IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH, ALLAHABAD
COURT NO. I
Customs Appeal No.70379 of 2017
Arising out of Order-in-Original No.03/PR.COMMR./NOIDA-CUS/2017, Dated: 28.02.2017
Passed by Principal Commissioner, Customs, Noida
Date of Hearing: 17.05.2019
Date of Decision: 18.06.2019
M/s P G ELECTROPLAST LTD
PRINCIPAL COMMISSIONER OF CUSTOMS
Customs Appeal No.70023 of 2018
Arising out of Order-in-Original No.03/PR.COMMR./NOIDA-CUS/2017, Dated: 28.02.2017
Passed by Principal Commissioner, Customs, Noida
SHRI VISHAL GUPTA
PRINCIPAL COMMISSIONER OF CUSTOMS
Appellant Rep by: Shri K.K. Anand, Adv.
Respondent Rep by: Shri Gyanendra Kumar Tripathi, AR
CORAM: Archana Wadhwa, Member (J)
Anil G Shakkarwar, Member (T)
Cus – The assessee-company imported 14 inch color picture tubes from a Malaysian entity – During the relevant period, the assessee imported various consignments and filed 70 bills of entry – The price of each color picture tube was USD 20.20 on CNF basis and payments were made through bank LCs – The goods were cleared upon payment of Customs duty – Through a subsequent Notfn, Anti Dumping Duty (ADD) was imposed such imports & the specified landed value of the goods in such Notfn was USD 21.77 per piece – Hence ADD was leviable if the value was lower than USD 21.77 – In this regard, the DRI investigated the assessee and searched the factory premises of the assessee and the residence fo the assessee’s CMD, whereupon several documents and electronic devices were seized – Statements of several persons were recorded, wherein it was admitted that the invoices had been over-valued in a bid to avoid payment of ADD – SCN was issued after invoking extended limitation, proposing to raise duty demand for recovery of ADD – It was alleged that the assessee indulged in suppression of facts – The proposals in the SCN were confirmed upon adjudication, along with personal penalties being imposed on the directors in the firm – Hence the present appeal.
Held – It is seen that the Adjudicating Authority denied cross examination of the persons whose statements were relied upon for issuing SCN – The Adjudicating authority also held that the most clinching part of the investigation is the admission made by the second appellant herein, in his volunatry statements recorded u/s 108 of the Customs Act – It was admitted that his company over-valued the price of the color picture tubes to avoid payment of ADD – From the O-i-O, it is inferred that the Revenue had no evidence to corroborate the voluntary statements – It is settled principle of law that the assessment of bill of entry is an adjudication order and if within the period provided under the Customs Act, appeal is not filed before the Commr.(A), then the assessment attains finality & such final assessment cannot be re-opened – Besides, the assessee pertained to between May 2010 to January 2011 and attained finality after lapse of the appeal period – Hence the SCN issued in May 2015 cannot seek to re-open such assessment – Moreover, all the information was provided by the assessee during the assessment period & so the allegation of suppression of facts is unsustainable – Hence the proceedings are hit by limitation – The O-i-O is not sustainable either or merits or on limitation: CESTAT
Appeals allowed/In favor of appellant
Case laws cited:
M/s Priya Blue Industries Ltd. V/s Commissioner of Customs (Preventive) – 2004-TIOL-78-SC-CUS… Para 5
C.C.E. & S.T., Noida V/s Sanjivani Non-Ferrous Trading Pvt. Ltd – 2018-TIOL-447-SC-CUS… Para 5
FINAL ORDER NOS. 71124-71125/2019
Per: Anil G Shakkarwar:
Above stated two appeals are taken together for decision since both of them are arising out of common impugned Order-In-Original No. 03/PR.COMMR./NOIDA-CUS/2017 dated 28 February, 2017 passed by Principal Commissioner of Customs, Noida.
