Case Law Details
Rubal International Vs Commissioner of Customs (ICD, TKD) (CESTAT Delhi)
I find that only few goods were found to be mismatch with the invoice and packing list. I further find that the appellant had given cogent explanation based on the statement and clarification of the shipper, via E-mail, clarifying that due to a large variety of goods being small in nature there occurred error at the time of packing of the goods, resulting in some mismatch and finding of few undeclared goods which is not deliberate. I find that the shipper had also offered to take back the undeclared goods as per the shipping documents. Thus, I find that there is no case of any deliberate mis-declaration on the part of the appellant (importer) who had filed the Bill of Entry declaring the goods under import as per the invoice and packing list. Accordingly, I set aside the allegation of mis-declaration.
FULL TEXT OF THE CESTAT DELHI ORDER
M/s Rubal International, 50, Amrit Building, G.T. Road, Miller Ganj, Ludhiana (Having IEC No. 3014015326) (Hereinafter referred to as the Appellant) filed bill of entry No. 6553297 dated 30.08.2016 (container no. NKYU 4873434) for clearance of (i) glass flower vase, (ii) photo frame, (iii) wall clock, (iv) paper roll (for hair curling), (v) iron, (vi) stand clamp, (vii) eaves ball plastic, (viii) grass mat, (ix) wax and (x) baby wipes etc. The declared value was Rs. 10,89,995/-. Accordingly duty was paid as assessed of Rs. 2,77,380/- in cash and Rs. 422 through licence.
2. It is the case of the department that the goods were initially examined by the officers of Import Shed and found that some undeclared items such as (i) Caimei Extra Care Styling Gel and (ii) Enzo brand Having a Type Moving etc. which require “No Objection Certificate” from the Assistant Drug Controller (ADC). As per the department, the matter was subsequently referred to SIIB and goods were examined 100% by the officers of SIIB. It is the case of the department that the items mentioned in the said Table 02 from S. No. 1 to 6 require NOC from the Assistant Drug Controller as they fall under the category of ‘cosmetics’ and require pre-registration with the Assistant Drug Controller under Drugs & Cosmetics Act, 1940 and other Allied Rules made thereunder, but the appellant was not having the said certificate/registration with ADC.
3. It is the case of the department that in order to ascertain the assessable value, during the examination proceeding, market enquiry was conducted on 22.11.2016. On the basis of the said market enquiry, value of items mentioned in S. No. 1 to 6 requiring NOC from Additional Drug Controller, value has been ascertained at Rs. 52,57,183/- and other items has been re-determined as Rs. 22,65,922/-. Accordingly, duty has been re-determined in respect of items mentioned from S. NO. 1 to 6 as Rs. 21,24,264/- and duty in respect of other items has been re-determined to the tune of Rs. 7,03,676/-.
4. The market enquiry was conducted on 22/11/2016 and average wholesale prices were computed on the basis of market enquiry, the imported goods were revalued rejecting the declared value. As regards the six items for which NOC was required from the ADC the goods were revalued at Rs. 52,57,183/- and the duty was determined at Rs. 21,24,264/-. As regards the other goods, the value was determined at Rs. 22,55,922/- and the duty was re-determined at Rs. 7,03,676/-. The statement of the importer was recorded who inter-alia stated that the excess quantity of goods were inadvertently shipped by the supplier from China and that was the reason such goods were neither mentioned in the import documents nor could be declared in the Bill of Entry. However, he admitted the responsibility of mis-declaration. He further stated that he cannot produce any evidence in the form of E-mail/fax/What’s App or any other evidence of placing order on the foreign supplier. He further stated that he is not registered with any Drug or Cosmetic Controlling Authority nor shall be able to produce the required NOC from them and thus he relinquishes his title/claim on the 6 items requiring NOC from the ADC for clearance. He further stated that he was not aware that calculators attract anti-dumping duty. He agrees to pay the antidumping duty on calculators. Further stated that one 55 inch TV has been imported for his personal use and he was not aware of the requirement of BIS certification for the same. He also stated that the market enquiry was conducted in his presence by the officers of SIIB and further stated that he accepts the market enquiry findings and also accepts the revised assessable value and the re-determined duty. Further stated that he shall pay the differential duty for release of the goods. He further stated that the matter may be decided without issue of any show cause notice or any personal hearing.
5. In view of aforementioned premises it appeared to revenue as follows: –
“(i) The declared assessable value of Rs. 10,89,995/- in respect of the goods covered under Bill of Entry NO. 6553297 dated 30.08.2016 appears liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with section 14 of the Customs Act, 1962 and requires to be re-determined under Rule 7 of the Customs Valuation (Determination of Value of the imported goods) Rules, 2007 as Rs. 75,23,105/-(including the assessable value of Rs. 52,57,183/-of Cosmetics) on the basis of market enquiry conducted in the matter as detailed above, which was accepted by the importer in his voluntary statement dated 28.11.2016 recorded under Section 108 of the Customs Act, 1962.
