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TMI Blog2025 (3) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... goods alone are liable for confiscation. Accordingly, the confiscation of the goods found to be in excess than the declared quantities in the bills of Entry and the non declared goods, upheld and the confiscation of the goods declared in the bills of entry set aside. Confiscation of the goods on account of mis-declaration of value - HELD THAT:- The ld. adjudicating authority has admitted that the value of identical goods were not available and therefore, the he has adopted the value of similar goods in contemporaneous imports. However, it is observed that no documentary evidence such as copies of invoices, Bills of Entry and relevant invoices were supplied to the appellants, in support of the higher value of contemporaneous imports of similar goods cited by the Revenue. It is the settled position of law that transaction value cannot be rejected on the basis of assumptions and presumptions. There should be cogent evidence for contemporaneous imports to substantiate the rejection of transaction value. Rule 3(2) of the Customs Valuation Rules, mandates that if the transaction value is to be rejected, there must be evidence available on record to justify the same. However, it is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f some act which would render the imported goods liable to confiscation under Section 111 of the Customs Act, 1962. However, since there was no proposal for imposing penalty on him under Section 112(a) in the show cause notice, we observe that penalty under Section 112(a) is not imposable on the Director. Penalties imposed on both the appellants under Section 114AA - HELD THAT:- The said section is applicable when there is no existence of goods but the documents are filed fraudulently. In this case, the supplier has agreed that the documents issued by him are genuine, Accordingly, Section 114AA of the Customs Act, 1962 cannot be invoked in the instant case to impose penalty either on the appellant importer or on the Director of the appellant importer. Consequently, no penalties are imposable on the appellants under Section 114AA ibid., in the facts and circumstances of the case. Conclusion - i) The confiscation of the goods found to be in excess than the declared quantities in the bills of Entry and the non-declared goods, upheld. The confiscation of the goods declared in the bills of entry set aside. ii) The differential duty demanded on account of enhancement of value is not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of the demands and imposition of penalties and redemption fine, the appellants have filed these appeals. 3. The facts of the case are that the appellant-company, M/s. S.K. Works & Vyapar Pvt. Ltd., imported 3 consignments of different consumer goods such as bowl sets, buckle, elastic rope button cells, garment accessories, umbrella, bags, etc., in the month of February, 2014 from M/s. Lakshmi Overseas Hong Kong Limited, Hong Kong. The total value of these consignments was USD 33,293.48 (C&F). Accordingly, the appellant filed 3 Bills of Entry after adding insurance charge as 1.125%, as per norms. The details of the Bills of Entry, as submitted by the appellants, are furnished below: - Sl. No. Bill of Entry No. Date Declared Ass. Value (in Rs.) Admitted duty (in Rs.) 1. 4746451 26.02.2014 5,57,580.65 1,90,593.00 2. 4746281 26.02.2014 4,15,159.00 1,43,312.00 3. 4720638 24.02.2014 25,44,356.82 7,31,266.00 Total 35,17,097.00 10,65,171.00 4. The office of the Special Investigation Branch (SIB) intercepted the goods and conducted 100% examination of the goods. Upon examination, some of the goods were found to be in excess than the quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,46,788/- under section 28 (4) of the customs Act, 1962 along with interest under Section 28AA of the Customs Act, 1962 from the importer. 21.5. 1 order appropriation of the already paid duty of Rs. 10,65,171/- and Revenue deposit of Rs. 7,20,695/- and Bond of Rs. 61,71,413/- furnished at the time of provisional release of goods imported vide the said three Bills of Entry towards the duty demand of Rs. 24,46,788/- as detailed in Table No. 5. 21.6. I order confiscation of the goods imported vide Bills of Entry Nos. 4746451 dated 26.02.2014, 4746281 dated 26.02.2014 and 4720638 dated 24.02.2014 and valued at Rs.22,43,617/- Rs. 16,08,490/- and Rs.88,77,874/-respectively (as detailed in Table No. 4 & 5 at above) under Section 111(i), (1) & (m) of Customs Act, 1962. However, the noticee is given an option to redeem the goods under Section 125 of the Customs Act, 1962 on payment of a fine of Rs. 25,00,000/- (Rupees Twenty Five Lakhs only). 21.7. I impose a penalty on M/s S.K. Works and Vyapar Pvt. Ltd. under Section 114A of the Customs Act, 1962 for Rs. 20,00,000/- (Rupees Twenty Lakhs only). 21.8. I impose a penalty on M/s S.K. Works and Vyapar Pvt. Ltd. under Section 114AA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e importer-firm at the time of import has been rejected by the ld. adjudicating authority as false and without any evidence, but sufficient materials were not placed on record by the ld. adjudicating authority for rejection of the invoices issued by the supplier. 