2. Brief facts of the case are that the appellants imported 14 inch color picture tubes from M/s Chunghwa, Malaysia. During the period from May 2010 to January 2011, appellant imported various consignment of 14 inches colour picture tube and filed 70 Bills of Entry. The price of each colour picture tube was US$20.20 on CNF basis and the payments were made through Bank LCs. The goods were assessed for customs duty and on payment of customs duty the goods were cleared during the period from May 2010 to January 2011. Directorate of Revenue Intelligence detected a case of evasion of anti dumping duty by a firm namely M/s J.R. International related to import of colour picture tubes from M/s Chunghwa Picture Tubes, Malaysia. Through Notification No.50/2009-Customs dated 15 May, 2009 w.e.f. 24 July, 2008 anti dumping duty was imposed on import of colour picture tubes from M/s M/s Chunghwa Picture Tubes, Malaysia. The specified landed value for 14 inch colour picture tube in the said Notification No.50/2009-Cus was US$ 21.77 per piece. If the landed value of imported 14 inch colour picture tube imported from M/s M/s Chunghwa Picture Tubes, Malaysia was more than US$21.77 per piece then anti dumping duty on the same was not leviable. However if the landed value of such goods was less than US$ 21.77 per piece then anti dumping duty was leviable. Therefore, Directorate of Revenue Intelligence carried out investigations in respect of various importers who imported colour picture tubes from M/s Chunghwa Picture Tubes, Malaysia. Accordingly, they carried out investigations in respect of the present appellant.
3. On 08 March, 2011 Directorate of Revenue Intelligence carried out searches at the factory premises of appellant as well as at residential premises of CMD of the appellant company and seized a number of documents as well as electronic devices. During the course of investigation five statements of Shri Vishal Gupta S/o Shri Pramod Gupta and director of the appellant company was recorded on 08 March, 2011 , 09 March, 2011, 7 April, 2011, 19 September, 2011 & 05 October, 2012 were recorded. Shri Vishal Gupta deposed that they imported 14 inches colour picture tubes from M/s Chunghwa Picture Tubes, Malaysia at US$ 20.20 on CNF basis per peace and the period of payment ranged between three to five months. He has also stated that over-valuation in the invoices was done by M/s Chunghwa Picture Tubes, Malaysia on their instructions to avoid payment of anti dumping. On the basis of information in respect of total quantity of 14 inches colour picture tubes imported by appellant a show cause notice dated 29 May, 2015 was issued by invoking extended period of limitation by raising a demand by invoking extended period of limitation under Section 28 of the Customs Act, 1962 for recovery of anti dumping duty amounting to Rs.7.38 crore in terms of said Notification No.50/2009-Customs. It was alleged that there was suppression of facts by the appellant. Further it was stated in the said show cause notice that one M/s J.R. International were importing fabric and undervalued the same for evasion of customs duty and the difference between the actual price and price indicated in invoice was received by overseas M/s Tessuti (HK) Co. Ltd., Hong Kong through hawala channel and such payments were made to M/s Tessuti (HK) Co. Ltd. by M/s Chunghwa, Malaysia, from whom M/s J. R. International imported colour picture tubes by overvaluing to avoid imposition of anti dumping duty. It was stated by proprietor of M/s Tessuti (HK) Co. Ltd., Hong Kong that M/s Tessuti (HK) Co. Ltd., Hong Kong had entered into an agreement with M/s Chunghwa, Malaysia wherein M/s M/s Chunghwa, Malaysia was to pay commission at the rate of US$ 3.40/piece of colour picture tube to M/s Tessuti (HK) Co. Ltd., Honk Kong by raising a debit note in favour of M/s M/s Chunghwa, Malaysia on the basis of said investigation. The basis of allegation in the said show cause notice as recorded at Para 8.7 & 8.8 are reproduced below:-
8.7. From the admissions made by Shri Vishal Gupta, Director of M/s P G Electroplast in his voluntary statements recorded under Section 108 of the Customs Act, 1962 that M/s P G Electroplast overvalued the price of CPTs to avoid payment of anti-dumping duty. The differential amount was adjusted by various means including debit notes, opening of LCs of longer period of upto 120 days etc. From the statements recorded during investigations, it is evident that the actual price of 14″ CPT imported from M/s.Chunghwa Picture Tubes, Malaysia can be taken as US$ 15.8. The modus-operandi of overvaluation in the import of 14″ CPTs has also been revealed by the statements of Shri Vishal Gupta and others. The statements recorded under Section 108 of the Customs Act, 1962 are admissible in the proceedings under the Customs Act, 1962. The fact of overvaluation have been further and independently corroborated by the statements of Shri Sandeep Devgun, commission agent/representative of M/s.Chunghwa Piture Tubes, Malaysia wherein he (i.e.Shri Devgun) also disclosed the actual price of CPTs supplied by M/s.Chungwa Picture Tubes, Malaysia. The disclosures made by Shri Umesh Gulhar, Proprietor of M/s.Tessuti (HK) Co.Ltd., Hong Kong about the arrangement amongst M/s.Chunghwa Picture Tubes, Malaysia, M/s.Tessuti (HK) Co.Ltd., Hong Kong and M/s.J.R. International, Delhi further enhances the veracity of the statements made by the importer.
