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TMI Blog2022 (10) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation Rules deals with the rejection of transaction value - the importer's assertion that the existence of such lower end versions were communicated to it by WECHAT could not be substantiated because no such WECHAT message was produced. No such lower end versions were found during the market survey nor were any such low end versions put up on the website of the company maintained by the importer itself. The Commissioner (Appeals) has erred in relying on an email obtained by the importer after the case was booked when all other evidence is to the contrary. Therefore, the Commissioner (Appeals) was not correct in setting aside the rejection of the transaction value and its re-determination under Rules 4 5 by the original authority. In this case, the goods which were indicated in the Bill of Entry were 'unpopular brands' while what were imported were Zhiyun brand goods. The prices which were declared in the Bill of Entry were a fraction of the price of the Zhiyun brand goods imported by the same importer from the same overseas supplier and they were of the same models - the imported goods were correctly confiscated under section 111 and consequently, penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 16,22,228/- under Section 28(1) of the Customs Act, 1962 [Act] and confiscated the imported goods confiscated under Section 111(l) and 111(m). He gave an option to the respondent to redeem the goods on payment of fine of Rs. 9,93,000/-. He also imposed penalties of Rs. 2,00,000/- under Section 112(a) and Rs. 3,31,000/- under Section 114AA on the Respondent. 5. The respondent assailed the order in original before the Commissioner (Appeals) who, by the impugned order, set aside the OIO and allowed the appeal. The impugned order was reviewed by a Committee of Commissioners under Section 129A (2) of the Act which directed the Assistant Commissioner of Customs (Review) to file an appeal before this Tribunal seeking the impugned order to be set aside and the OIO to be restored. Accordingly, Revenue filed this appeal. 6. On behalf of the Revenue, the submissions have been made. a) The impugned goods were admittedly of 'Zhiyun' brand only. Goods of the same brand were imported earlier but in this Bill of Entry they have been declared them as of 'unpopular brand' instead of 'Zhiyun brand'. Investigation revealed that there was no product of Zhiyun known a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances of the case clearly indicate collusion between the Respondent Importer and the supplier of goods. Production of the offer letter long after the seizure made by the Customs and the claim of Wechat message supposedly received on 17-18 January 2018 (which was never produced) do establish that the importer was hand in glove with supplier to justify the evident undervaluation. h) Facts of drastic fall in the value of goods as compared with the similar/identical goods imported earlier coupled with sale of most of the goods by the importer to the firm M/s. AVCS in which the importer (Shri Mayank Chachra) is a director holding 33% share is clear indicator of deliberate undervaluation of goods in collusion with supplier by inserting terms like 'low version/unpopular brand/promotional goods' in the description of the impugned goods. i) Rejection of transaction value under Rule 12, re-determination of assessable value under Rule 4 and 5, duty demand under Section 28(1) of the Customs Act 1962, confiscation of goods under Section 111(m) and imposition of penalty under Section 112 and 114AA were correct in law in view of mis-declaration of actual descrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of penalty under Section 114AA of the Act is not sustainable. f) Demand in the case is made under Section 28(1) which does not involve collusion, mis-statement or suppression of facts. Penalty on the Respondent is, therefore, not sustainable. g) The grounds of appeal are not valid. h) Reliance was placed on the following precedent decisions: (i) Suketu Jhaveri vs Commissioner of Customs (Import), Nhava Sheva 2014 (314) ELT 828 (Tri-Mumbai) (ii) Max Speciality Films Ltd. vs Commissioner of Customs, Ludhiana - 2017 (357) ELT 342 (Tri-Del) (iii) CC (Import) Mumbai vs Tiong Woon Project Contracting (I) P Ltd. - 2017 (356) ELT 138 (Tri-Mumbai) (iv) Unimark Remedies Ltd. vs Commissioner of Customs (Export Promotion), Mumbai - 2017 (355) ELT 193 (Bom) 8. We have considered the submissions on both sides and perused the records. The questions to be answered in this appeal are: (i) Is the review of the impugned order by the Committee of Commissioners under section 129A (2) time-barred as asserted by the respondent? (ii) Was the Commissioner (Appeals) correct in setting aside the rejection of the declared transaction value under Rule 12 and re-determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: Provided further that] the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in clause (b) or clause (c) or clause (d) where- (i) the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under section 125; or (ii) in any disputed case, other than a case where the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved; or (iii) the amount of fine or penalty determined by such order, does not exceed two lakh rupees. **** (2) The Committee of Commissioners of Customs may, if it is of the opinion that an order passed by the Appellate Principal Commissioner of Customs or Commissioner of Customs under section 128, as it stood immediately before the appointed day, or by the Commissioner (Appeals)] under section 128A, is not legal or proper, direct the proper officer to appeal on its behalf to the Appellate Tribunal against such order: Provided that where the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter considering the facts of the decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs, if is of the opinion that the decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs is not legal or proper, may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order. (2) The Principal Commissioner of Customs or Commissioner of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any officer of Customs subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Principal Commissioner of Customs or Commissioner of Customs in his order. (3) Every order under sub-section (1) or