Principal Commissioner Vs Wall Street Impex (CESTAT Delhi)
CESTAT Delhi held that as per Rule 4 of the Customs Valuation (Value of Imported goods) 2007, the value shall be the value of contemporaneous imports of identical goods. If such a value is not found, then as per Rule 5, the value shall then be the value of contemporaneous imports of similar goods. Only if neither is available, Rules, 7 can be resorted to.
Facts- The Show Cause Notices were issued by officers of Directorate of Revenue Intelligence. However, learned consultant for the Respondents specifically submitted that he was not pressing on the competence of the officers of DRI to issue the SCN as that issue is pending before the Supreme Court in a Review Petition filed by the Revenue. He prayed that the appeals may be decided on merits.
Officers of DRI received intelligence and suspected that the goods imported by the Respondent importers were mis-declared, undervalued, imported in violation of the restrictions on imports imposed by the Ministry of Electronics and Information Technology and initiated investigations and issued Show Cause Notices.
The importers (Respondents herein) assailed the order of the lower authority before the Commissioner (Appeals) on the Valuation, confiscation and quantum of penalties imposed. Revenue appealed against the order assailing the acceptance of the declared value in some Bills of Entry and non- imposition of penalty on the Customs Brokers. The Commissioner (Appeals) rejected the Revenue’s appeal. He partly allowed the appeal by the importers directing the values to be re-determined on the basis of contemporaneous imports and reducing the fine and penalties.
Revenue filed these appeals before us assailing:
a) acceptance of the declared value in the case of some Bills of Entry; and
b) Directing the lower authority to determine value based on contemporaneous imports instead of upholding the values determined as per the certificate of the Chartered Engineer.
Conclusion- As per Rule 4 the value shall be the value of contemporaneous imports of identical goods and if such a value is not found, then as per Rule 5, the value shall then be the value of contemporaneous imports of similar goods. Only if neither is available, Rules, 7 can be resorted to.
Held that we cannot accept the submission of the Revenue that there were no contemporaneous imports of either identical goods or of similar goods as no evidence has been produced before us, such as, say, a report from the Customs EDI system that the disputed goods including such common goods such as ‘laptop bags’, ‘chargers’, etc. or similar goods were not imported by anyone else except the respondents in these appeals. Therefore, there was no ground to not follow Rules 4 and 5 and directly move to Rule 7 in the factual matrix of this case. The Commissioner (Appeals) was correct in holding that the value should be determined based on contemporaneous imports and for that purpose remanding the matter to the original authority.
FULL TEXT OF THE CESTAT DELHI ORDER
These two appeals have been filed by the Revenue assailing the Orders-in Appeal.
2. Appeal No. 51766 of 2021 is filed to assail Order-in-Appeal dated 23.10.2020 passed in respect of M/s. Wall Street Impex. Cross objections 50232 of 2022 is filed by M/s. Wall Street Impex in this appeal. Appeal No. 50065 of 2021 is filed to assail Order-in-Appeal dated 23.10.2020 passed in respect of M/s. Forever Import and Export Co.
3. In both these cases, the Show Cause Notices were issued by officers of Directorate of Revenue Intelligence1. However, learned consultant for the Respondents specifically submitted that he was not pressing on the competence of the officers of DRI to issue the SCN as that issue is pending before the Supreme Court in a Review Petition filed by the Revenue. He prayed that the appeals may be decided on merits.
4. Officers of DRI received intelligence and suspected that the goods imported by the Respondent importers were mis-declared, undervalued, imported in violation of the restrictions on imports imposed by the Ministry of Electronics and Information Technology2 and initiated investigations and issued Show Cause Notices3 proposing to:
a) reject the declared values of the imported goods under Rules 12 of the Customs Valuation (Value of imported goods) 20074 and re-determine it under Rule 7;
b) confiscate the goods under sections 111(d) and 111(m) for violation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 20075;
c) confiscate the goods under sections 111(d) and 111(m) for importing the goods without obtaining an NOC from Wireless Planning and Coordination wing of MEITY; and
d) impose penalties under section 112(ii) and 114AA of the Act.
5. On the four issues the original authority decided as follows:
a. He accepted the transaction value in some Bills of Entry.
b. In other Bills of Entry, he rejected the transaction value and re-determined it under Rule 7 as proposed in the SCNs based on Chartered Engineer’s certificate.
c. He dropped the charge of violation of IPR Rules and this finding is not assailed before us and therefore, this issue has attained finality;
d. The charge of violation of the restrictions imposed by MEITY rendering the imported goods was upheld and the goods were held to be liable for confiscation under section 111(m) and he allowed their redemption under Section 125 on payment of fine but only for export.
e. He also imposed penalties.
6. The importers (Respondents herein) assailed the order of the lower authority before the Commissioner (Appeals) on the Valuation, confiscation and quantum of penalties imposed. Revenue appealed against the order assailing the acceptance of the declared value in some Bills of Entry and non- imposition of penalty on the Customs Brokers. The Commissioner (Appeals) rejected the Revenue’s appeal. He partly allowed the appeal by the importers directing the values to be re-determined on the basis of contemporaneous imports and reducing the fine and penalties.
7. Revenue filed these appeals before us assailing:
a) acceptance of the declared value in the case of some Bills of Entry; and
b) Directing the lower authority to determine value based on contemporaneous imports instead of upholding the values determined as per the certificate of the Chartered Engineer.
8. According to the Respondent importers, the orders of the Commissioner (Appeals) call for no interference and must be upheld.
9. The questions to be answered by us in these two appeals are:
a) Was the Commissioner (Appeals) correct in upholding the acceptance of the declared assessable value by the Adjudicating authority in respect of some Bills of Entry?
b) Was the Commissioner (Appeals) correct in remanding the matter to the Adjudicating authority in respect of other Bills of Entry with a direction to determine the value based on contemporaneous imports instead of determining it on the basis of the Chartered Engineer’s certificate under Rule 7 ?
10. The Bills of Entry in question in each of the two Appeals are as follows:
Appeal No. 51766 of 2021 of Wall Street Impex
