imposed on them. Department is in appeal against a portion of demands dropped; non-imposition of penalty under section 114A equal to duty and interest and dropping of penalty against Harish Luthra. 3. Shri C.M. Sharma, Consultant, appeared for the following Appellants/ Respondents: (i) Communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Vs CC (Prev) 2017 (357) E.L.T. 383 (Tri-Mum) CC (Imports), Mumbai Vs Lord Shiva Overseas- 2005 (181) E.L.T. 213 (Tri. - Mumbai) Hitaishi Fine Kraft Indus. Pvt. Ltd Vs CC, West Bengal 2002 (148) E.L.T. 364 (Tri. - Kolkata) 3.4.Shri C.M. Sharma further submits that while the SCN seeks rejecting the values under Rule 10/10A of the CVR, 1988 and redetermination of value under Rule 5 of CVR, 1988, based on identical imports, the impugned order held that only the Branded Goods are identical and that ST Micro Electronics and Sanyo Semiconductor Pte Ltd., Singapore price lists and the values of the identical goods are the basis for re-determined values; the impugned order does not discuss no evidence that the goods imported are compared favourably with the goods with which comparisons are being made as regards Country of origin, quantity imported and timing of imports; no enquiry was conducted for invoking Rule 10 and 10A, and no mandate therein observed. Commissioner Vs Venus Insulation Products Mfg. Co. 2003 (153) ELT A172 (SC) Venus Insulation Products Mfg. Co Vs Commissioner2002 (143) ELT 364 (Tri. - Del.) 3.5.Shri C.M. Sharma further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination reports are not made available / considered; The variation in the declared values and re-determined assessable values have not be shown in the impugned order and if such variations are in normal course of trade and attendant circumstances. Shri Satish Luthra has nothing to do with business of Appellant herein. Impugned Order travelled beyond SCN and is thus non est. It is a settled principle of law that orders travelling beyond show cause notice are non-est as held in the following. Carborandum Universal Ltd Vs Commissioner 2007 (211) ELT 105 (Tri. - Chennai) (affirmed in 2008 (223) ELT A 94 (SC) Volvo India Private Limited V/S Cc, Chennai 2005 (180) 489 (T) Vijay Power Generators Ltd. V/S CCE, Meerut 2001 (129) ELT 663 (Tri. Del) CCE, Mumbai-I V/S Parekh Plast2000 (124) ELT 1016 (T) Kalyani Sharp India V/s, Pune 2005 (187) 315 (T) 3.7. Shri C.M. Sharma submits, in respect of Unique Trade Links, New Delhi (Appellant in C/ 24/2011 Respondent in C/ 915/2010), that the impugned order has not demanded any duty or imposed any penalty; an amount of ₹ 35 Lakhs deposited by them in February, 2005 / Mar, 2006 has been ordered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared were branded at the time of import and it was very obvious that the goods are identical. Commissioner has erred in upholding the depositions made in the retracted statements despite admitting (in para-63.3.2) that.....I find from the case records that goods worth about ₹ 1.39 crores were seized on 31 01-05 and 28.2.2005 which remained locked out of business till end of July 2005. This might have put pressure on the owner of the goods; after admitting the kind of pressure that was exerted by DRI for extracting the desired statements, Commissioner has fallen back and rejected the retractions filed by Mr. Satish Luthra on 3.2.2005 and 8.2.2005 in respect of statements recorded on 31.1.2005 and 1.2. 2005; statement recorded on 7.3.2006 was retracted by Mr. Satish Luthra on 8.3.2006; though this statement was recorded after release of the seized goods - released on 29.7.2005 -- but there are a multifarious forms of exerting pressure other than blocking the goods from business mainstream. 4.3. Shri Prabhat Kumar further submits that Commissioner has erred in rejecting examination reports and outcome of cross-examination of AOs and Eos, who testified that the goods examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds supplied by M/s Ascend International, Hong Kong or and M/s. Stride Promotion Pte Ltd, Singapore were duly examined by the officers; no discrepancy was ever found; there is no basis for the main allegation that branded goods were imported in the guise of unbranded goods was incorrect; during cross examination officers categorically stated that imported goods were duly checked and no discrepancy has ever been found. (ii).appellants were not provided with examination reports, stating that the examination reports are not relied upon; it is not understood as to how the case of under-valuation can be booked against the appellants without having a look at the same; no vigilance case booked against any of the officers, who according to DRI had connived in not reporting the branded nature of the goods. (iii). Values (Annexure A-4) given in some imports made by RECPL were relied upon; apart from this, no details of misdeclaration furnished to the Appellants; comparison of values is odious as it does not meet the requirement of