(ii) the goods, i.e. cosmetics (as mentioned in Sr. No. 1 to 6 above) having re-determined value of Rs. 52,57,183/- appear liable for confiscation under Section 111(d) read with section (l) of the Customs Act, 1962 as the importer is neither registered with CDSCO (Central Drugs Standard Control Organisation) nor would he be able to produce any no objection certificate from Assistant Drug Controller (ADC);
(iii) the remaining goods as mentioned in Sr. No. 7 to 47 having redetermined value of Rs. 22,65,922/- appear liable for confiscation under Section 111 (m) of the Customs Act, 1962.
(iv) the goods (sr. No. 7 to 47) have been imported by mis-declaring the value thereof with an intent to evade payment of applicable customs duty. Therefore, the total duty worked out on these goods is Rs. 7,03,676/- and differential customs duty amounting to Rs. 4,25,873/-(after adjusting duty already paid i.e. Rs. 2,77,803/-) is liable to be under Section 125(1) of the Customs Act, 1962.
(v) Shri Joginder Singh, Proprietor of M/s Rubal International has admitted his responsibility of mis-declaration and undervaluation and has indulged in suppression and mis-statement of facts and is thus liable for penalty under Section 112(a) of the Customs Act, 1962.
6. Accordingly, the Adjudicating Authority proceeded to adjudicate the Bill of Entry without issue of show cause notice and personal hearing. It is mentioned that the Importer was orally informed about the grounds on which the case was booked against him. Vide Order-in-Original dated 30th January 2017 passed by the Additional Commissioner of Customs, ICD TKD, the Bill of Entry was adjudicated rejecting the declared value and revaluing the goods as aforementioned. The goods mentioned at Sr. No. 1 to 6 of table 4 which fell under the category of cosmetics requiring NOC from the ADC valued at Rs. 52,57,183/- were absolutely confiscated under Section 111(d) of the Act.
7. Remaining goods as per the Serial No. 7 to 48 of the table having re-determined value at 22,65,922/- were confiscated under Section 111(m) of the Act with option to redeem on payment of fine Rs. 8,80,000/-. Further penalty of Rs. 7,50,000/- was imposed on the proprietor of Rubal International-Shri Joginder Singh under Section 112(a) of the Act.
8. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) inter alia on the grounds that the Adjudicating Authority have erred in observing that the appellant had intention to evade customs duty under the mis-declared goods. The appellant had to waive the show cause notice and personal hearing in order to get the goods released at the earliest to save the mounting loss due to demurrage and detention charges and have reposed faith on the Adjudicating Authority for justice. But the Adjudicating Authority have arbitrarily enhanced the declared value contrary to the settled position of law and ignoring the facts on record. The enhanced value as determined by Revenue is totally arbitrary and contrary to the provisions of the Valuation Rules, itself. The goods imported by the appellant were not rare items but are items of regular import and are frequently imported. Thus, the contention of the Department that no import data was available is surprising and untenable. Further, the Adjudicating Authority have not mentioned any effort made for finding data relating to contemporaneous import. It is settled law that the rejection of transaction value and enhancement of assessable value should be based on some cogent evidence and further the value should be re-determined in accordance with the rules of valuation. The allegation of under valuation is made arbitrarily and the declared value rejected, without resorting to the provision of Section 14 r/w the rules thereunder. Further, the Adjudicating Authority failed to appreciate that the acceptance for the re-determination of value by the appellant was only to minimise the demurrage and detention charges and to get the goods cleared, so as to minimise the financial loss. Such admission under pressure and undue influence does not tantamount for admission of revaluation by way of free will and consent. It was further urged that the order of confiscation and imposing the redemption fine is bad. Redemption fine is required to be determined with respect to the profit margin. The Adjudicating Authority also failed to appreciate that as the import consignment consist of various small items, thus there is likely to be error at the time of packing and forwarding at the end of the supplier, and there was some mix and mismatch in the goods packed and dispatched with respect to the invoice and other shipping documents. The concerned supplier had also tendered apology via E-mail for the inconvenience caused to the appellant, and requested to ship back the goods which were not ordered by the appellant. Thus, there was no deliberate attempt on the part of the appellant to mis-declare the goods, which happened due to mistake in packing at the end of the supplier.
