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TMI Blog2024 (6) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... details of the transaction inextenso. Further, he has given the details, which were exclusively in his knowledge, that in the last four years, they have imported goods and filed around hundred bills of entry mainly relating to polyester filament for manufacturing paint brushes and gave the details of the overseas supplier. He also disclosed that he used to send email to them and after getting confirmation on pricing, it was finalised. All the statements have been duly signed and pursuant thereto, the appellant has deposited the differential duty amount with interest and penalty voluntarily. There is no mention in the challans that duty deposited is under protest . Infact in the subsequent statement dated 16.04.2018, he reiterated that whatever he has admitted in his earlier statement is correct. Shri T.N. Malhotra had given the statements voluntarily and he has deposited the duty freely and not under protest . None of the statements have been retracted by Shri T. N. Malhotra at any stage and the submission that he was not allowed to retract his statements is unsustainable, for the simple reason that when Shri Malhotra had requested for another date in terms of summons dated 27.02.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby parallel invoices were traced showing much higher value of imports and which has been admitted by Shri T. N. Malhotra, the master mind of this fraud. It is a clear case of suppressing the actual transaction value of the goods and wilfull undervaluation of the imported goods - on account of mis-declaration, suppression of true value of the imported goods with intent to evade payment of requisite customs duty, the extended period of limitation is applicable and the same would apply in the case of short payment of IGST. Confiscation - HELD THAT:- According to the appellant, the goods have been correctly declared, finally assessed by the Department and cleared on payment of appropriate customs duty and therefore, the Department could not have re-assessed the goods alleging mis-declaration. Having concluded that the goods have been imported by declaring incorrect value, which have been admitted by the appellant, no further evidence was required and hence the same are liable for confiscation under Section 111 (m) of the Act. Penalty u/s 112, 114A 114AA of CA - HELD THAT:- Penalty has been imposed on the appellant company and Shri T.N. Malhotra under Section 114A of the Act for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in suppression of actual transaction value of the goods imported by them and were evading customs duty, etc., an alert was issued to the appellant. The consignment under container no.KMTU7359650 vide Bill of Entry No.4157406 dated 27.11.2017 was put for 100% examination on 07.12.2017 and so far as the quantity was concerned, the goods were found to be as per declaration made in the Bill of Entry [B/E]. The importer had classified the goods under CTH 54049090 to avail the benefit of customs notification no.50/2017, which provided for concessional rate of duty of 5% applicable for the goods under CTH 5404 subject to the condition that the goods were made of other than those of nylon. To ascertain the description of the imported goods, samples thereof were sent to CRCL for testing and as per the test report, the goods were found to be of polyester and not made of nylon. 3. The consignments under B/E No.4860886 dated 18.1.2018 for container no.ECMU1850198 and B/E No.4995006 dated 29.1.2018 for container no.APZU3905497 were kept on hold for examination. During examination on 07.02.2018, container no.APZU3905497 pertaining to B/E No.4995006 dated 29.01.2018, 12 cartons of imported good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value differences found during investigation of the email and we-chat communications. Accordingly, show cause notice dated 23.12.2020 was issued invoking the extended period of limitation. On adjudication, the impugned order was passed confirming the demand as raised in the show cause notice. 8. Being aggrieved, both the appellants have filed separate appeals before this Tribunal. 9. The learned counsel for the appellant has made the following submissions:- 9.1 He raised objections as to the reliance placed on his statements recorded under Section 108 of the Act on the ground that the same have been recorded under coercion and threat of arrest which is evident from the fact that the entire activities were conducted on 7.02.2018 itself when his statement was also recorded. He also submitted that the statements have been considered in parts which are favourable to the Department and have not been read as a whole in entirety. The learned counsel for the appellant tried to clarify the difference in value which was basically turnover discount offered by the foreign supplier and such discounts have been offered in respect of only four consignments. 9.2 On the issue of undervaluation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it was not difficult to arrive at the sale price of the goods and then arrive at the CIF value, making the permissible deductions. Learned Counsel next contended that the loading of value of a large number of consignments on the basis of average loading factor is contrary to the provisions of CVR. Similarly, loading of all import products on the basis of evidence with regard to a few products is improper and illegal. 