Sunny Sales Vs Commissioner of Customs (Port) (CESTAT Kolkata)
Conclusion: Penalty imposed under Section 114AA of the Customs Act was quashed as declared value in bills of entry could not be rejected relying on proforma invoice and demands could not be raised without challenging the assessment orders.
Held: Assessee had have imported 129 consignments of Sewing Machinery and parts of various brands through Kolkata port and one consignment of sewing machinery at ICD Tughlakabad, between the years 2012 and 2014. All the Bills of Entry were assessed/ reassessed to duty by accepting the transaction value declared by assessee in the respective Bills of Entry. During a search in the premises of assessee, the officers of Directorate of Revenue Intelligence (DRI), seized the import documents relating to the 130 consignments. After initial verification of the documents, DRI, transferred the documents to DRI, Kolkata for further investigation at their end in the year 2015. On completion of the investigation, a Show Cause Notice was issued to assessee proposing to reject the transaction value declared by them in all the 130 Bills of Entry and demanded differential customs duty. Notice also proposed to demand interest and impose penalty under Section112(a) and (b) and Section 114AA of the Customs Act, 1962. Notice was adjudicated , wherein Commissioner had confirmed the demand of customs duty of Rs.2,57,27,920/- along with interest and ordered for confiscation of the goods imported and imposed equal amount of duty as penalty on assessee-company. A penalty of Rs. 50,00,000/- had also been imposed on Partner of the assesse-company, under Section 114AA of the Customs Act. Assessee submitted that the initial investigation was conducted by DRI, Bangalore and they could not find any undervaluation; subsequently, when the case was transferred to DRI, Kolkata, they started fresh investigation; DRI Kolkata presented two documents: one was a mail allegedly found with one Mr. Mahesh Agarwal at Bangalore and another was a proforma invoice in the name of Jaiswal Trading Company. It was held that declared value in the Bills of Entry could not be rejected on the basis of some details mentioned in the Proforma Invoice and documents attached with the said email. Following the decision in the case of Rumen Dey vs. Commissioner 386 ELT page 894 (KOL) wherein it was held that the impugned order passed demanding differential duty without challenging the original assessment of the Bills of entry was not sustainable. 7.1. Thus, relying on the decision of the Hon’ble Apex Court, the impugned order was legally not sustainable. Accordingly, the demands of duty, interest and penalties confirmed in the impugned order were not sustainable. Regarding the penalty imposed on Shri Sanjay Mehta, Partner of assessee-company, the ingredients required for imposing penalty on him under Section 114AA of the Customs Act were not existing in this case. Assessment Orders had not been challenged and hence they became final. Demand could not be raised without challenging the assessment orders.
