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TMI Blog2024 (8) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... he counterfeit goods needs to be sustained. Valuation of other goods - HELD THAT:- The show cause notice proposed to reject the declared transaction value under rule 12 for this reason. In paragraph 17 of the show cause notice, it was indicated that valuation could not be done under rule 4, 5, 7 and 8 of the Valuation Rules and that there was no contemporaneous data of identical or similar goods. For this reason, it was proposed to conduct a market survey or inquiry as per rule 9 ( Residual Method). The market survey was conducted after taking the representative samples of the goods in the presence of Pankaj Gupta, proprietor of the appellant firm and others to ascertain their market value in India. From the prices found in market inquiry, abatement of 60% was given in lieu of the duty and profit margin and other expenses to arrive at the assessable value - It is recorded in the show cause notice that this method of valuation was accepted by the importer and its Customs Broker and importer had paid duty on the enhanced value. In respect of certain other items such as wind cheater, PU ball, baby car, PVC table cover, PU wheel cover and resin show piece, the declared values were acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 111 (1) and 111(m) of the Customs Act, 1962. iii. The goods as mentioned at Sl. No 1 to 10 in table 9 have been provisionally released to importer against bond of value Rs 1,65,49,893/- and bank guarantee of Rs 13,30,000/-. Accordingly I confiscate the entire bond value towards the redemption fine of Rs 1,65,49,893/- that is imposed for release of the said goods. This amount should be recovered by way of encashment of the bank guarantee executed by the Noticee and thereafter by enforcement of bond executed by the noticee 1, and in case the same cannot be enforced the said amount should be recovered as penalty. iv. The goods as mentioned at Sl No 11 in table 9 above are available for confiscation and are confiscated, but allowed to be redeemed on payment of redemption fine of Rs 11,42,993/- v. The Customs Duty of Rs 53,40,105/- collectively determined on goods other than branded is demanded and confirmed. The duty of Rs 6,11,424/- paid by the importer against the B/E No 9371947 is appropriated against the duty so demanded and confirmed. Accordingly duty of Rs 47,28,681/- is recoverable from the Noticee 1 under Section 28 A of the Customs Act, 1962 along with the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iron holder Taiwan Elmo SS16 21 835.8 kg. SS18 10 336.04 Kgs SS28 7 273.2 Kgs Iron Elmo SS16 14 423.93 Kgs SS22 6 183.1 Kgs SS28 15 384.9 Kgs SS38 16 355.64 Kgs Total Weight 89 2792.61 Kgs 2 Imitation Chain (Metal+Glass) Cup Chain Laser PP24-280 80 1821.1 Kgs PP24-198 29 310.4 Kgs PP31-230 12 310.4 Kgs PP31-150 15 312.4 Kgs PP18-235 48 959.71 Kgs PP24-196 8 215 Kgs PP14-275 155 2853.46 Kgs PP14-326 11 218.37 Kgs Total Weight 358 7154.44 kgs Fashion Sheet SS8.5 10 269.1 Kgs 3 Wind Cheater Wind Cheater Free 10 100 1000 pcs 4 PU Ball PU Ball Small 20 600 12000 pcs Large 20 720 14400 pcs 5 Baby Car Baby Car 2 2 pcs 6 PVC Table Cover PVC Table Cover 25 2 40 2000 mtr 7 PU Wheel Cover Steering Wheel Cover (auto part) K P Accessories (large size) 81 60 4860 pcs 8 Resin Show Piece Resin Fish 1 8 8 pcs 9 Resin Show Piece Show Piece 3 1 3 pcs 10 Plastic Optical Box (empty) Optical empty boxes of diff. intl. brands (Total no. of cartoons-18) Brand name mentioned on boxes Qty in Pcs. PRADA 194 MARC JACOBS 189 RAY BAN 203 Giorgio Armani 24 CHROME HEARTS 98 MIU MIU 87 EMPREIOR ARMANI 20 LOUIS VUITTON 383 CHANNEL 92 CARTER 100 DITA 55 DIOR 40 MONT BLANC 40 GUCCI 84 DOLCE GABBANA 41 TOM FORD 100 CH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2015 he said that he had earlier made false statements that the goods at serial no s 4, 5, 6 belonged to Ms. Neetu Jain and, in fact, they were all his. He had placed the purchase order over telephone on his Chinese supplier and obtained the goods. He further said that he had ordered only unbranded goods but wrong consignment was sent by the supplier and he was not responsible for the mistake of the supplier. He disowned the branded goods as he had not placed any order for them and they were not his goods. If these goods were infringing IPR rules and regulations he said that he had no objection to them being detained or seized or absolutely confiscated by the authorities and that he would not claim the ownership of those goods in future. It was his humble request to detain or confiscate the goods infringing IPR laws and rules and to release the rest as soon as possible. He did not want any show cause notice or personal hearing and said that he was ready to pay differential duty fine or penalty as required. 8. Sh. Samir Jha, Customs Broker of KVS Cargo, gave statement on 21.10.2015 in which he said that his office had filed the Bill of Entry on the basis of the documents produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,993/-. Since the goods were held liable for confiscation, penalty was found to be imposable under section 112 (a) read with section 114A and 114AA on Sh. Pankaj Gupta. 