9.6 The learned Counsel for the appellant also challenged the admissibility of the retrieved email print-outs in the absence of fulfillment of the condition of furnishing the certificate by the investigating officers as required by Section 138C(2) and (4) of the Act. 9.7 Since the goods have been assessed and examined by the Department and cleared on payment of appropriate duty of customs, they could not reassess the goods at the later stage or invoke confiscation of the goods. 9.8 Lastly, he submitted that the appellant is not liable to penalty under Sections 112, 114A or 114 AA of the Act. In support of his submissions, the learned counsel for the appellant has relied on several decisions, which we shall discuss later. 10. The learned Authorised Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the extended period of limitation is clearly applicable in the given circumstances as the appellant had intentionally suppressed the actual invoices providing the true transaction value and wilfully presented fraudulent and incorrect invoice to the customs with sole intention to avoid payment of appropriate customs duty. The appellant have violated the provisions of Section 17 and Section 46 of the Act in not filing the truthful declaration in the bills of entry and proper self assessment, the extended period of five years has been rightly booked under the provisions of Section 28(4) of the Act and hence, the appellant is also liable to pay the differential customs duty and penalty under Section 114A and 114AA of the Act. The goods are therefore, liable for confiscation under Section 111(m) and penalty under Section 112 has been rightly imposed. 10.5 The learned Authorised Representative in response to the objection to non-compliance of the conditions enumerated in Section 138C of the Act relied on the decisions of Gujarat High Court in Principal Commissioner of Customs Versus Kishan Manjibhai Gadesriya [2022(4)TMI 316 (Gujarat High Court)] , which referred to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich constitute the offence. An admission of a gravely incriminating fact, even of a conclusively incriminating fact cannot by itself be regarded as confession and a statement that contains self exculpatory matter cannot amount to a confession because if exculpatory statement is of some fact which if true then it would negative the offence alleged to be confessed. Accordingly if a statement recorded under Section 24 of the Evidence Act have portions of admission, which are corroborated by independent witnesses and other material then it may constitute basis for recording a firm finding with regard to penalty. Therefore, we do not find any legal infirmity in the view taken by the Tribunal specifically when various portions of admission are amply corroborated by statements of other witnesses and documents. 13. The learned counsel for the appellant also referred to the decision in Savaram D. Patel Vs. Commissioner of Customs, Ahmedabad [2014(312). ELT 193 (Tri.-Ahmd.)], where this Tribunal relying on the decision of the Apex Court in K.I.Pavunnyy Vs. Assistant Collector (Hqrs.), Central Excise Collectorate, Cochin [1997 (90) ELT 241(SC)] , observed that one needs to examine that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce the relevant extracts from the statements of Shri T. N. Malhotra :- Statement of Shri T.N.Malhotra, dated 07.02.2018 I further state that CAN has informed me that one SIIB alert has been placed on our firm issued vide letter C.No.VIII/ICD16/TKD/SIIB import/Misc./REP/80/2015 dated 15.05.2015 for investigating in respect of undervaluation of goods. In this connection B/E No.4157406 dated 27.11.2017 was referred from Import-shed to SIIB NOC, the container No.KMTU-7359650 carrying the subject consignment was opened and 100% examination was done on 07.12.2017 and goods were found as per invoice and packing list and value of the said goods appeared to be fair. Sample of the consignment Polyester Filament for Paint Brush was sent to CRCL for testing purpose in order to ascertain that subject goods are not made of Nylon. It is come to know that the subject goods i.e. polyester filament for paint brushes are wholly composed of polyester and we are entitled to avail the duty exemption under Customs Notification No.50/2017. I further state that I came here today before you to request the release of goods vide two containers are currently in shed. I also came to know that there is SIIB ale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally or otherwise subject to outcome of test reports. I promise to pay the differential duty arising out of any misdeclaration, if any, and any fine and penalty that the customs may impose on these B/Es. I further state that I do not want any show cause notice, personal hearing in this matter the case may be adjudicated in my absence. Statement of Shri T.N.Malhotra, dated 16.04.2018 On being asked, I state that I had appeared on 26.03.2018 7.2.2018 in connection of the consignments detained by SIIB had also tendered my voluntary statement. I have been shown my statement dated 26.03.2018 07.02.18 and I agree that the statement had been tendered by myself voluntarily and without any coercion. In token of same, I have appended my dated signature on statement dated 7.2.18 26.3.18. On being asked, I state that in my statement dated 7.2.18 I had admitted that in few consignments I have done under-invoicing with the help of overseas supplier for which we had changed invoices instead of original invoice and had shown value of