8.8 From the foregoing facts, it appears that the values of the 14″ CPTs imported and cleared by M/s.P G Electroplast declared in the 70 bills of entry (details in Annexures-‘A’) at the time of import into India, were not the correct transaction values and the same cannot be accepted and appear 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. The declared values cannot be treated as genuine, as admissible have been made by Shri Vishal Gupta and other, about the correct value of 14″ CPTs and how the same was inflated by adopting ingenious means to avoid payment of anti-dumping duty. The facts of overvaluation of CPTs imported from M/s.Chunghwa Picture Tubes, Malaysia have been further corroborated by statements of Shri Dundeep Devgun, representative/commission agent of M/s.Chunghwa Picture Tubes, Malaysia in India and Shri Vinay Agarwal & Shri Umesh Gulhar. Declared values are acceptable only if they are the sole consideration for sale and correctly reflective and price payable.
4. Appellant had sought for cross-examination of persons on whose statement reliance was placed in the said show cause notice. The same was denied by learned Original Authority. The appellant contended before the Original Authority that their case of import had nothing to do with evasion of anti dumping duty by M/s J.R. International and that modus operandi adopted by M/s J.R. International has no relevance in case of import by the appellant and that the imports by M/s J.R. International were made in the year 2009 and the previous period whereas the imports made by the appellant were from May 2010 onwards and anti dumping duty was imposed w.e.f. 24 July, 2008. It was contended before the Original Authority that appellant imported best quality picture tube available for the overseas market and allegation of overvaluation in the import coloured picture tube from M/s Chunghwa, Malaysia were leveled without having produced any evidence of contemporaneous price of similar or identical goods and therefore, whole basis of rejection of transaction value at the threshold was bad in law and unsustainable. They further contended that no evidence existed for any incriminating evidence for total amount of over invoiced amount from any source and no incrimination documents were recovered during the search of the premises and no other documents relating to any elicit receipt was recovered during the course of search. They further contended that the statement on the basis of which allegation of overvaluation stand made have not been corroborated by any fact or any other evidence. They further contended that it is settled position of law that statement is not sufficient to reject transaction value. The said show cause notice was adjudicated through impugned Order-In-Original through which the Original Authority rejected the assessable value declared in the 70 Bills of Entry and under Rule 12 of Customs (Determination of Value of Imported Goods) Rules, 2007 reduced the value from around Rs.34.30 crore to around Rs.27.01 crore and confiscated the goods and gave an option to redeem the same on payment of redemption fine of Rs.5 crore. Further he confirmed anti dumping duty amounting to Rs.7,38,54,123/- under the provisions of Section 28 of Customs Act, 1962 and ordered to pay the same and imposed equal penalty. Further he imposed penalty of Rs.1 crore on the other appellant. Aggrieved by the said order both the appellants are before this Tribunal.
