In a recent case, the Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) upheld the Chinese customs declaration as the assessee failed to produce a cogent document to disprove the allegation of mis declaration in the export declaration.
M/s.Decor Rubber Industries, the appellant, has been importing goods namely unbranded “Reflective Sheets”. Acting on intelligence, the containers covered under the bill of entry filed by the appellant through its Customs Broker M/s. Sajeev Kumar was preliminarily examined. The imported goods were found to be supplied by M/s. Changzhou Hua R Sheng Reflective Materials Co. Ltd., China.
The goods were found to be rolls of branded Reflective Sheets of the brand name “Sablite”. Two types of reflective sheets of series TM3200 AB and TM1800 of 1219 and 5 rolls respectively were found. The value of these goods declared in the Bill of Entry was Rs.15,41,721.53 (USD 32758.58). The examining officer doubted these values as they were too low. The goods were detained and a market survey was done which showed that the price of similar Reflective Sheets was Rs.8,000 per roll and other reflective sheets were priced at Rs.36,000/- to Rs.39,000/- per roll.
During the investigation, it was also found that the appellant had imported the same goods through fourteen other bills of entries in the past declaring similar prices. It was felt that the goods imported under these past Bills of Entry were also undervalued and were, therefore, liable to confiscation.
On investigation overseas, it was found that there was a vast difference between the prices declared in the Bills of Entry before the Indian Customs by the appellant and the values declared by the exporter to the Chinese Customs authorities.
The Values in consignments of goods before the Chinese Customs authorities and the values declared in the Trade Declarations before the Chinese Customs were four times the values declared before the Indian Customs. The department found that the importer undervalued their goods at the time of import to evade payment of customs duties.
It was alleged that the importer-appellant had fraudulently suppressed the correct transaction value of the imported goods by fabricating import documents with the intent to evade payment of appropriate duties of customs.
A show cause notice was issued demanding differential duty under the proviso to section 28(1) of the Act alongwith interest under Sections 28AA and 28AB. The Goods were proposed to be confiscated under section 111 (m) of the Customs Act, 1962. In addition, the penalty was proposed to be imposed on them under sections 112 (a), 112 (b), 114A and 114AA of the Act ibid. The proposals in the SCN were confirmed by the impugned order.
It was found that declarations received from the Chinese authorities for the goods cannot be relied on as none of these bear any signature or stamp. Rejection of transaction value based on such inadmissible documents is liable to be set aside. Also, there is no proper market enquiry. The value has been enhanced and re-assessed based on a single quotation which mentions the retail price of the goods and not the import value.
The export declarations received from China contain all details and the declarations obtained from China Customs are the documents in terms of Section 139(ii). The appellant objected to these declarations being used as evidence but it cannot be denied that the supplier of the appellant would have filed export declarations before China Customs.
It was found that the documents filed with the Chinese authorities are as per their procedures and practices and if the declarations are to be filed online by the exporter with the Chinese authorities, they will be so filed and they cannot be separately stamped and signed and issued to satisfy the appellant.
“In the absence of any other Export Declarations with the appellants is therefore sufficient for us to hold that the appellant has failed to rebut the presumption of correctness attached to these documents in terms of section 139 of the Customs Act.”, the Tribunal viewed.
A two-member bench of Dr Rachna Gupta, Member (Judicial) And Mr P V Subba Rao, Member (Technical) observed that the Appellant has not produced any other cogent document to show that price as was declared to the Chinese Customs was different from the price which is mentioned in the export declaration obtained by the department from China through Consulate General of India The Export Declarations as received from China are, therefore, admissible in the evidence.
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