The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai granted relief to Granite India and held that antecedents cannot be evidence for alleged undervaluation of goods.
The respondent, M/s Granite India imported the segment and saw blank and filed various bills of entry over a period of time and imported segments vide bills of entry 5137834 and 5137862 both dated 09.02.2018. The allegation is that the respondents undervalued the imported goods and the officers of SIIB examined the containers and initiated an investigation and from the premises of Granite India situated in New Delhi were searched and incriminating documents and 2 laptops were seized. The imported goods were ordered to be provisionally assessed on furnishing of bond and bank guarantee of 100 percent of differential duty.
On completion of the investigation the respondents were issued a show cause notice dated 13.03.2019 seeking to confiscate the imported goods; re-determination of the declared value of the goods imported by the respondents from 261,71,24,488/- to 414,03,08,884/- and recovery of differential duty of Rs. 35,36,19,477/- along with interest. Also, the penalty was imposed under Section 112(a) and Section 112(b) of the Customs Act, 1962.
The issue that came before the Tribunal to be decided in the case is, as to whether the allegation of undervaluation against the respondents is substantiated by the evidence that has been put forth by the investigation.
The Bench consisting of S K Mohanty, Judicial Member and P Anjani Kumar, Technical Member observed that “We find that the investigation has not taken in to account the volume of the imports made by the appellant; their relation with the supplier and the discounts offered. The submissions of the appellants were brushed aside stating that the discounts were not reflected in the invoice and that there were inconsistencies in the statements recorded.
Antecedents cannot be evidence for the alleged undervaluation of the goods. At best antecedents may be a reason for creating a suspicion and be a reason for causing an enquiry or Investigation. Mere propensity of the respondent is not enough proof of undervaluation. Therefore, we hold that antecedents of an importer or their propensity to violations cannot be in itself an evidence prove a contravention in a completely different proceedings.”
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