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TMI Blog2020 (12) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... n them under section 124 of the Customs Act and, therefore, they did not want any show cause notice to be issued to them or personal hearing to be provided to them. The importers also specifically stated that they did not want a speaking order to be passed on the Bills of Entry. It needs to be noted that section 124 of the Customs Act provides for issuance of a show cause notice and personal hearing, and section 17(5) of the Customs Act requires a speaking order to be passed on the Bills of Entry, except in a case where the importer/exporter confirms the acceptance in writing. It is non-consideration of the factual position emerging from the statements made by Hanuman Prasad and Niraj Silk that led the Commissioner (Appeals) to believe that the declared value could be rejected only on the basis of reasonable and cogent evidence, which burden the Revenue failed to discharge as it could not prove that the invoice did not represent the true transaction value in the international market. The very fact that the importers had agreed for enhancement of the declared value in the letters submitted by them to the assessing authority, itself implies that the importers had not accepted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent weights and colours [the goods] and had submitted 27 and 9 Bills of Entry respectively, declaring the value of the goods @ 1.2 USD per kg. The Assessing Officer enhanced the assessable value, on the basis of contemporaneous imports data and which value was also accepted by Hanuman Prasad and Niraj Silk in writing, to 1.80 USD per kg for Hanuman Prasad and 1.94 USD per kg Niraj Silk. However, appeals were filed against each of the Bills of Entry by Hanuman Prasad and Niraj Silk before the Commissioner of Customs (Appeals) [the Commissioner (Appeals)], who by an order dated April 26, 2019 allowed all the 27 appeals filed by Hanuman Prasad and by an order dated May 08, 2019 allowed all the 9 appeals filed by Niraj Silk. The Department has, accordingly, filed these 36 appeals to assail the orders passed by the Commissioner (Appeals). 2. The records indicate that Hanuman Prasad had submitted 27 Bills of Entry declaring the value of the goods at 1.2 USD per kg and Niraj Silk had submitted 9 Bills of Entry declaring the value of the goods at 1.2 USD per kg. The Assessing Officer believed that he had reason to doubt the accuracy of the value so declared, since it was lesser than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been shown Contemperous data we agree for enhancement of Value @ 1.94 USD Per Kg. In this regard, we submit that we do not want any Show-cause Notice Personal Hearing on this matter as envisaged under section 124 of Customs Act, 1962 read with Section 28 of this Act. We do not want any Speaking Order of Aforesaid B/E s. We, therefore, voluntarily relinguish our Rights provided u/s 124 17(5) of Customs Act, 1962. Thanking you. Your s Faithfully, For NIRAJ SILK MILLS Sd/- (Proprietor) 5. The value of the declared goods was thereafter enhanced by the Assessing Officer to 1.80 USD per kg. in the case of Hanuman Prasad and to 1.94 USD per kg. in the case of Niraj Silk. 6. However, Hanuman Prasad and Niraj Silk challenged the order passed by the Assessing Officer on the Bills of Entry by filing 36 appeals before the Commissioner (Appeals). 7. The Commissioner (Appeals), by two separate orders dated April 26, 2019 and May 08, 2019, allowed the 36 appeals. The relevant portion of the order dated April 26, 2019 relating to the 27 Bills of Entry in the matter of Hanuman Prasad is reproduced below : 5.3 The appellant has contended that the acceptance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... level of import, time etc. are to be looked into while applying the value of contemporaneous imports. Uniform value loading in each Bill of Entry at uniform price on the basis of DRI Alerts, DGoV Circulars and other Standing orders, etc., is not in consonance with the provision of the Customs Act Rules. 5.7 xxxxxxxxx xxxxxxxxx xxxxxxxxx 5.8 It is settled law by the following decisions of the Hon ble Supreme Court that unless there is additional consideration involved or any of the exceptions of Rule 4(2) is attracted, transaction value cannot be rejected : Xxxxxx xxxxxx xxxxxx 5.9 If the circumstances mentioned in proviso to Rule 4(2) are not applicable, the Department is bound to assess the duty of transaction value. NIDB data alone cannot be made basis of enhancement of value. 5.10 In the case of M/s Maruti Fabric Impex Ors., where the enhancement of value was resorted to by the Department and was rejected by Commissioner of Customs (Appeals), Delhi and the matter travelled to the Hon ble CESTAT by Department s Appeal, the Hon ble CESTAT vide Final Order No. C/A/51690-51694/2016-CU(DB) dated 27.04.2016 held that for rejecting the transaction value, first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon by the Commissioner (Appeals) are clearly distinguishable on facts, as in the present case, letters were submitted voluntarily by the importers accepting the enhanced value based on contemporaneous data; (iii) The findings of the Commissioner (Appeals) that the importers had accepted the value to avoid demurrages and detention is not borne out from the records; (iv) The Commissioner (Appeals) was not justified in making a general statement about uniform enhancement of value by the Assessing Officer on the basis of NIDB data; (v) The finding of the Commissioner (Appeals) that the valuation of the declared goods has to be first rejected under rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [ the Valuation Rules ], is not correct in the facts and circumstances of the present case; (vi) The Commissioner (Appeals) committed an error in observing that the Assessing Officer should have passed a speaking order , in view of the specific statements made by the importers that they did not want a speaking order; and (vii) The Commissioner (Appeals) was not justified in holding that the transaction value declared by the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation of Goods and is reproduced below: Section 14. Valuation of goods . - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf: Provided xxxxxx xxxxxx xxxxxx 13. It would be seen that section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. The Valuation Rules have been framed in exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. 14. Rule 12 provides that when the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of rule 3(1). Explanation (iii) to rule 12 provides that the proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons, which may include any of the six reasons contained therein, one of which is that there is a significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed. 15. The proper off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. 17. It would be seen that though in a case where re-assessment has to be done under sub-section (4) of section 17 of the Customs Act, the proper officer is required to pass a speaking order on the re-assessment, but if the importer or exporter confirms his acceptance of the re-assessment, a speaking order is not required to be passed. 