sub-section (2), as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed in this section. However, sub-section (3) of section 129A prescribes a time limit of 3 months from the date of communication of the impugned order for filing an appeal by either side. It may happen that the appeal is filed late with an application for condonation of delay and if the application is allowed, the appeal is admitted and decided on merits. Learned counsel's submission that the review order under section 129A(2) is time-barred is misplaced because this sub-section lays down no time limit at all and we cannot read into it any time limit. The related question is whether this appeal itself is time-barred because section 129(3) lays down a time limit of 3 months from the date of receipt of the order to file an appeal. The impugned order dated 17 December 2020 was received by the Principal Commissioner on 3 August 2021 and the review order was passed by the Committee on 2 November 2021 which was received by the Deputy Commissioner (Review) on 11 November 2021 and he filed this appeal on 17 November 2021. The entire period is covered by the various suo moto orders of the Supreme Court passed in view of the COVID pandemic. Therefore, this appeal should be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of any class of imported goods and the checks to be exercised, including the circumstances and manner of exercising thereof, as the Board may specify, where, the Board has reason to believe that the value of such goods may not be declared truthfully or accurately, having regard to the trend of declared value of such goods or any other relevant criteria. Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. ****' 14. As may be seen, Section 14 requires the valuation to be done as per the transaction value subject to some conditions. Clause (iii) of the second proviso to this Section provides for rejection of transaction value by the proper officer under certain circumstances. If the transaction value is rejected, then the value shall be re-determined as per the Valuation Rules. Rule 12 of the Valuation Rules deals with the rejection of transaction value. It reads as follows: Rule 12. Rejection of declared value. (1) When the proper officer has reason to dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt the truth and accuracy of the transaction value, he can call for further information and if no such information is provided or after considering the information so provided, the proper officer still has a reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the valuation cannot be done as per the transaction value. The grounds on which the proper officer can doubt the transaction value has been given by way of illustration in clause (iii) to the Explanation. One of the grounds is significant 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. 16. In this case, the officers acted on the basis of intelligence and opened and examined the goods 100%. What was declared in the Bill of Entry was 'Unpopular brand' and the goods which were actually found were of Zhiyun brand and goods of this brand were imported by the respondent itself previously describing the goods as Zhiyun brand. The prices declared in this Bill of Entry were much lower than the prices at which they were imported by the respondent when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, we find that the contention that the imported goods were lower versions of the same models of Zhiyun brand is not supported either by the imported documents or by the declaration in the Bill of Entry nor was the existence of such lower versions indicated on the website of Zhiyun in India maintained by the importer itself and no such lower versions were also found in the market survey. The assertion of the importer that such lower versions exist and that it had received information about them in January 2018 on WECHAT message is not substantiated as no such message was produced by the importer. The only evidence in support of this contention of the importer was an email received by the importer after the case was booked by the Customs which, in our considered view, is not sufficient to establish the theory of the existence of lower versions of the model and their import. If there were such lower versions which were imported, we find no good reason for the importer to have not declared them in the Bill of Entry or any of the documents. What was declared in the Bill of Entry was 'unpopular brand' and what was imported was Zhiyun brand. It is unthinkable that the owner of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit Price USD 385 (CIF) USD 50 (FOB) USD 55 (FOB) B. Comparative chart for item Zhiyun Crane Zhiyun Crane Plus 3-axis camera stabilizers: Parameters BoE No. 3985161 dated 13.11.2017 BoE No. 5233199 dated 16.02.2018 Description of Goods Camera Stand (Zhiyun Crane, Type Monopod) Camera Stand (3 Axis Stablizer-CRA01, Unpopular Brand) Key features Customized and suitable for almost all mirrorless cameras, Core techniques of the fifth Zhiyun honeycomb low level control arithme, tiny butamazing, Compatible with 18650 and 26650 batteries, 3 axes 360 degrees unlimited rotation, Firmware upgrade via APP Zhiyun s mature attitude algonthm, HF measuring range from idle load to full load, Multiple professional servo motors, Built-in IMU and incredibly precise and powerful brushless motor. Point of View (POV) Mode, Intelligent object tracking, motion memory, night lapse, Tilt Angle 360o, Pan Angle 360o Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Rotational angle Better in normal version 9. Movement speed Better in normal version 10. Modes Low version PF/L/F Normal Version-PF/L/F/POV/S 11. Motor Poles Low version 36 Normal version 42 12. Display PCB Low version OLED 32 Bit Normal Version OLED 64 Bit 13. Camera Charging Not available in low version 14. Joystick Control PCB Board Low version-Un programmed V 1.6 Normal version programmed with EF lens support v 1.72 Parameters BoE No. 3985161 dated 13.11.2017 BoE No. 5233199 dated 16.02.2018 Description of goods Dual Handle for Camera 'Dual Stand (for Zhiyun Crane) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,-- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten percent of the duty sought to be evaded or five thousand rupees, whichever is higher: Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be t ..... 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