Customs Valuation Rules, 1988 as there is no similarity. (iv). The basic charge of the goods being branded is without any evidence, factual or otherwise; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii). CC Vs Iron Master India Pvt Ltd - 2003 (157) ELT A151 (SC) (iii). Tech Tronix India Vs CC (Port), Kolkata-I 2006 (203) ELT 301(Tri - Kolkata (vii). Rejecting the examination reports and assessment in such large number of cases that too without any contra evidence is total disrespect to the Customs authorities concerned; DRI does not have any authority over the assessment of those consignments which were done at a higher value than the declared in the respective invoices; rejection of such assessments simplicitor is not permitted under the law in view of the cases of Mohan Meakins(Supra) and Lord Shiva Overseas (Supra). As no samples were drawn for comparison and as no examination reports were made available, the entire charge of under valuation can be assumed to be based on mere presumptions and assumptions, without scrutiny of documents and without ascertaining the facts; they rely upon Oudh Sugar Mills Ltd Vs UOI 1978 (2) ELT (J 172) (SC-Constitution Bench). (viii). From the definition of Identical goods as appearing in Rule 2(c) of Customs Valuation Rules 1988, it is clear that identical goods have to be same in all respects including physical char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Counsel, for that the appellant Shri Sushil Goel, Appeal No. C/786/2010, submits that penalty of ₹ 2.50, 000, has been imposed on him under Section 112 (a) of the Customs Act, 1962, though a separate penalty has been imposed upon the firm M/s Communications Trade Links and 8 others firms controlled by Shri Satish Luthra as well as on other co-noticees; appellant has given no objection and had not made any entry in the bill of entries and therefore, Sections 14, 14 (1) 14 (1A)of the Customs Act,1962 and Customs Valuation (Determination of Price of Imported Goods) Rules 1988, are not applicable in the present case qua him; entire case has been made against the appellants on the basis of statement of Satish Luthra, who is quoted to have stated that he remitted the differential of the actual price and the under invoiced price declared before the Indian Customs to the foreign supplier in cash through Hawala Operators residing in Karol Bagh, Trans Yamuna in Shahdara and in Ashok Vihar; he did not know the exact names of these Hawala operators; he arranged Hawala amount by selling the undervalued and mis-declared imported goods against the actual price in cash; the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emitted money through their respective bank accounts and were filing their own independent VAT and Income Tax returns; availability of all the proprietors should dispel the doubt and settle the matter at rest that they are independent importers; each unit has been held to be in existence since duty demands are confirmed only against such individual importers; just because appellant s brother supplied goods to independent importers through his company, no charge can be made against the appellant. 6. 1.ShriPrabhat Kumar also submits that Legal provisions have been ignored totally; statements (retracted later) recorded under threat have been given precedence over facts; Shri Satish Luthra retracted his statement recorded on 31.1.2005; there is no corroborative material; Commissioner did not allow Cross-Examination of CHAs, proprietors and others, which was required to prove the charges. not affording cross-examination has resulted in violation of the principles of natural justice and hence not sustainable as held by Hon ble Supreme Court in the case of Swadeshi Polytex Ltd Vs CCE, Meerut 2000 (122) ELT 641 (SC). 6.2. ShriPrabhat Kumar submits that As per definition contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00, deposited during the investigation, has been appropriated towards duty liability of M/s. Simran Exports; the Appellant is an independent importer and has nothing to do with Mr. Satish Luthra CEO of M/s. Ramakrishna Electro Components Pvt Ltd; Ld. Commissioner has erred in appropriating the amount, as there is no authority of law to do so. 8. Shri Ramesh Kumar, Learned Authorised Representative for the department, submits that Satish Luthra in connivance with his brothers Jawahar Lal Luthra, and Harish Luthra planned to import electronic goods of ST (ST Micro Electronics) of Philips and Sanyo brand undervaluing them; he adopted a modus whereby they would procure such goods in Singapore and Hong Kong from the original manufacturers; he would generate invoices, in the name of firms viz. M/s Stride Promotion Pte Ltd in Singapore and M/s Ascend International, Hong Kong, owned by Ranjan Shukla, a friend of Satish Luthra and Jawahar Lal Luthra, brother of Satish Luthra, showing lower value; in order to avoid detection by Customs department, he planned to import in the name of various firms (IECs) in the