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TMI Blog2024 (12) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... Bill of Entry No. 4747421 dated 10.01.2018 were examined. The goods were declared as 65" LED TV Panel unbranded with declared price of USD 225 per piece. During the course of examination, the goods were found to contain 65" curved LED TV Panels and the brand name 'Samsung' was found printed on the packing material of goods as well as on the circuit board of the said goods. Both the observations were contrary to the declaration by the importer in the said Bill of Entry. Based on the said mis-declaration, the appellant had availed the benefit of Exemption Notification No. 50/2017 dated 30.06.2017 which was available only for parts and panels of LED TV and was not applicable while importing complete TV. 1.2 With these observations matter was further investigated. After recording various statements including that of the proprietors/Karta of the importing firms and from the scrutiny of the documents including the proforma invoices, department observed that the full TV sets in SKD conditions were ordered. The importers have been importing in past also complete TV sets in SKD condition classifiable under CTH 85287211, 85287212 and 85287213 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A and 114AA of the Customs Act, 1962. Penalty was also proposed to be imposed upon the third appellant Shri Dinesh Kumar Verma, Director of M/s. Shigura Devices & Systems Pvt. Ltd. under Section 112 (a) and 114 AA of the Customs Act, 1962. The Bonds and Bank Guarantees submitted for provisional release of seized goods of M/s. Mittal Impex were proposed to not to be enforced against the impugned demand. The said proposal in totality has been confirmed by the departmental adjudicating authority vide the order under challenge. Being aggrieved the appellants are before this Tribunal. 2. We have head Shri Vikas Sarren and Shri Akhil Krishan Maggu, learned Advocates for the appellant and Shri S.K. Rahman, learned Authorized Representative for the department. 3. Learned counsel for the appellant has submitted that the impugned show cause notice has falsely and malafidely incriminated the appellants without any iota of evidence to support the said incrimination. The allegations are based on one commercial invoice bearing No. 16G028 dated 09.09.2016 which was retrieved by the department. However, the said invoice was never foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration, pollution certificate etc. has approved the appellants to claim the benefit of said notification. Once the department has given approval in favour of the appellant, it cannot allege the benefit taken by the appellant is illegal. 3.4 Learned counsel for appellants has also submitted that the department has wrongfully raised the demand for Bills of Entry for the period prior 2017 including those on which even the benefit of notification was not taken alleging that the past Bills of Entry were also imported complete TV sets. 20 old Bills of Entry out of 24 are either of the Year 2015 or Year 2016. The chartered engineer report for Bill of Entry No. 5131023 dated 03.05.2016 is impressed upon wherein the goods imported were found to be the parts of TV and the TV panels. No such report got obtained with respect to any other Bill of Entry nor even with respect to the live Bills of Entry of January 2018. 3.5 Another arguments advanced by the learned counsel is that the entire case is presumptive based on the documents retrieved as computer printouts but Section 138C of the Customs Act, 1962 has not been complied with by the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry No. 3569610 dated 10.10.2017 fabricated invoices and packing lists were found attached. The documents have clearly established that the goods were ordered to be supplied as TVs in SKD forms which were deliberately unassembled into panels and parts and were shipped into different containers to take the inadmissible benefit of S.No. 514 of Notification No. 50/2017 dated 30.06.2017 which is applicable only in respect of parts of TV. The appellant has mis-declared complete TV sets as monitors/parts and panels of TV with mala fide intent to evade the payment of customs duty. The values have also been grossly undervalues. Learned Departmental Representative in their written submission has tabulated the combination of various consignments and impressed upon that the comparison is sufficient to reveal that the appellant has imported 4436 + 13236 i.e. total number of 17672 sets of LED TVs in SKD condition. The comparison also clarifies that total the number of imported LED TV panels are matching with total number of parts imported of LED TV of same size. It was stated that as import of consumer goods in SKD condition is restricted under the import p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed? (5) Whether the extended period of limitation has rightly been invoked while issuing the impugned show cause notice? 6. Issue No.1 & 2 6.1 To adjudicate this issue, as can be seen from the facts that the appellants have declared the goods as parts/ components of Television and claimed classification under CTH 85299090 of Customs Tariff Act while the departmental authorities have proceeded to classify the goods as complete Television in complete knock down condition (CKD) under CTH 852872. Based on these facts department issued show cause notice dated 07.02.2020 to the appellants alleging that the items imported could constitute essential character of Television and should be assessed as such in terms of Rule 2(a) of Rules of interpretation of the Customs Tariff Schedule. Invoking the said rule, it was stated that an article which is incomplete or semi-finished, if has the essential character of complete or finished article then it has to be assessed as complete article for the purpose of classification of the goods under Customs Tariff. 