7.3. The appellant has also made the following submissions in support of their contentions: - (i) In respect of the allegation at Para 12 of the SCN that the invoice submitted at the time of import was false / wrong invoice, the appellant submits that the supplier had already admitted their mistake in wrong shipment of goods vide a letter dated 22.03.2014. Therefore, the invoice should not be held as false / wrong invoice as the invoice was issued by the supplier themselves. The invoice could only be treated as false if the supplier affirmed that they had not issued those invoices. Merely for such a mismatch, the invoice should not be, ipso facto, treated as false/wrong invoice. (ii) In Para 9 of the SCN it is proposed to reject the transaction value under Rule 12 of the Customs Valuation Rules, 2007 on the ground that the declared value was quite low as compared to ascertained value. Though the notice referred some v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vokedonly if there is doubt as to genuineness of transaction value between exporter and importer such as in the event of extra remittance c) CC Vs- Radheshyam Ratanlal-[2006 (202) ELT 500 (Tri-Mum)]- there was no evidence that there was a flow back of any additional funds from the importer to the supplier and hence held the transaction value to be genuine which was affirmed by the Supreme Court-2007(210) ELT A 72. (v) In Para 8 of the Show Cause Notice it has been stated that the contemporaneous import data of identical and similar goods was accessed and it was found that identical/similar items were being imported at higher values than the declared value of the imported goods by the importer. On the other hand, it is stated at Para 9 that as the contemporaneous import data of identical items was not available, the value should not be re-determined under Rule 4 of the Custom Valuation Rules, 2007. Such a contradictory statement of fact itself made the SCN null and void. (vi) The notice demanded differential duty amounting Rs. 24,46,788/- under Section 28(4) of the Customs Act, 1962. In this regard, the appellant submits that the goods were released provisionally under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -match of the goods occurred. The supplier had also forwarded the amended invoice and packing list which were submitted before the department. Thus, it is clear that there was no mala fide intention on their part to import excess goods. Therefore, the goods should not be liable for confiscation. (ix) The importer further submitted that even assuming but not admitting that re-determination of higher value in terms of Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, is sustainable in law, it did not necessarily mean mis-declaration of value. Mis-declaration of value could sustain in law only when there was remittance of extra payment to the overseas supplier. Remittance of extra payment to the overseas supplier had not even been alleged against them and therefore confiscation under Section 111(m) should not sustain in law. They also claimed that enhancement of value cannot be considered as evidence of mis-declaration and hence the goods should not be liable to confiscation under Section 111(m). (x) The SCN at Para 11 proposes to confiscate the entire goods under Section 111(i), (1) & (m) of the Customs Act, 1962. The proposal to confiscate the goods which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 114A comes in the picture. (xvi) Firstly, the subject case was not at all a case of non-levy or short levy of duty/interest. Before provisional release of the goods, excess goods were detected and the higher values of all the goods including the excess goods were estimated by the department itself. Consequently, they have paid the difference of duty or Rs. 7,20,695/- and furnished bank guarantees for Rs. 6,14,827/- Rs. 13,40,963/- and Rs. 5,00,896/-.Thus it is clear that short levy of duty, if any, was properly secured by the department before release of the goods. (xvii) Secondly, the subject demand notice itself is premature as the provisional assessment has not been finalised. (xviii) Thirdly, the subject demand notice has been issued within normal period of one year and there was no need to invoke extended period. Therefore, there was no scope to impose any penalty under Section 114A. (xix) The SCN also proposed penalty under Section 114AA. This Section is applicable when there is no existence of goods but the documents are filed fraudulently to enjoy some benefit, since other provisions for imposing penalty cannot be invoked in such cases. Section 114AA of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantity of the goods imported and under valuation of the goods imported have been established. Accordingly, he justified the enhancement of value as per Rule 5 of the Customs Valuation Rules, 2007. Thus, he submits that the goods are liable for confiscation and both the appellants and the Director of the Appellant-company are liable for penalty. 8.1. In view of the above submissions, the Ld. Authorized Representative of the Revenue supported the impugned order. 9. Heard both sides and perused the appeal records. 