goods reduced by 15-20% of actual of FOB value of the goods. The actual value was not declared in the B/E invoices but value on the basis of changed invoices, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) ELT 467 (Delhi)] have been relied on, where again the Tribunal reiterated that the statement has to be read as a whole and cumulatively, and it was not open to single out the confessional portion of the statement. We have no quarrel with the principle laid down by the Tribunal, however, from the impugned order, we find that the Adjudicating Authority had considered the entire statement and reproduced the relevant paras of the statement. There is no error in such an approach and therefore the objection in this regard does require any interference. DOCUMENTARY EVIDENCE 18. Another factor to be noted is the documentary evidence retrieved by Shri T.N. Malhotra from his email and we-chat from the computer, which have been accepted and admitted by him in his statement and explained. Thus the statements of Shri T.N. Malhotra is duly supported by documents and hence the same can be relied on. 19. Having arrived at the above conclusion, we would like to refer the principle enunciated in Commissioner of Central Excise, Madras Vs. Systems Components Private Ltd [2004(165)ELT136(SC)] by the Apex Court that once the assessee admits, there is no need for the department to prove the same thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 108 of the Act 1962. In such circumstances, it is too much for the respondents to say that the electronic evidence could not have been taken into consideration. In fact, the electronic evidence on record fortifies what has been stated by the respondents in their statements recorded under Section 108 of the Act. 100. In the aforesaid context, we may refer to one order passed by the CESTAT Principal Bench, New Delhi, in the case of Laxmi Enterprises vs. Commissioner of Customs (Prev.), New Delhi, reported in 2018 (361) E.L.T. 1054 (Tri.-Del.). We quote the relevant observations made by the Principal Bench of the Tribunal as under : 11. The appellant has raised objections to the admissibility of the documents recovered from the laptop. They have cited the provisions of Section 138C of the Customs Act. We find such objections without basis in as much as the truth of the documents printed-out from the laptop has been admitted by Shri Sumit Chawla son of the proprietor in clear terms. Further, their clear admission by him that these invoices recovered, reflect the correct valuation at which the transaction was concluded with the valuation supplier. Further the appellant was given an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Adjudicating Authority has elaborately discussed the applicability of Rules 4 to 9 in sequential manner having rejected the valuation under Rule 12. The relevant paragraph from the impugned order regarding the applicability of the valuation is reproduced here:- 45 . I find that Rule 3 (1) of the customs valuation rule states that value of the imported goods shall be the transaction value adjusted in accordance with the provisions of Rule 10. Rule 2(g) states that transaction value means the value referred to in sub-section (1) of Section 14 of the Customs Act, 1962. Section 14 (1) of the Customs Act, 1962 provides that transaction value of the imported goods shall be the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation. Here statute has laid special emphasis on price paid or payable. The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. The payment need not necessarily take the form of a transfer of money. Payment may be made by way of letters of credit or negotiable instruments. Payment may be made dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behind the Valuation Rules for determination of transaction value is that it should reflect the actual price paid or payable for the import goods. I find that, in keeping with the principles of the said rules and Section 14, the actual price paid by the buyer of the goods as reflected in the evidences discussed above can be taken as the transaction value of the impugned goods. As discussed above, the actual values of the impugned goods were found from the email correspondence/wechats and the same should be taken as the basis for re-determining the transaction value of the impugned goods for the purpose of quantification of the duty payable thereon. These values are comparable with the value declared by importer M/s. SR Bristle Products Pvt. Ltd. in their import from 2015 onward. These direct evidences form the basis of determination of the correct transaction value of the goods. under Section 14 of the Customs Act, 1962 read with Rule 9 of the CVR 2007 as applicable. In other Bills of Entry, where such direct evidences are not available, an average value enhance factor of 1.32 has been taken for calculating the actual value of the imported goods, as discussed above, for calculating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to are based on the peculiar facts of that particular case and no principle of law has been laid down. For instance, the findings recorded in K-Link Healthcare India (Pvt.) Ltd Vs. Commissioner of Customs (AIR), Chennai [2018(364)ELT 476 (Tribunal-Chennai)] was that the claim of the appellant assessee for a particular classification by itself will not make the case for mis-declaration, when all the required details, including the product literature and the imported product itself being available at the time of assessment. 