6.2 Department has taken the plea that going by the language of Rule 2(a) the question whether parts or components are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier decisions were referred to. It was held that In order to classify the incomplete or unfinished product under the heading relevant to the complete product the condition to be fulfilled would be that as imported the incomplete or unfinished articles should have the essential character of the complete article. In page 2 of Vol. I of CCCN Explanatory notes it has been mentioned with reference to the provisions of rule 2(a) in the CCCN (which is the same as rule 2(a) in the first Schedule to Import Tariff of our Customs Tariff Act) that the provisions of that rule also apply to blanks, the term 'blank' being taken to mean an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which, other than in exceptional cases, can only be used for completion into the finished article or part. Therefore, in order to find out whether the incomplete article as imported has the essential character of the completed article the tests to be applied would be whether the imported article has attained the approximate shape or outline of the finished article or part and whether it can only be used for completion into the particular fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete article, they have to be assessed as complete article. Goods imported separately cannot be clubbed together because they are not presented as one CKD pack at the time of import. If some non-essential items are not imported, the CKD pack can still become complete article. But if the parts missing are essential, the CKD pack cannot constitute a complete article. Issue arises which is essential and which is non-essential. This is a matter of fact and has to be decided in each case. Simply the essential parts do not make a complete article. This has also been clarified by the Board vide a Circular No.55/95-Cus dated 30.5.1995 (F. No.528/42/95Cus.(TU)as extracted below: Circular No. 55/95-Cus. dated 30/5/95 F.No. 528/42/95 -CUS (TU) Government of India Ministry of Finance Department of Revenue, New Delhi Subject : Assessment of goods imported in CKD/ SKD condition. The Board has had the ocassion to examine the question of assessment of goods imported in unassembled form, particularly in the context of certain recent imports of cars in SKD kits form with the omission of a few parts like the batteries and tyres. The question is not a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he essential character of a complete article, they have to be assessed as complete article. Here the Supreme Court agreed with the Tribunal and the Revenue holding that once the goods are imported in CKD condition and presented before Customs as such the goods are classifiable as complete electronic calculator. If some non-essential items are not present in the CKD pack, the latter can still become complete article as ruled in the case of Galaxy Agencies vs.C.C.E-2009 (239) ELT 478 (Tri.). In the case of Bayerische Motoren -2006 (193) E.L.T. 138 (A.A.R.), also it is held that Motor cars imported in CKD units without seats have to be treated as complete cars. The Tribunal in the case of Wipro Ge Medical vs. CC, - 2006 (202) E.L.T. 141 (Tri.) held that the CKD pack imported does not constitute a complete scanning machine because it did not contain essential parts like probes, monitor and keyboard assemblies. Simply few of the essential parts do not make a complete article. Thus the conclusion is that it has to be established that the goods together should be able to provide completeness to the main product, and such case has to be adjudged on its own fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les, has been considered by hon'ble Apex Court in the case of Girdharilal Bansidhar v. Union of India - AIR 1964 (SC) 1519 wherein the Apex Court observed as follows :- "..... We cannot accede to the position that it is the intention of the rule that importers are permitted to do indirectly what they are forbidden to do directly, and that it permits the importation separately of components which have no use other than as components of an article whose importation is prohibited, and that an importer is thereby enabled to assemble them here as a complete article though if they were assembled beyond the Customs Frontiers the importation of the assembled article into India is prohibited." 6.10 This decision when read with the decisions discussed above, we hold that the ultimate requirement for invoking Rule 2(a) of GRI is that the goods imported during the proximate time should include such number of parts as are sufficient to consider the goods as the complete article, as different from being mere parts. 6.11 Reverting to the facts of the present case, we observe that the show cause notice has alleged misdeclaration with respect to 24 consignments. Most of them (20) are per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for clearance of similar consignments of unbranded monitors at various ports in India. The valuation is in order 2. These monitors can be used solely with automatic data processing system such as computers 3. These monitors do not have any TV tuners in it and hence they can't be used as TELEVISION RECEPTION APPARATUS 4. As regards HDMI slots in the back of LED DISPLAY monitors, they have been provided for PUBLIC ADDRESS system 5. Difference between TV and computer monitor is that TV is set up to receive over the air broadcast signals and have inputs that work with cable or set top box or game consoles or DVD players while computer monitor is designed to work only with computer or automatic data processing system. 6.13 The perusal of this report reveals that the TV is a complicated electron i.e. product and a product namely LED panel in itself is highly insufficient to be called as TV. There are many other parts and components which are collectively required to hold that the LED monitor has an essential character of being called as TV. As already held department has not got the technical evaluation done about the impugned imported goods. We hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Those parts were otherwise complete parts of the TV except for TV receiver. Also in that case the appellant used to assemble all parts to the TV receiver to make the complete TV sets. The TV receivers were also upgrated in the manufacturing unit of the said appellant. The manufactured TV receivers after being completely manufactured were used to be disassembled along with the relevant material and the individual serial numbers to be sent to various satellite units where those receivers used to be reassembled. It is in the light of these facts that the Hon'ble Apex Court had concluded that the imported goods had the essential character of being called the TV receivers/TVs. 6.17 In the light of above discussion, we hold that the imported goods are the parts and components of the TV as different from the complete TV in SKD condition and Rule 2 of GRI cannot be invoked in such situations. Both the issues therefore stand decided in favour of the appellants. 