12. Learned counsel for the appellant made the following submissions: (a) The Commissioner did not properly consider the show cause notice as he had not dealt with the question of rejection of the declared value under rule 12 of the Valuation Rules. He had also not dealt with how the rule 9 of Customs Valuation Rules is applicable in the present case without going through the remaining rules; (b) The Commissioner erroneously ordered confiscation of the counterfeit goods and did not decide the value declared by them on such goods; (c) The right holder as per Intellectual Property Right (Imported goods) Enforcement Rules, 2007 had not joined the investigation; (d) The appellant had placed orders for unbranded goods as a part of its regular business but during examination, some branded goods found. Since the brand holder had not joined the investigation, the goods could not have been confiscated absolutely. The imposition of penalty is also, accordingly, incorrect. He placed reliance on the following case laws: (i) Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the differential duty as per the calculation of value by the department. He also admitted to submitting manipulated documents to the Customs and said that the balance amount used to get adjusted with M/s Pride international ( Neetu Jain ). Later, he said that in fact, that all unbranded goods belonged to him only. Since some goods were disowned and the mis-declaration of the remaining goods was admitted and the method of re-determination of value by the department was accepted, there was no need to give details of the method of re-determination of value as stated at Para 13.1 onwards as per the said SCN. vi) Therefore, the proper officer had reasonable doubt about the declared value and correctly rejected the declared transaction value under Valuation Rule 12. Reliance is placed on Commissioner of Customs, Delhi vs. M/s Hanuman Prasad Sons. [ 2020 (12) TMI 1092 - CESTAT NEW DELHI] vii) Even in paragraph R of the appeal, the appellant admitted that it was not interested in the counterfeit goods and had disowned them. viii) the impugned Order does not warrant any inference which may be upheld and the appeal may be dismissed. 14. We have considered the submissions advanced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponded to the show cause notice or participated in the personal hearing. We find it impermissible to the appellant to now take U-turn and claim those goods which did not belong to him at all. Therefore, the absolute confiscation of the counterfeit goods needs to be sustained. 20. As far as the valuation of other goods is concerned, the declared value in the Bill of Entry was for certain goods described in the Bill of Entry, invoice and packing list. What were actually imported were a different set of goods. Evidently, the price of the declared goods cannot be the same as the price of much larger goods quantity of goods found during examination. The show cause notice proposed to reject the declared transaction value under rule 12 for this reason. In paragraph 17 of the show cause notice, it was indicated that valuation could not be done under rule 4, 5, 7 and 8 of the Valuation Rules and that there was no contemporaneous data of identical or similar goods. For this reason, it was proposed to conduct a market survey or inquiry as per rule 9 ( Residual Method). The market survey was conducted after taking the representative samples of the goods in the presence of Pankaj Gupta, propri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination of value but only says that Valuation Rule 8 can be employed before Valuation Rule, 7 at the choice of the importer. Rule 7 deals with the deductive value where the values of identical or similar goods imported and sold in India are reckoned and after giving abatement towards duties and other margins, the value is determined. Rule 8 deals with cost of manufacture and it requires the value to be based on the cost of manufacture plus an amount towards profit and general expenses. The show cause notice recorded that Rule 7 and Rule 8 were also not feasible in the case. The appellant had not produced before us any evidence to show identical goods were being sold in the market so that rule 7 could have been applied or that identical goods were being manufactured in India so that rule 8 could have been applied. Under these circumstances, it was appropriate for the department to have followed rule 9 which is the residual method to be employed using principles consistent with the remaining rules. In respect of certain goods the values which were declared were accepted as such. In respect of certain goods market survey was conducted in the presence of the appellant and from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The penalty imposed on Sh. Pankaj Gupta, the proprietor of the appellant is Rs. 94,51,763/- under section 112(a) read with Section 114A and section 114AA of the Act. No breakup is given on the amount of penalty imposed under the three sections. We find section 114A provides for penalty but if a penalty is imposed under that section no penalty can be imposed under section 112 also. Section 114AA provides for penalty for a person knowingly or intentionally making, signing, using or causing to be made signed or used any declaration, statement of documents which is false or incorrect in any material particular in the transaction of any business for the purposes of Act. While there is evidence in this case of mis-declaration of the nature of the goods and consequently the need for re-determination of the value, the intention of the appellant or his knowledge has not been clearly brought forth in the order. We, therefore, find that penalty under section 114AA needs to be set aside. In our considered opinion it would meet the ends of justice if penalty under section 114A and 114AA are set aside and the penalty under section 112(a) is reduced to Rs. 9,00,000/- . 26. In view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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