24. On the other hand, we find that the facts of the case and the issues considered on the contentions raised in M/s Laxmi Enterprises (supra) are absolutely identical, where the goods imported were found to be mis-declared, and on search, laptop and mobile phone was recovered from where the data retrieved included, pro forma invoices, price list, commercial invoices, etc. of various goods relating to the consignments imported in past by the appellant therein for which the real value of the goods was hidden from the customs authorities. The Tribunal concluded that there is no infirmity on the part of the Adjudicating Authority in determining the value on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court even discarded the contention that the statement was subsequently retracted as the same was done after a period of two years. 26. Mr. Nagendra Yadav, the learned Authrised Representative has referred to the decision of the Tribunal in Welcure Drugs and Pharmaceuticals Ltd. Vs. Commissioner of Central Excise, Jaipur [2007(213)ELT 710(Tri.-Del.)] , where also the Director of the appellant company as well as the authorised signatory in their statements accepted the clearance of the goods on the basis of the parallel invoices recovered during the search by the officers and paid the duty on the basis of the parallel invoices. The statements were believed as no evidence was placed on record that the statements were recorded under pressure and the retraction made was after 20 to 30 days, which had no effect on the legality of the case proceedings. 27. The learned Authorised Representative has relied on the decision of this Tribunal in Carpenter Classic Exim Pvt Ltd. Vs. Commissioner of Customs, Bangalore [2006(200)ELT 593 (T-Bang.)] here also, the documents seized indicated that the value declared for customs purposes is much less than the actual value. When the party was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. 29. We, therefore, conclude that in view of the documents retrieved by the appellant himself and his admissions made in the statement recorded under Section 108 proves the allegations of undervaluation beyond any doubt. The rejection of the declared value under Rule 12 has been rightly adhered to and following the sequential order as per the Valuation Rules, the valuation determined on the basis of parallel invoices is correct in view of the judicial pronouncements in similar circumstances. The contention that Revenue has not relied on the NIDB or EDW data has no merits in the facts of the present case. INVOCATION OF EXTENDED PERIOD OF LIMITATON INCLUDING IGST 30. In view of the discussion above, it is evident that the appellant had mis-declared the value of the goods and suppressed the correct value of the goods, which was much higher than what was declared to the custom authorities with intent to evade the customs duty to be levied on the correct value. The entire modus-operandi was disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the only active Director of the company, who was solely looking after the entire affairs of the company and the master mind behind the evasion of customs duty. We also find that Shri T.N. Malhotra was himself negotiating with the foreign supplier and the same is admitted by him in his statement and is corroborated by various e-mails retrieved by him. For his acts of omission and commission as discussed above, the ingredients for imposing the penalty under Section 112 are satisfied. Under Section 114AA, penalty has been imposed both on the appellant company and Shri T.N. Malhotra, as the importer had intentionally made incorrect declaration of the value in the B/E by manipulating the invoices. Thus, we find that penalty under Section 112 has been rightly imposed as the goods have been held to be mis-declared by the appellant and were liable for confiscation under Section 111(m) of the Act. Similarly, we find no reason to interfere with the penalty imposed under Section 114A and Section 114AA of the Act. PAST IMPORTS 34. We now come to the challenge to the past imports being without any basis and the value being enhanced on presumptions and conjectures. The learned Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts are traceable and available, the transaction value can be rejected and reassessed on the basis of the recovered invoices or other documents. Where no such documents are available pertaining to the past imports and the valuation of the past imports is computed on the basis of the current invoices, etc., the same is not permissible. We find from the impugned order that the Adjudicating Authority had categorically noticed:- I find that differential Customs duty Payable by M/s S.R. Bristle Products Pvt. Ltd for past Bills Entry in respect of which no parallel invoice were found or submitted by the importer has been re-calculated by enhancing the declared assessable value 1.32 times as detailed in the show cause notice for all the imports prior to 13.10.2017. Despite having concluded as above, the Adjudicating Authority took a contradictory view that the importer must have undervalued in respect of other bills of entry filed since the goods imposed are similar/identical goods from same source. We do not agree with such findings as the same seems to be based on conjectures and surmises. Hence, the valuation arrived at in respect of five live consignments cannot be loaded in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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