7. Issue No. 3 Entry at Serial No. 514 of Notification No. 50/2017 dated 30.06.2017 reads as follows: 514 8529 LCD (Liquid Crystal Display), LED (Light Emmitting Diode) or OLED (organic LED) pane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of original. 15. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied: (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under Section 65B (2) of the Evidence Act, and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, compact disc (CD), video compact disc (VCD), pen d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C has upheld the above findings while agreeing with the finding that Section 65B is a complete code in itself for the admissibility of electronic evidence and shall not be affected by other provisions of the Evidence Act. The Hon'ble Apex Court in Anvar v. Basheer (supra) also held that - "...if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act, the same is admissible in evidence, without compliance with the conditions in Section 65 B of the Evidence Act." Justice Nariman clarified that this dictum should be read by omitting the words "under Section 62 of the Evidence Act." This is because Section 65B is a complete code for electronic evidence and shall supersede other provisions such as Section 62. Justice Nariman implies here that it is not necessary to refer to Section 62, as Section 65B(1) itself distinguishes between the original electronic record and the secondary copies of the electronic record.. 8.3 After perusing the record of the case, we note that in the present case the computer print outs of the performa invoices have not been retrieved by the officers of the department nor from the seized laptop.&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f identical or similar items or any allegation of buyer and seller being related or any extra payment made by importer, declared value cannot be rejected particularly alleging undervaluation when imported goods not prohibited and freely importable - Section 14 of Customs Act, 1962. 8.5 In this decision itself, it has been held that it is trite law that since the goods were assessed by proper officer based on transaction value, onus lies on the Revenue to prove undervaluation, which it has failed miserably to do so since it did not show any contemporaneous import data of identical or similar items or NIDB data to indicate undervaluation and therefore the invoice value is required be accepted as the transaction value itself instead of being discarded. We draw our support from the judgement of the Hon'ble Supreme Court in the case titled as CCE Vs Sanjivani Non- Ferrous Trading Pvt. Ltd. MANU/SC/1456/2018: (2019) 2 SCC 378 and CC Vs South India Television Pvt. Ltd. MANU/SC/2966/2007: (2007) 6 SCC 373. We find that there is no allegation or finding that the buyer and seller being related or of any extra payment to the supplier beyond the normal authorized banking channels a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation about comparable imports. For proving under-valuation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts' proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of undervaluation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore, the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The value in the export declaration may be relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip set which has to be installed while manufacturing TV, is of Samsung brand. There is no evidence of the department to falsify the same. On the contrary to prove that the 65' TV is unbranded appellant has supplied the copy of certificate issued by foreign supplier (XIN YING GLOBAL LTD) dated 22.01.2018 vide letter dated 23.01.2018 and 15.02.2018 which clearly states that the only part which is of Samsung brand in 65' TV set is the internal chip set. It was also mentioned in said certificate that the description, 'Samsung' mentioned (Samsung) on carton boxes is only customized in reference to show that Samsung IC used in main board so the customs labor doesn't need to take out the panel out of packing in production during normal course. Department has failed to falsify said certificate and has also failed to produce any evidence to discharge their burden of proving the imported goods to be branded 'Samsung' products. On the contrary the appellant in person had produced the panel and chip and to show that no brand was mentioned as the pane. 'Samsung' was embossed only on a chip. Department could not deny the fact it is rather on record that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consignment and the brand stickers were also affixed on the packing material of the consignment. Since the observation falsifies the declaration, it becomes the case of suppression of material facts and the extended period of limitation is mentioned to have been rightly invoked. On the contrary the submissions of appellants have been that the LED panels were unbranded. The only branded part was the electronic chip which was to be inserted on the mother board while manufacturing the TV. With respect to the stickers of Samsung brand on the packing material the defense put forth is that it has been the mistake of the exporter. The certificate of the exporter to this effect has been relied upon. Learned counsel while falsifying the allegations of suppression and misrepresentation has also mentioned that in fact the department has failed to act fairly, the details of the Bills of Entry about the examination of the goods with respect to 14 number of Bills of Entry was not provided to the appellant. It is vide an application dated 22.05.2020, the appellant obtained those details by filing an application dated 12.06.2020 under RTI Act. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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