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TMI Blog2023 (8) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... ation can be rejected based upon the evidence which qualifies and meets the criteria of certain reasons . Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges etc., to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and certain reasons exists and justifies detailed investigation. It is found that the original adjudicating authority has rejected the declared transaction value in terms of Rule 12 of the Customs Valuation Rules, 2007 basing on the assessable value of identical goods imported vide Bill-of-Entry No. 699388 dated 25.11.2010, which was proposed to be adopted as the transaction value under Rule 4 of the Customs Valuation Rules, 2007 - The declared value of the impugned consignment, which was said to be based on the said contract, was rejected as not representing the actual transaction value contemplated in Rule 3 of the Customs Valuation Rules, 2007 and the contract was found to be extraneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted goods, considering contemporaneous import prices of similar goods of same description, the importer was asked to justify the declared value. In both the above appeals, the invoices were raised by M/s. Bedeil General Trading LLC., P.O. Box - 52018, Dubai, U.A.E. 2.3 Being aggrieved, the importer had filed Writ Petition No. 30153 of 2010 before the Hon'ble High Court at Madras for the acceptance of the contract value / declared value for the Bills-of-Entry filed. The Hon'ble High Court directed the Revenue to release the imported goods on furnishing of a Bank Guarantee for 50% of the differential duty and further, a personal bond for the remaining 50% of the differential duty. In compliance with the above directions, the imported goods were assessed provisionally and cleared on the above terms. 3. As the Department noticed contemporaneous prices of imports of Raw Silk Yarn of Uzbekistan origin at USD 28.50 (CIF) per kg. vide Bill-of-Entry No. 699388 dated 25.11.2010, Show Cause Notices consequently came to be issued to the importer proposing final assessment after enhancement of the transaction value under Section 18(2) of the Customs Act, 1962 and demanding differential duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the respondent-importer under Section 112(a) of the Customs Act, 1962. 5.2 Similarly, Order-in-Original No. 18046A/2012 dated 05.03.2012 was passed by the Additional Commissioner of Customs thereby rejecting the declared value of Rs.44,17,699/- (@ USD 13.75 per kg.) for the imported Raw Silk Yarn in hanks imported vide Bill-of-Entry No.704225 dated 30.11.2010 and re-determining the transaction value at Rs.90,66,026/- (@USD 28.50 per kg.) under Rule 4 of the Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962 and thus, ordered for re-assessment of the goods in the above terms. The imported goods were held to be liable for confiscation under Section 111(m) of the Customs Act, 1962 and a redemption fine of Rs.2,50,000/- was imposed under Section 125 of the Act. Further, a penalty of Rs.1,00,000/- was imposed on the respondent-importer under Section 112(a) of the Customs Act, 1962. 6. Being aggrieved, the importer filed appeals before the Commissioner of Customs (Appeals), Custom House, Chennai, who has allowed their appeals with consequential relief. So, the Revenue has come in appeal before this forum against the above decision of the lower appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importer had not fulfilled the conditions of the contract, the value of the goods has to be based on contemporaneous values and not as per the contract price. (v) When identical goods were imported at significantly higher prices, the price declared was USD 13.75 per kg, whereas the contemporaneous prices for these goods was noticed at USD 28.50 per kg. which needs to be taken as the assessable value in terms of Rule 4 of the Customs Valuation Rules, 2007. (vi) The invoice raised cannot be considered as a commercial invoice, but a proforma invoice. (vii) The impugned goods were imported from M/s. Bedeil General Trading LLC., Dubai whereas the goods actually originated in Uzbekistan, showing that he supplier is not the manufacturer of the imported goods. (viii) The contract is found to be extraneous to the transaction between the supplier and the importer and so, the declared value is liable to be rejected as the same does not represent the actual transaction value as contemplated in Rule 3 of the Customs Valuation Rules, 2007. 10.1 On appeals being filed by the importer, the lower appellate authority has allowed the appeals filed by the importer relying on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame price or a little higher price by other importers of identical goods were put forth by the assessee, but the Department was only relying on one odd import and that odd import was also not proved with documentary evidences that it is identical in all respects to the present imports. 11.1 During the hearing before the Tribunal, Ld. Authorized Representative Smt. K. Komathi (Additional Commissioner), representing the Revenue, has reiterated the grounds-of-appeal. She has relied on the decisions rendered in the cases of: - a. Radhey Shyam Ratanlal v. Commr. of Cus. (Adjudication), Mumbai [2009 (238) E.L.T. 14 (S.C.)]. b. National Fruits Agency v. Commissioner of Cus. (Exports), Chennai [2016 (337) E.L.T. 232 (Tri. - Chennai)], the appeal against which was admitted by the Hon'ble Supreme Court in 2018 (359) E.L.T. A207 (S.C.). 11.2 She has also placed reliance on the decision of the Hon'ble Supreme Court in the case of M/s. Punjab Processors Pvt. Ltd. v. Collector of Customs [2003 (157) E.L.T. 625 (S.C.)] wherein it was held that Customs Authorities, while assessing the value of import, are not bound by the figure mentioned in the invoice and can rely on contemporaneous eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and services like commission, brokerage, engineering, design work, cost of transportation, etc., as may be specified in the rules made in this behalf. These amounts are to be added to the declared transactional value. Accordingly, in terms of Rule 10 of the 2007 Rules, the value and price of costs and services are added to the price actually paid or payable for the imported goods for determining the transaction value. 