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TMI Blog2020 (6) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... NDUSTRIES AND OTHERS VERSUS C.C. -KANDLA [ 2019 (10) TMI 113 - 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. The issue on which the Learned Commissioner (Appeals) rejected the appeal that once the appellant have accepted the enhancement of the value at the time of reassessment of the Bill of Entry they are not falling under the category of aggrieved person in terms of Section 128 (1) of Customs Act, 1962 - Considering the fact that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rime Metal and minus discount at the rate specified in the said guideline. He submits that this tribunal in the appellant s own case has rejected such methodology of valuation and allowed the appeal of the appellant vide order No. A/11871-11874/2019 dated 01.10.2019, therefore, the issue is not under any dispute after the aforesaid order passed by this tribunal. 3. Shri G Jha, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. 4. We have heard both the sides and perused 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 statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not allowed. In our view when the goods on importation were found to be zinc ash and permitted to be cleared after testing and also that the chemical examination report of goods seized from factory is inconclusive, the goods would merit classification as Zinc Ash only. Even though there is communication from the Indian Consulate or the emails between the indentor and supplier, but in the light of the fact that the goods were found to be Zinc Ash during imports, we are inclined to hold that the charges of mis-declaration are not sustainable and hence 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical goods at the same price and we have perused the same. This has been overlooked by the adjudicating authority. We are of the view that if the declared value is to be rejected in that case the CVR, 2008 has to be applied sequentially i.e Rule 5 and 6 is to be applied. If the value of the contemporaneous goods are available, the same shall be basis for re-determining the prices. Whereas in the case of instant demands the prices of contemporaneous imports were same as that of Appellant and hence the LME Prices reduced by discount band could not have 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealistic price or misdeclaration in respect of valuation of goods or description or where transaction value of the goods declared is ridiculously low, which of course the Assessing Authority has to justify, he must proceed to determine valuation of goods by following Customs Valuation Rules. The availability of evidence of contemporaneous import of the same goods obviously provides the best guide for determination of value of the import of goods but in the absence of evidence of contemporaneous import, reference to foreign journal for finding 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 obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confronted with any contemporaneous material relied upon by the revenue for enhancing the price declared by them in the bills of entry, the Tribunal has observed thus : In the present case as mentioned above, even though there is a reference to contemporaneous import in the order passed by the Deputy commissioner no material regarding such import has been placed before us or made available by the appellant at any point of time. Therefore, assessment in this case has to be taken as having been made purely on the basis of LME Bulletin without any corroborative 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is not justified in the present case and accordingly set aside the impugned order and allow the appeal. The above Tribunal judgment stands upheld by the Apex Court as reported in Commissioner Vs. GKN Sinter Metals Limited - 2010 (254) E.L.T. A43 (S.C.)] Same analogy has been taken by the Tribunal in case of Bothra Metal Alloys 2013 (9) TMI 546. It is therefore absolutely clear that the redetermination of value based upon LME prices less discount band as per DGOV Alert Circular supra is not sustainable. 7. From 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 Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But in the absence of evidence of contemporaneous import, reference to foreign journals for finding out the correct international prices for the purpose of Section 14 of the Customs Act is not irrelevant. Since contemporaneous import prices were available in the present case as being noted but not accepted by the Commissioner in the Order-in-Original, departmental case for undervaluation become weak and appeal in Supreme Court is not merited We find from the communication dated 29.10.2008 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 met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80% of the LME. However in his statement dated 23.04.2007, he has stated that the import price of Aluminium Scrap was negotiated by applying different discount bands ranging from 5% to 35% to the LME price of various grades, viz. Trump, Tense, Taldon, Trob etc., which corresponded to the discount band provided in Alert Circular No. 14/2005 dated 16.12.2005 of the Director General of Valuation. In such a case, we are inclined to accept the submission of the Appellant that initially 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Andaman Timber Industries 2015 (324) ELT 641 (SC) , wherein the apex court held as under : 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind 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-examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces when these persons could not be produced for cross examination, their statements could not have been relied upon. Especially in case of Mihir Bhatt, Ehsan Amin Gadawala where the only evidence was their own statements stating undervaluation. In case of other persons also in the light of above facts, the adjudicating authority should have allowed the cross examination. In absence of the opportunity to cross examine the above persons, we are of the view that no reliance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at since the issue of non-payment of Additional duty was not raised at the time of assessment, hence cannot be raised in reply to show cause notice under section 28. The contention of adjudicating authority is not sustainable as when notice under section 28 is issued to an assessee, he can contest the whole assessment to say that duty is not payable for a reason not taken up at the time of original assessment. He is entitled for all reliefs/ exemption associated with the assessment. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals) rejected the appeal that once the appellant have accepted the enhancement of the value at the time of reassessment of the Bill of Entry they are not falling under the category of aggrieved person in terms of Section 128 (1) of Customs Act, 1962. We find that on this direct issue the Hon ble Supreme Court in the case of CENTURY METAL RECYCLING PVT. LTD. vs UNION OF INDIA- 2019 (367) E.L.T. 3 (S.C.). Considering the fact that the appellant had given the consent letter before the assessing authority, the enhancement of the value was rejected. 6 As per the above Apex Court judgment even though the assessee gave consent letter but if the assessing authority has not followed the principle of valuation as laid down under the act and Custom Valuation Rules, the assessment will not sustain, therefore, merely because the appellant had given a consent letter, the assessing authority cannot be absolved from not doing the process of reassessment as required under law therefore, the valuation particularly in the present case only based on DGOV Circular dated 15.11.2018 which has already been dealt with and rejected by this tribunal in the above Order dated 01.10.2019, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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