18. In view of the specific requests made in the letters that were submitted by Hanuman Prasad and Niraj Silk in regard to all the 36 Bills of Entry that they had agreed for the declared value of the goods to be enhanced to 1.80 USD per kg and 1.94 USD per kg, the assessing officer assessed the value of the goods at 1.80 USD per kg for Hanuman Prasad and 1.94 USD per kg for Niraj Silk. 19. It is after the payment of duty on the aforesaid assessments made by the assessing officer that Hanuman Prasad and Niraj Silk filed 36 Appeals before the Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso to be kept in mind is that section 17(5) permits the importer to waive this right. 22. It is seen from a perusal of section 17(4) of the Customs Act that the proper officer can re-assess the duty leviable, if it is found on verification, examination or testing of the goods or otherwise that the self-assessment was not done correctly. Sub-section (5) of section 17 provides that where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer, the proper officer shall pass a speaking order on the re-assessment, except in a case where the importer confirms his acceptance of the said re-assessment in writing. 23. In the present case, as noticed above, the proper officer doubted the truth or accuracy of the value declared by the importer for the reason that contemporaneous data had a significantly higher value. It was open to the importers to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared by them and seek a reasonable opportunity of being heard, but they did not do so. On the other hand, the importers submitted in writing that though they had declared the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of rule 12 of the Valuation Rules and the observations are as follows : 15 . The requirements of Rule 12, therefore, can be summarised as under : (a) The proper officer should have reasonable doubt as to the transactional value on account of truth or accuracy of the value declared in relation to the imported goods. (b) Proper officer must ask the importer of such goods further information which may include documents or evidence. (c) On receiving such information or in the absence of response from the importer, the proper officer has to apply his mind and decide whether or not reasonable doubt as to the truth or accuracy of the value so declared persists. (d) When the proper officer does not have reasonable doubt, the goods are cleared on the declared value. (e) When the doubt persists, sub-rule (1) to Rule 3 is not applicable and transaction value is determined in terms of Rules 4 to 9 of the 2007 Rules. (f) The proper officer can raise doubts as to the truth or accuracy of the declared value on certain reasons which could include the grounds specified in clauses (a) to (f) in clause (iii) of the Explanation. (g) The proper officer, on a reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below: (3) xxxxxxxx xxxxxxxxx xxxxxxxxx (4) If the value cannot be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . By consenting to enhancement of value and thereby voluntarily foregoing the need for a Show Cause Notice, the appellant made it unnecessary for Revenue to establish the valuation any further as the consented value in effect becomes the declared transaction value requiring no further investigation or justification. To allow the appellant to contest the consented value now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no Show Cause Notice, could/would have invited allegation of harassment and delay in clearance of goods. When Show Cause Notice is expressly foregone and the valuation is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per his consent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Advocate also cites the decision of the Tribunal in the case of M/s. Vikas Spinners v. C.C., Lucknow - 2001 (128) E.L.T. 143 (Tri.-Del.) in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is estopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had lodged any protest and on the contrary their letter dated 21-4-1999 clearly points to acceptance of the enhanced value by them, the cited decision advances the cause of the department rather than that of the Appellants contrary to the claim by the learned Counsel. [emphasis supplied] 34. In BNK Intrade (P) Ltd. vs Commissioner of Customs, Chennai [ 2002 (140) ELT 158 (Tri.-Del) ], the Tribunal observed as follows : 2 .. It is also to be noted that the importer had also agreed for enhancement of the price based on contemporan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue s assessment but the same seems to have been done on the basis of a DRI Alert dated 9-5-2011. xxxxx xxxxx xxxxx 6 . As regards the second issue, we find that Commissioner (Appeals) has gone into detailed examination of the provisions of Section 14 as also the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. As rightly observed by him, for adopting the provision of Customs Valuation Rule, the transaction value is required to be rejected as incorrect value. There being no evidence to show that the importer has paid over and above than the transaction value, to the seller of the goods, there is virtually no reasons to reject the transaction value . It is also a settled law that DRI Alerts cannot be adopted as a reason for enhancing the value. As such, we find no infirmity in the views adopted by Commissioner (Appeals) so as to interfere in the impugned order. Accordingly, the appeals filed by the Revenue are rejected. [ emphasis supplied ] 38. The Tribunal noticed that with regard to the enhancement of the assessable value, the Appellate Authority had observed that no reasons had been recorded by the assessing officer for such enhancement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve demurrage charges nor did they state in the letter that the value was being accepted by them under protest and they would agitate the matter in appeal. It is only in this appeal that it has been suggested that the value was accepted to save demurrage charges, perhaps prompted by the observations made by the Tribunal in Artex Textile Private Limited. 43. Learned Counsel for the Respondent also relied upon the decision of the Tribunal in Commissioner of Customs, New Delhi (ICD TKD) vs M/s Uniexcel Polychem Pvt. Ltd [2016 (8) TMI 829- Cestat New Delhi]. The Tribunal observed that : 4 . On the merit of enhancement of value, we are in agreement with the findings in the impugned order. No detailed reason has been given by the Original Authority for rejection of the transaction value. Apparently he was guided only by DRI alert which formed basis of enhancement of value. It has been repeatedly held by this Tribunal as well as Hon'ble High Courts that the transaction value cannot be rejected mechanically based on suspicion or general alert without supporting evidence to the effect that the invoice value does not reflect the transaction value required for assessment. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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