10. Sub-section (2) of Section 14 is a non obstante provision, which applies notwithstanding sub-section (1), i.e. when the Board has issued a notification in the Official Gazette fixing tariff values for any class of imported or exported goods. The Board has been authorised to issue notifications under Section 14(2) of the Act when it is satisfied that it is necessary or expedient. Thus, whenever tariff has been fixed vide notification issued by the Board under Section 14(2) of the Act, then notwithstanding the transactional value of the imported goods under sub-section (1) to Section 14 of the Act, as per sub-section (2) to Section 14 of the Act the customs duty is payable as per the tariff value so fixed. In the present case, the Board has not considered it ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related. We would not dilate on the said sub-rule for this is not required for the purpose of the present decision. As per sub-rule (4), where the value cannot be determined under sub-rule (1) to Rule 3, the transaction is to be valued by step wise applying Rules 4 to 9. Rule 4 deals with transaction value based on identical goods. Rule 5 deals with transaction value based on similar goods. Rule 6 deals with the determination of value where the transactional value cannot be determined under Rules 3, 4 and 5. Rules 7 and 8 deal with deductive value and computed value respectively. Rule 9 prescribes the residual method for computing the transaction value. What is important to note is that Rules 4 to 9 are subject to the provisions of Rule 3 thereby giving primacy to Rule 3 which in turn gives primacy to Rule 12 of the 2007 Rules. 14. Rule 12, which as noticed above enjoys primacy and pivotal position, applies where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods. It envisages a two-step verification and examination exercise. At the first instance, the proper officer must ask and call upon the importer to furnish further inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the truth. To constitute reasonable doubt, it must be free from an overemotional response. Doubts must be actual and substantial doubts as to the guilt of the accused persons arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an imaginary, trivial or a merely possible doubt; but a fair doubt based upon reason and common sense. It must grow out of the evidence in the case." Proof beyond 'reasonable doubt' is certainly not the requirement under proviso to Section 14 of the Act and Rule 12 of the 2007 Rules, albeit the above quote draws a distinction between a simple doubt and a doubt which is reasonable. In the context of the proviso to Section 14 read with Rule 12 and clause (iii) of Explanation to the 2007 Rules, the doubt must be reasonable and based on 'certain reasons'. The proper officer must record 'certain reasons' specified in (a) to (f) or similar grounds in writing at the second stage before he proceeds to discard the declared value and decides to determine the same by proceeding sequentially in accordance with Rules 4 to 9 of the 2007 Rules. It refers to a doubt which the proper officer possesses eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arn at around the same price was submitted before the lower appellate authority, which was favourably considered by him in allowing their appeals. 17. We find that the original adjudicating authority has rejected the declared transaction value in terms of Rule 12 of the Customs Valuation Rules, 2007 basing on the assessable value of identical goods imported vide Bill-of-Entry No. 699388 dated 25.11.2010, which was proposed to be adopted as the transaction value under Rule 4 of the Customs Valuation Rules, 2007. He also observed that the goods were imported from M/s. Bedeil General Trading LLC., U.A.E. where the goods were of Uzbekistan origin and that the seller was not the manufacturer of the goods. It was also observed that though the contracted quantity was 15,00,000 kgs., the respondent viz. M/s. Kaveri Silks & Jute Pvt. Ltd., had imported only around 53,177 kgs. of Raw Silk, contravening contractual conditions. The declared value of the impugned consignment, which was said to be based on the said contract, was rejected as not representing the actual transaction value contemplated in Rule 3 of the Customs Valuation Rules, 2007 and the contract was found to be extraneous to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same odd import was also not proved with documentary evidences that it was identical in all respects to the impugned consignment. 21.1 The Ld. Departmental Representative has relied on the decisions of the Hon'ble Apex Court in the cases of M/s. Radhey Shyam Ratanlal v. Commr. of Cus. (Adjudication), Mumbai [2009 (238) E.L.T. 14 (S.C.)] and M/s. Punjab Processors Pvt. Ltd. v. Collector of Customs [2003 (157) E.L.T. 625 (S.C.)]. 21.2 In the case of M/s. Radhey Shyam Ratanlal (supra), it was recorded that the declared value could not be supported by production of original contract or invoices relating to procurement of cloves; there was no valid contract between the importer and the supplier and it was found to be merely a certificate issued by the supplier. Therein, the Revenue had relied upon contemporaneous documents like Weekly Bulletin of Spices Market and also the Public Ledger relating to prices of spices and the supplier was found to be primarily dealing with sports goods and not the cloves which were imported therein. For the above reasons, the ratio of the above decision is not applicable to the facts of the present appeals. 21.3 In the case of M/s. Punjab Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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