name of his employees or acquaintances who were lured to connive in the fraud f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awala operators viz. Sushil Goel and Vijay Chand Baid also admitted, in their statements on 23.3.2006 and 24.3.2006, that they had send the difference between the actual value and the declared value through Hawala channel to Jawahar Luthra in Hong Kong for Shri Satish Luthra. Satish Luthra on being confronted with these statements, Satish Luthra admitted, on 31.01.2005, 1.2.2005, 9.3.2005 and 7.3.2006 the same on 7.3.2006, that the above were true. The request for provisional release, of goods seized, was made under the signature of Satish Luthra though goods were imported in the name of these nine firms; during the course of provisional release, he even submitted a bond, supported by a BG of ₹ 50 lakhs, stating that the nine firms are under his control. Satish Luthra also made a voluntary deposit of duty to the tune of ₹ 1.5 Crores in the name of these nine firms. Satish Luthra in his statement dated 9.3.2005 and 7.3.2006 also admitted to the duty chart prepared on the basis of Price lists and contemporary imports made by him in his own firms RECL. 8.2.Learned AR submits that definition of Importer , as in Section 2(26) includes any owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of value at time of import, It is not proper to throw it out at threshold, without looking at quality of evidence; fraud, if established, unravels all; otherwise, it could be means to evade Customs duty with impunity, by declaring substantially low price in Bill of Entry, somehow getting Customs officer to load value a bit; judicial decisions only protect bona fide purchaser or assessee; they do not deal with situation where approval is obtained by fraud, or unearthing of misdeclaration or suppression of value subsequent to assessment of Bill of Entry; they do not lay down absolute law that assessment made under Section 47 of Customs Act, 1962, cannot be opened through notice issued under Section 28. Hon ble Tribunal had also distinguished the judgement of Hon ble Supreme Court in the case Mohan Meakin Ltd (supra). 8.5.Learned AR submits, on the argument that the goods imported in the name of these nine firms are not branded, that a perusal of the Annexures to the SCN and the Price list of ST Brand clearly reveals that the unique code of these brands are specifically mentioned in the bills of entry, which indicates that the goods are nothing but branded goods; code names specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 307) ELT 771 (T). 8.6. Learned AR submits that in view of Madras High Court s judgement in K V Shivaraj 2017 (346) ELT 547 , penalty can be imposed proprietors of dummy units for allowing third party to gain unauthorized access to IEC;Unique Trade Link (ShriJagvir Singh) and Oberoi Import Export (ShriNarender Singh) are not eligible for refunds as they are not importers in this case; Shri Satish paid the amounts and not them and refund was not claimed as provided in Section 27. 8.7. On departmental appeals, C/911/2010 ( Respondent M/s Radhe International), C/912/2010 (Respondent M/s Universal Electronics), C/915/2010 (Respondent M/s Unique Trade Links), C/917/2010 (Respondent M/s Oberoi Import Export),C/920/2010 (Respondent M/s Simran Exports ) , C/921/2010 (Respondent M/s Communication Trade Links), learned AR reiterates the grounds of appeal and submits that the adjudicating authority erred in dropping the portion of the demand holding that some of the goods are unbranded; regarding appeal No. C/914/2010 (RespondentShri Harish Luthra), he submits that the impugned order was incorrect as far as dropping of penalty on Shri Harish Luthra; Shri Harish Luthra is the Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish Luthra is the actual importer for the reasons that vide letter dated 11.03.2005, Sh. Satish Luthra requested for provisional release of goods seized at New Delhi Railway Station though the imports were in the name of Shiv Enterprises; the CHA and the transporters identified Sh. Luthra to be the person with whom they dealt with in respect of the impugned imports. Learned Commissioner interprets the word person in the definition of importer to mean persons relying on the fact that Section 13 of the General Clauses Act 1897stated that in all (Central Acts) and Regulations, unless there is anything repugnant in the subject or context words importing the masculine gender shall be taken to include females, and words in the singular shall include the plural. 11. We find that Learned Counsel for the appellants submits that Shri Satish Luthra never claimed himself to be the importer; status of importer can be determined only before clearance of goods and no discretion has been conferred on the customs authorities to allege that a person is the importer who has not claimed himself to be so. Learned Counsel submits that all the importer-concerns/business units are independent ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n importer and as such cannot be a person referred to in Section 28 of Customs Act 1962. Therefore, neither the demanded duty nor the imposed penalty can be held to be devolved on Shri Satish Luthra. 