Aureole Atelier Pvt. Ltd. Vs. Commissioner of Customs (Preventive) (CESTAT Delhi)
Section 14 of the Customs Act provides that for the purpose of valuation the value of imported goods shall be the transaction value of such goods, i.e. to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time of place of importation, or as the case may be for export from India, where the buyer and seller of the goods are not related and price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. It is further provided that rules made in this behalf may provide for the manner and acceptance or rejection of value declared by the importer or exporter, where the proper officer has reason to doubt the truth or accuracy of such value and determine value for the purposes of this Section.
We find that there are no reasons recorded for rejection of transaction value before taking the exercise of revaluation and enhancement of transaction value. In this view of the matter, we find that the impugned order is bad in law and also on facts. Accordingly, we set aside the impugned order setting aside the enhancement of declared value, redemption fine and penalty. The appellant shall be entitled to consequential benefits including refund of differential duty deposited alongwith interest under Section 129EE of the Central Excise Act.
FULL TEXT OF THE CESTAT JUDGEMENT
The issue involved is whether transaction value is rightly rejected of the imported goods.
2. Acting upon a specific intelligence that M/s. Aureole Atelier Pvt.Ltd., 43/15, East Patel Nagar, New Delhi (hereinafter referred to as „the appellant/importer‟) has imported a consignment vide BE No.8131129 dated 10.01.2017 containing Sunglasses of various models, and evaded the applicable duties of Customs by way of undervaluation of imported goods. The consignment was accorded RMS (Risk Management Scheme) status, as such, the consignment was not subjected to usual customs procedure of examination before clearance and the consignment was cleared on 10.01.2017 itself. Since, the consignment was already cleared, a search was conducted at the registered premise of the importer at 43/15, East Patel Nagar, new Delhi. During the search, it was found that the address at which the importer had obtained IEC number was that of a residence and business premises were at Noida. On 12.01.2017, Mr. Deepak (employee) brought samples of each model of sunglass which they imported vide BE No.81311229 dated 10.01.2017. On examination of the samples brought, it was found that the sunglasses were of “PEPE JEANS” brand, a well known global brand and those models of sunglasses are sold on various E-Retail platforms like Flipkart, Snapdeal, Amazon, etc., as “PEPE JEANs” brand sunglasses.
3. A statement of Shri Deepak was recorded under Section 108 of the Customs Act, 1965 wherein, he inter-alia stated that he was working in the capacity of Manager (Logistics), with the importer company. However, on being asked about the value declared by their company in the BE No.8131129 dated 10.01.2017, in respect of the goods imported, he stated that he was not in a position to explain the same as he does not deal with the procurement of goods on behalf of the company. Accordingly, he was handed over summons issued in the name of his company for onward delivery to the management. The summons issued sought appearance of a responsible person of the company on 17.01.2017, who could explain the values declared by the importer company for the purpose of levy of customs goods on the goods imported under the BE No.8131129 dated 10.01.2017.
4. An inventory of the goods imported under BE No.8131129 dated 10.01.2017 was prepared on 16.01.2017, and during the preparation of the inventory, the goods were found to be tallying with the declaration made by the importer in terms of the quantity and description made. However, the goods were detained for further investigation.
5. In compliance to the summons dated 12.01.2017, Shri Vivek Kak, Chief Executive Officer of the importer company appeared before the Superintendent (Preventive) on 17.01.2017. Shri Vivek Kak submitted a copy of the authorisation signed by Smt. Amrita Khurana Sharma, Director of the importer company, authorising Shri Vivek Kak to appear before the Department in relation to the investigation. The statement of Shri Vivek Kak was recorded under Section 108 of the Customs Act, 1965, wherein he, inter alia, stated that he is working in the capacity of Chief Executive Officer of the Company, and he is authorised to appear before any Government Officer/Department in relation to any inquiry related to the company. He went through the copy of Bill of Entry No.8131129 dated 10.01.2017 filed by his company for import of “PEPE JEANS” brand of sunglasses of various models. He also went through the inventory of the goods imported by them under the said Bill of Entry. On being asked, he stated that PEPE JEANS is a brand owned by M/s. Pepe (Spain) and M/s. Mondottica Limited, U.K. is global licensee of M/s. Pepe (Spain), that they have an agreement dated 01.02.2015 with M/s. Mondottica Limited, U.K., for distribution of Pepe brand goods and all other brands dealt by M/s. Mondottica Limited, U.K., from the overseas approved factories with appropriate ISO 9001 accreditation, and with prior approval on any designs confirming production; that the goods imported by them in the current Bills of Entry is as per this agreement. He further stated that they have imported model Nos. PJ7241 CI to C4, PJ7242 CI to C4, PJ 7243 C1 to C4 and PJ 5111 C1 to C4. On being asked, he stated that C1, C2, C3 and C4 are colour codes of the sunglasses in a particular model. On being asked about those models, he stated that those models are manufactured by overseas factories approved by M/s. Mondittica Limited., U.K., and those models are being sold by them through online- retailers like M/s. Flipkart, M/s. Snapdeal, M/s. Amazon etc. On being asked about the prices on which those models are sold online, he stated that the goods are sold by the online retailers, as per their calculations and they get 40% of the value fixed by those retailers on which they give discount as per their policy and demand. Sh. Vivek Kak provided signed copies of the print outs of the online sale made by those retailers and stated that 40% of the price received by them includes the duties of Customs paid by them during the import, and 20% as their profit margin. Further, the amount received by them also includes Rs. 40/- as their outward freight in relation to shipment of each piece. Taking into consideration of the factors stated by Sh. Vivek Kak, import values for the purpose of levy of duties of customs on the models of sunglasses imported by the importer were re-determined, and a chart to this effect was tabulated by Revenue, which is as follows:-