10. We find that in the present case, three Bills of Entry were filed by the appellant-company and the declared assessable value of the goods was Rs.12,27,175.67. On 100% examination, the goods were found to be in excess quantity than the quantity declared in the Bills of Entry. The details of the goods which were found upon examination by the SIB Officers in respect of each Bill of Entry is as under: - TABLE 1 SL No Description of the Goods UQC Quantity Declared Quantity Found Excess Quantity 1 Bowl Set (6Pcs/Set) Opal Ware KGs 400 1600 800 2 Adult Buckle Iron KGs 1350 1930.8 580.8 3 Elastic Rope (1.2 MTR.) Doz 3000 4000 1000 4 Bag Access ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plier. The letter dated 22.03.2014 issued by the supplier accepting their mistake cannot absolve the appellant from the mis-declaration and excess quantity of goods found on examination. Had there been no examination, the excess goods could have been cleared without payment of customs duties. In these circumstances, we hold that the mis-declaration of the goods in respect of the three Bills of Entry filed by the appellant is established. Accordingly, we hold that the goods found to be in excess are liable for confiscation. However, from the impugned order we observe that confiscation has been ordered even in respect of the quantity of goods declared in the Bills of Entry, which is not correct. Thus, we hold that the goods found in excess and the undeclared goods alone are liable for confiscation. Accordingly, we uphold the confiscation of the goods found to be in excess than the declared quantities in the bills of Entry and the non declared goods and set aside the confiscation of the goods declared in the bills of entry. 10.4. Regarding confiscation of the goods on account of mis-declaration of value, we observe that the ld. adjudicating authority has adopted the value of similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the price at which Mancozeb has been imported into India by others during 1994 to 2000 is steadily increasing and for this purpose, the following evidence has been cited :- Import by United Phosphorous from China and Lupin Agro Chemicals from Netherlands 1994 Rs. 63.52 per kg. 1999 Rs. 77.93 per kg. 2000 Rs. 78.99 per kg. 15. We agree with the appellants that import of mancozeb from other countries cannot be treated as import of identical goods into India as per the definition of identical goods in Rule 2(c). The cif price in US$ is being compared with the price in Indian rupees. It is, however, to be kept in mind that due to rupee devaluation and increase in exchange rate of US$, the cif price in US$ after conversion into Indian rupees always shows a higher price of the goods. Applying the exchange rate of US$ as mentioned in Ground F of the memo of appeal filed by Bayer of US$ 2.10 i.e. the price at which Bayer has imported the goods, then the price in Indian rupees is as under: Imports from China 1999 Rs. 91.45 2000 Rs. 94.29 Imports from Netherlands Sept. 1997 Rs. 81.40 Dec. 1997 Rs. 89.55 Jan. 1998 Rs. 88.51 Further, the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or in the evidence that the subsequent supplies were not made at the contracted value or that there was a flow back of any additional funds from the importers to the supplier. In other words it can be conclusively held that the transaction value declared was the genuine value and there was no other consideration either direct or indirect received by the supplier. Therefore, once the transaction value cannot be rejected as per Rule 4(1) and Rule 3 the same has to be considered as the value for the purpose of Section 14(1). There is no contradiction between the Rules and the provisions of Section 14(1) as has been brought out by the Apex Court in the case of Bureau Veritas cited supra wherein it has been very clearly held that both Section 14(1) and Rule 4 provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularized in Rule 4(2)." (Emphasis supplied) 10.6. Thus, we hold that the differential duty demanded on account of enhancement of value is not sustainable. Therefore, the transaction value declared by the appellant is fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company. Penalty can be imposed on the Director of an importing company under Section 112(a) of the Customs Act, 1962 only on the charge of abatement of commission / omission of some act which would render the imported goods liable to confiscation under Section 111 of the Customs Act, 1962. However, since there was no proposal for imposing penalty on him under Section 112(a) in the show cause notice, we observe that penalty under Section 112(a) is not imposable on the Director. 11.2. Regarding the penalties imposed on both the appellants under Section 114AA, we observe that the said section is applicable when there is no existence of goods but the documents are filed fraudulently. In this case, the supplier has agreed that the documents issued by him are genuine, Accordingly, we hold that Section 114AA of the Customs Act, 1962 cannot be invoked in the instant case to impose penalty either on the appellant importer or on the Director of the appellant importer. Consequently, we hold that no penalties are imposable on the appellants under Section 114AA ibid., in the facts and circumstances of the case. 12. In view of the above discussions, we pass the following order: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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