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TMI Blog2020 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 - CESTAT AHMEDABAD] - In the said case also the value was enhanced on the basis of same DGOV guideline and the tribunal has categorically rejected such methodology of the valuation and allowed the appeals filed by the appellant by passing detailed order. Thus, the issue of method of enhancement of the valuation is as per the DGOV Circular which has been rejected by this tribunal. The present case is not different from the case on which the above order was passed. The only difference is the period. These imports were made subsequent to the imports made in earlier order dated 01.10.2019 therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind. Appeal allowed - decided in favor of appellant. - Customs Appeal No. 12505 of 2019 to 12555 of 2019 - A/11030-11080/2020 - Dated:- 1-6-2020 - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) AND HON BLE MR. RAJU, MEMBER (TECHNICAL) Shri. Harikrishan Hirani, Consultant for the Appellant Sh. G Jha, Authorised Representative for the Respondent ORDER RAMESH NAIR The brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the records. We find that the Assessing Authority reassessed the Bill of Entries by enhancing the value not on the basis of any material evidence which show that the appellant have misdeclared the value even no Contemporaneous Import Data was relied upon. The sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018. Therefore, the Adjudicating Authority has not followed the principle laid down under the Custom Valuation Rules and without application of mind straightway enhanced the value only on the basis of DGOV guildeline. We make it clear that DGOV guideline is not above the statute, the adjudicating authority has not followed the Customs Valuation Rules whereby, he was supposed to first reject the declared value and subsequently he was supposed to apply rules sequentially and only thereafter, the value can be enhanced that too on the basis of evidence. 4.1 In the present case, no such exercise was carried out, Obviously for the reason that the enhancement of value on the basis of the DGOV guideline. In Absolutely identical case of the appellant themselves this tribunal has allowed the appeal vide Final Order No. A/11871-11874 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence no duty demand can be made. There is no evidence found at the end of the Appellant and the documents relied upon to support the allegation were of third party. Hence in such circumstances , we are of the view that the charges of misdeclaration and undervaluation does not sustain. 4.1 Further coming to the demands made in above Annexure II, Annexure A-III on Zinc Ash and in Annexure A-IV on Zinc Dross, we find that the demand has been made in respect of Zinc Ash by determining the value on the basis of 35% of the LME prices and in case of Zinc Dross 75% of the LME. The Appellant has contended that since the assessment were provisional, hence the demand under section 28 cannot be made. We find that though the Ld. Adjudicating authority in Para 291 of the impugned order has accepted the ratio that in case of provisional assessment demand under section 28 cannot be made, but proceeded to confirm demand on the ground that Appellants have not specifically mentioned as to which Bills of Entry are provisional and there is no evidence in the form of execution of Bond. We find the aforesaid findings to be erroneous and contrary to facts. The Appellant had clearly stated in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been basis for re-determining the prices and rejecting the declared value. The Appellant has pointed out that identical goods were imported in case of Pushpak Metal Corporation 2014 (312) ELT 381 which were imported during the same period and comparable with Appellant s import price. The said prices were upheld by the Tribunal and it was held that value cannot be determined on the basis of LME prices. Also that the said decision was accepted by the CBEC. The Appellant has annexed comparison sheet showing the prices in their case and in case of Baheti Metal which was reported as Puspak metal case supra. We find that when the prices in case of Pushpak metal case supra has been accepted by the revenue and the same are contemporary prices to the Appellant s import, in that case the value redetermined vide the impugned order by taking LME Prices as basis is not sustainable. Hence we do not find any reason to uphold the demand confirmed against Appellant as above. 6. In case of demands made under Annexure- C on Aluminium Scrap, it is observed that several imports were made through Nhava Sheva Port and the assessments were provisional. The Order No. 2958/09 AM (I) was passed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out correct international price of imported goods may not be irrelevant. 5.5 In the instant case, the proposition in the show cause notice is that the value of the contemporaneous imports indicated a higher price. If that be so, that should have been the starting point for determination of value of the imported goods and not some other basis. Further even when we take the values of the contemporaneous imports, the lowest of such value has to be adopted as provided for in Rule 6 and not the highest. In the instant case no such thing has been done by the assessing officer. 5.6 In view of the above, we do not find any infirmity in the observation of the Commissioner (Appeals) that the DGOV Circular cannot override the provisions of Valuation Rules. The Hon ble Apex Court in the case of Commissioner of Customs, Calcutta v. South India Television - 2007 (214) E.L.T. 3 (S.C.) had held that casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value. The invoice price is not sacrosanct but before rejecting the invoice price, the department has to give cogent reasons for such rejection. The assessing authority has to examine each an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roborative evidence of imports at or near that price which is not permissible under law. We, therefore, set aside the impugned order and allowed the appeal. 5. Not being satisfied with the said order, the revenue is before us in this appeal. 6. We have heard Mr. Biswajit Bhattacharya, learned Additional Solicitor General on behalf of the revenue. The assessee remains unrepresented. 7. Learned counsel submits that since the LME bulletin is a true indicator of current international prices of metals, the adjudicating authority was justified in adopting the price of the said two metals as notified by the LME, and therefore, the Tribunal was not justified in quashing the additional customs duty determined to be payable on the imports in question. 