9. It was further urged that penalty under Section 112(a) is not attracted in the facts and circumstances, there being no deliberate mis-declaration or under valuation on the part of the appellant
10. However, the Commissioner (Appeals) was pleased to reject the appeal upholding the Order-in Original.
11. Being aggrieved, the appellant is before this Tribunal. The learned Counsel for the Appellant Mr. G.K. Sarkar appearing with Mr. Deepak Mahajan inter-alia urges that the court below have failed to appreciate the facts and circumstances as well as the grounds urged and have arbitrarily rejected the Appeal.
12. The appellant have given a cogent explanation before the court below soon after the examination of the goods based on the E-mail received from the supplier, wherein the supplier had admitted that due to the small and miscellaneous items, being large in number, there appeared to be inadvertent error at their end at the time of packing of the goods, as per invoice. Such statement of the supplier was not found untrue and has been arbitrarily rejected. The supplier also mentioned in his E-mail that the goods which were found undeclared and not as per the order can be returned to them by shipping back. That the cogent explanation given by the appellant have been arbitrarily rejected, thus drawing erroneous conclusion of mis-declaration.
13. So far the 6 items at Sr. No. 1 to 6 of the table being cosmetics requiring NOC from the Additional Drug Controller, as the appellant was not having the necessary registration with the Drug Authority and was not in the position to obtain the NOC, had relinquished title to the said goods, thus the order of confiscation and penalty is bad with respect to these items.
14. It is further urged that Section 14 of the Customs Act provides that the value of imported goods shall be the transaction value of the goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case maybe, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the same, subject to such other conditions as may be specified in the rules made in this behalf. It is further urged that the court below have erred in rejecting the transaction value without recording any reasons for rejection of the same. Further, it is not the case of Revenue that the appellant (importer) have paid any amount over and above the invoice value of the goods. Further, the appellant have declared the proper transaction value of the goods in the Bill of Entry. Further, once the declared value is rejected in accordance with law, then the Adjudicating Authority is required to proceed sequentially for determining the value. Admittedly, in the facts of the present case, the Adjudicating Authority have not proceeded sequentially and have arbitrarily jumped to the procedure of market enquiry, which is only against the provisions of law. Thus, the enhancement in the declared value is fit to be set-aside.
15. It is further urged that the so-called consent to the arbitrary value adopted by Revenue for revaluation, was consented to by the appellant being under extreme pressure to get the goods released at the earliest. Admittedly, the Bill of Entry was filed on 30th August 2016, and thereafter, the alleged market enquiry is stated to be done on 20th or 22nd November 2016. Thus, the appellant was already suffering heavy damages and detention charges as the goods were still lying at the port in the container. Such consent given to the arbitrary valuation made by the Customs Officer is no consent, as the same is not freely given as required under the provisions of the Indian Contract Act. Accordingly, it is urged that the so-called market survey is fit to be rejected and the declared value accepted.
16. It is further urged that in spite of the so-called consent given by the appellant, the Bill of Entry have been adjudicated vide Order-in-Original dated 30th January 2017. Thus, the appellant have suffered detention and demurrage charges for about 5 months due to arbitrariness on the part of the Department.
17. Accordingly the learned Counsel prays for allowing the Appeal with consequential benefits.
18. The Learned Authorised Representative for Revenue Mr. Mahesh Bhardwaj relies on the impugned order.
19. Having considered the rival contentions, I find that only few goods were found to be mismatch with the invoice and packing list. I further find that the appellant had given cogent explanation based on the statement and clarification of the shipper, via E-mail, clarifying that due to a large variety of goods being small in nature there occurred error at the time of packing of the goods, resulting in some mismatch and finding of few undeclared goods which is not deliberate. I find that the shipper had also offered to take back the undeclared goods as per the shipping documents. Thus, I find that there is no case of any deliberate mis-declaration on the part of the appellant (importer) who had filed the Bill of Entry declaring the goods under import as per the invoice and packing list. Accordingly, I set aside the allegation of mis-declaration.
20. So far rejection of declared value is concerned, I find that the court below have rejected the transaction value against the provisions of law without complying with the condition precedent for rejection. Further, I find that the revaluation have been resorted to without following the due process of law. Accordingly, I set aside the rejection of transaction value as well as the revaluation of the goods done. Thus, the declared value as per the Bill of Entry is accepted.
21. In view of my findings hereinabove, I confirm the absolute confiscation of the 6 items (Sr. No. 1 to 6), which have been abandoned by the importer by relinquishing the title.
22. So far, the other goods are concerned (Serial No. 7 to 48) I set aside the order of confiscation as well as the redemption fine imposed.
23. In view of my findings, I set aside the penalty imposed on the proprietor Shri Joginder Singh under Section 112(a) of the Act.
24. Thus, the Appeal is allowed. The impugned order is set aside. The appellant is entitled to consequential benefits in accordance with law.
(Order pronounced in the open court on 17.03.2022)