5. We have heard learned advocate Shri K.K. Aanand appearing on behalf of both the appellants. He has submitted that the goods imported during the relevant time from May 2010 to January 2011 through 70 Bills of Entry were assessed to duty and assessing officers did not find a case to impose anti dumping duty in view of the fact that landed value was more than the threshold value required for the imposition of anti dumping duty. The assessments were finalized as long back as May 2010 to January 2011 and Revenue had not filed any appeal against the said assessment and after completing of appeal period assessment became final and therefore reassessment by way of present proceedings was not available to Revenue and they have relied on ruling by Hon’ble Supreme Court in the case of M/s Priya Blue Industries Ltd. V/s Commissioner of Customs (Preventive) reported at 2004 (172) E.L.T. 145 (S.C.) = 2004-TIOL-78-SC-CUS . They have further submitted that all the information required for assessment was submitted during the relevant period from May, 2010 to January 2011 and therefore the allegation of suppression leveled on 29 May, 2015 are not sustainable. Further the entire demand in the show cause notice is beyond the normal period of limitation and in the absence of any suppression extended period is not invokable and since the entire demand is for extended period the demand is not sustainable. He has further submitted that during the investigation no evidence has come to notice that there was any arrangement of overvalued differential amount to be flow back to the importer. The allegation in show cause notice was for overvaluation and show cause notice made a reference to an agreement between M/s Tessuti (HK) Co. Ltd. Hong Kong and M/s Chunghwa, Malaysia for issue of debit note in the case of M/s J.R. International whereas no such evidence was found in respect of present appellant. He has submitted that the entire show cause notice is based on statements of Shri Vishal Gupta recorded over a period of time from 08 March, 2011 to 05 October, 2012 and in reply to show cause notice all the said statement were denied by the appellant. He has further relied on ruling by Hon’ble Supreme Court in the case of C.C.E. & S.T., Noida V/s Sanjivani Non-Ferrous Trading Pvt. Ltd. reported at 2019 (365) E.L.T. 3 (S.C.) = 2018-TIOL-447-SC-CUS and submitted that as held by Hon’ble Supreme Court that Adjudicating Authority is bound to accept price actually paid as transaction value and submitted that without any evidence the transaction value has been rejected by resorting to Rule 12 of said valuation Rules, 2007 whereas the said Rules require to proceed sequentially and no such exercise was done.
6. Heard Shri Gyanendra Kumar Tripathi learned Deputy Commissioner on behalf of the Revenue he has retreated the findings of the Original Authority.
7. We have carefully gone through the record of the case and submissions made by both the sides. From the perusal of the impugned Order-In-Original, we note that Original Authority has denied cross-examination of the persons whose statements were relied upon for issuance of said show cause notice dated 29 May, 2015. Further we note that at Para 7.3.18 the learned Original Authority has held that the most clinching part of the investigation is the admission made by Shri Vishal Gupta, Director of M/s P G Electroplast in his voluntary statements recorded under Section 108 of the Customs Act, 1962 that M/s P G Electroplast, overvalued the price of colour picture tubes to avoid payment of anti dumping duty. From the said part of the impugned order we note that Revenue did not have any evidence to corroborate with the voluntary statements. We note that it is settled principal of law that the assessment of Bill of Entry is an adjudication order and if within the period provided under customs act appeal before Jurisdictional Commissioner (Appeals) is not filed then the assessment becomes final and such final assessment cannot be reopened. In the present case the assessment were made during the period from May 2010 to January 2011 and after the appeal period of around three months were over the said assessment became final and therefore through the said show cause notice dated 29 May, 2015 the said assessments were not open for reassessment. Further we note that the assessment were finalized during May 2010 to January 2011 and all the information required for assessment was provided by the appellant and therefore the allegation of suppression of fact made on 29 May, 2015 are not sustainable. Therefore, the proceedings are hit by limitation. We therefore hold that the impugned order is neither sustainable on merits nor sustainable on point of limitation. We, therefore, set aside the impugned order and allow both the appeals.
(Order Pronounced in the open Court on 18.06.2019)