13. Coming to the issue of alleged under-valuation of goods, we find that the entire allegations in the show cause notice and consequently the impugned order are based on statements of different persons. Some of them have been since retracted. We find that all the impugned goods imported by or imported in the name of nine importers have been cleared for home consumption by the proper officers. The Department has sought to re-determine the value of such goods which have been already cleared for home consumption without filing appeals against the respective assessments in the Bills of Entry. We find that Learned Commissioner has been categorical in holding that there is considerable difference between price of branded goods and un-branded goods of the same specification. The investigation has not made any efforts to cross-link the seized goods to the goods imported under the Bills of Entry filed by the nine importers. He also observes that the demand is made in respect of all the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been denied to them. Under the circumstances and in view of the various case laws as cited above, we find that such an order is not maintainable and is liable to be set aside. 15. Moreover, we find that the OIO failed to give proper grounds to establish that the transaction value declared by the appellants is liable to be rejected. The OIO does not rely upon any contemporaneous imports of identical or similar goods to establish that the goods are mis-declared. In Para 60.8 of the OIO, Commissioner has rejected the contention of OIO to ascertain the price of the goods comparing them to identical goods imported by M/s RECPL; commissioner finds that the Show Cause Notice does not state the basis for considering that the goods imported by M/s RECPL are identical to the goods imported. Having deviated from the assertions in the SCN, Learned Commissioner dos not state clearly as to why the declared values are liable to be rejected. He sets forth a new ground of goods being branded and makes reference to price lists. We find that one important pitfall in this approach is that whereas the importers have imported from traders, the OIO seeks to apply the values, in respect of certain g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot normally seen in the Print out. Some importers declare the brand name in the Description itself in those cases the officers is able to see the brand name directly on the screen at the time of assessment and examination. But when this information is declared in the field for Brand name the officers can see it only if they go to a different screen by name Accessories . Since the officers did not look at this information at the time of cross-examination the answers given by them were based on mistaken notion. At any rate the question of facts whether the brand name was declared at the time of filing of BE is to be decided from the records and not from the opinion of the officers. So, I do not find the deposition of these officers to be of any consequence to my finding. However, it can be seen that the learned Commissioner has not only travelled beyond the SCN but also did not bother to supply the copies of the Bills of Entry, which he relied upon to come to the conclusion that some of the goods are branded. Therefore, we find that the impugned order is liable to be set aside. We find merit in the appellants submission that the Assessment Orders, passed by Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiate the allegation of under-valuation. No samples were drawn and no enquires were made. As discussed above, no reasons for rejection of the assessable value of the goods, more so looking in to the fact that the goods have been once cleared by Customs after due process of examination and assessment, as declared by the importers have been given. The respective Bills of Entry have not been challenged at appropriate forum. Connivance/collusion of assessing/examining officers, if any, have not been alleged/established. No enquiries relating to the existence of higher contemporaneous values have been done. Retractions have not been challenged on concrete evidence and have been brushed aside as routine and afterthought. In some cases, cross-examination has not been allowed and wherever it was allowed, the averments thereon have not been taken into consideration. Show Cause Notice has been issued much after the relevant date; SCN does not invoke proviso to Section 28(1) of the Customs Act, 1962 and the impugned order also does not discuss and substantiate such invocation. Therefore, the impugned SCN is barred by limitation also. Thus, we find that the impugned order suffers from various ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