8. We are unable to persuade ourselves to agree with the learned counsel. It is manifest from the afore-extracted order of the Tribunal that no details of any contemporaneous imports or any other material indicating the price notified by the LME had either been referred to by the adjudicating Officer in the adjudication order or such material was placed before the Tribunal at the time of hearing of the appeal. Learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above judgments it is absolutely clear that applying the LME price minus discount band as per SMRI bulletin or DGIV Circular No. 14/2005 dt. 16.12.2005 is absolutely wrong. The Appellant has also relied upon the letter F. No. S/26 Misc-1040/2005 GrIV dt. 13.02.2006 of the Commissioner of Customs, Nhava Sheva wherein the Commissioner in reference to Valuation of Aluminium Scrap under Alert Circular No. 14/2005 issued under F. No. VAL/TECH/37/2005 dt. 16.12.2005 has stated that there is no linear correlation between the prices of Aluminium Metal and prices of Aluminium Scrap quoted in Metal Bulletin. The main excerpts of the above communication of the Commissioner Nhava Sheva clearly mentions as under : 2. A. B. . the enquiries with the trade reveal that in case the difference between the prime metal and scrap is indeed so small, it does not make economic sense to go in for purchase of scrap. Inquiries from the trade have revealed that the Aluminium Scrap is used for melting purpose and re-melted Aluminium Ingots produced out of it has a sale price of 8 to 10% lower than the virgin metal. This also includes manufacturing cost and the recovery of the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 of the Institute of Scrap Re-cycling Industries, INC (ISRI), wherein they have stated as under : We have been asked to explain how aluminum scrap prices are determined. Please be advised that ISRI, as a trade association, does not become involved in scrap pricing. However, our understanding of the market is that scrap prices are determined through negotiations between buyers and sellers, based upon then current market information derived from a variety of sources, including trade press such as the American Metal Market and the Metal Bulletin, as well as future markets. These information sources are utilized as a general market trend basis for negotiation. It should be noted that scrap metal is not traded directly on the futures exchanges rather it is alloy ingots derived from scrap material that are traded on some of the exchanges such as the London Metal Exchange (LME). 8. In view of above communication of ISRI it is absolutely clear that the scrap price would depend on many factors and the LME based price cannot be applied blindly to imports of scrap for the purpose of valuation. 9. Most pertinently we find that the whole case is also based upon allegatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the investigating officers were attempting to apply 80% of the LME, but later on realizing that even the Director General of Valuation was not recommending valuation of 80% of the LME, the statement of Shri Sushil Agarwal was recorded to match the discount band, as per DGOV Circular. In such view of the facts, we do not find any reason to rely upon the statement of Shri Agarwal to support the allegation of under-valuation on the part of the Appellant. The Appellant has pleaded that it is incomprehensible that Shri Sushil Agarwal, who was in business of imports of Aluminium Scraps and Zinc Scrap since last many years would state that the prices of Scrap would be equal to the prices of metal content. It is a known fact that re-cycling of scrap would not result into recovery of entire metal content as there would be a process loss, cost to be incurred for conversion of scrap to metal. Such metal produced from Scrap cannot command same price as that of virgin metal. We find that the Appellant had sought cross examination of Shri Sushil Agarwal under Rule 138B of the Customs Act. The allegation of undervaluation are based upon the letters of Indian Consulates and statements of indento ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce can be placed upon their statements. Our views are supported by the judgment of Hon ble High Court of Gujarat in case of CC Vs. Motabhai Iron Steel Industries 2015 (316) ELT 374 (GUJ) wherein the Hon ble High Court has held that no reliance can be placed on the statement of such witness who has not subjected himself to cross-examination by the affected party . Similarly we are of the view that no reliance can be placed on the alleged recovery of email from indentor Shri Tarun Jhingon as no opportunity of cross examination of panch witness and officers was given to Appellant. We further find that during the visit to the factory of M/s SMRI, the officers had questioned the employee of M/s SMRI namely Shri Rajesh Kumar Trivedi, C. Haridas and Nikhil Jain on the basis of documents called Abstract of LME Price of Aluminium Scrap and Zinc Scrap to which said employees had stated that the Appellant s declared price was less. This document was handed over to the Appellant on 20.02.2018 and it contained Pages 1 to 8 lowest Highest Zinc prices of a day and the next 10 pages tiled MP Prices Archive containing low price of the day alongwith 80% of said price. However we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issues is well settled by the Tribunal s order in case of Decora Ceramics P. Ltd. 1998 (100) ELT 297, Lili Foam Indus. P. Ltd. 1990 (46) ELT 462, Bakeman Home Products P. Ltd. 1997 (95) ELT 278. 13. Further, we also find that in respect of 550 Bills of entries covered under Annexure C, value was already enhanced at the time of assessment and hence further proposal to re-enhance the value when the earlier assessment order has attained finality since no appeal/review was filed against such order, is not sustainable. There cannot be any reassessment of the said values, which had become final for want of appeal against the same. Our views are supported by judgments in case CC vs Lord Shiva Overseas 2005 (181) ELT 213, Malhotra Impex vs CC - 2006 (203) ELT 561 and CC vs Paras Electronics - 2009 (246) ELT 231. 14. In respect of export declaration in respect of one consignment shipped from New Zealand and 11 consignments shipped from Spain, we are in agreement with the submission of the Appellant that such declarations have no relevance as the same were not authenticated by the News Zealand Customs and Spanish Customs. Even otherwise also most of these declarations are ..... 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