The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that charge on under valuation of imported goods is not valid as department failed to produce Corroborative Evidence.
Junaid Kudia, M/s Plastic Cottage Trading Co and Zaid Kudia, the appellants challenged the order passed by the Commissioner of Customs (Import- II), Mumbai.
In respect of 31 consignments imported through Bombay Port, the adjudicating authority has rejected the declared assessable value of Rs. 2,46,56,053/- and re-determined the same at Rs.16,19,37,406/-; confirmed differential customs duty amounting to Rs.4,04,17,003/- along with interest;. Company”).
The officers of Directorate of Revenue Intelligence (DRI), Regional Unit, Surat found that the appellant company is involved in under- valuation of varieties of bags and other accessories, falling under CTH 39269099, 420222290, 73182990, 83089099, 96081019 etc.
A search was also conducted at the premises of M/s Winsor Enterprises, Mumbai wherein records/ documents/files related to the appellant were found and documents in the form of print outs of emails were recovered. The said emails indicate that the appellant had mis-declared the actual value of the goods before the proper authorities of Customs at the time of seeking clearance.
The officers also recorded statements of Shri Mukhtar Kudia, Shri Junaid Kudia and Shri Zaid Kudia during the course of investigation. After detailed investigation into the matter, a show cause notice was issued to the appellants, proposing demand of Customs duty along with interest and for imposition of penalties on the appellant company and other appellants.
In adjudication, Commissioner of Customs has confirmed the above demands on the appellants.
The appellants submitted that the statements, based on which the adjudication proceedings were initiated, were recorded under pressure by DRI and same were retracted by the concerned person subsequently; that the Department’s case is solely based on some emails recovered from one Mr. Zulfikar, employee of Appellant’s sister concern M/s. Winsor Enterprises and that the appellant’s request for grant of opportunity of cross examination of Mr. Zulfikar, from whose email account these so called second set of invoices were retrieved, has not been allowed.
It was argued that the department has to follow the procedures and norms provided in the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
The adjudicating authority has re-determined the value and confirmed the charges of undervaluation and has proposed redetermination of customs value in terms of Rule 10 (1)€ of the Rule.
A two member bench comprising Me SK Mohanty , (Member Judicial) and Mr M M Parthiban (Member Technical) Observed that “there are no evidences produced by the department that the excess amount over and above the invoice price was paid to suppliers. There is no evidence as to how the Appellant came into possession of cash alleged to be differential amount towards goods imported, nor there is any evidence of any cash being handed over to any person, representing suppliers in India.”
“Since the department had failed to produce corroborative evidences regarding the undervaluation of imported goods, the charge of undervaluation of imported goods in the present matter is not sustainable.”, the CESTAT held.
While allowing the appel, the CESTAT set aside the impugned order confirming the adjudged demands on the appellants.
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