Whether value can be enhanced on the basis of contemporaneous imports when the quality of goods are different?

PJ/Case law/2013-14/1880

Case:- VEBHAV SYNTHETICS PVT. LTD. VERSUS COMMR. OF CUS. (IMPORT), NHAVA SHEVA

Citation:- 2013 (295) E.L.T. 591 (Tri.- Mumbai)

Brief Facts:-The facts of the case are that the appellant namely M/s. Vebhav Synthetics Pvt. Ltd., imported six consignments during the period October, 2007 to December, 2007 declaring the price of the impugned goods as US $ 1.21 per kg and two consignments in the month of January 2008. The consignments imported till December, 2007 were cleared. M/s. Vebhav Yams Pvt. Ltd., also imported one consignment in October, 2007 showing the same price. The consignment imported by M/s. Vebhav Synthetics Pvt. Ltd. in January, 2008 were detained on a complaint made by Rubber Thread Manufacturers Association on the ground that the value of raw material is much higher than the value of the price shown in the import documents. Therefore, investigation was conducted and a show-cause notice dated 28-11-2008 in the case of M/s. Vebhav Synthetics Pvt. Ltd. and show-cause notice in the case of M/s. Vebhav Yarns Pvt. Ltd. were issued on the charge of undervaluation. The show-cause notices were adjudicated and the values of the imported goods wereenhanced. Therefore, differential duty was demanded, redemption fine almost equivalent to duty was also confirmed against M/s. VSPL and penalty on both the appellants were imposed. The said orders were challenged before the Commissioner (Appeals), who confirmed the orders of the adjudicating authority.

Appellant’s contention:- The appellants submits that the adjudicating authority has relied upon the Bill of Entry of the impugned goods during the period July, 2007 to September, 2007 and one Bill of Entry No. 688631, dated 19-11-2008 to enhance the value. It is further contended that the goods imported by the appellants are of substandard powder coated and not silicon coated. Therefore, the goods are not identical to the goods imported during the period July, 2007 to September, 2007 and the Bill of Entry mentioned herein above on the basis of which enhancement of value is made. He further submitted that the show-cause notice has been issued beyond the period of limitation therefore, the demands are time-barred.

Respondent’s Contention:-The Revenue on the other hand reiterates the finding of the lower authorities.

Reasoning of Judgment:- Considering the contention raised bythe appellant during the course of arguments, the Tribunal finds that the goods are imported by the appellants are powder quoted as per the invoice and we have examined the bills of the goods imported on higher price where the goods are of silicon coated. The Tribunal further examined the price of the goods imported during the period July, 2007 to September, 2007 wherein the price of imported goods similar to the goods in question. the Bill of Entry dated 6-7-2007 is showing that the import has been made at @ US $ 1.21 per kg and other two invoices dated 19-11-2007 showing the price almost Rs. 53/- per kg. The Bill of Entry relied on by the adjudicating authority dated 29-1-2008 cannot be considered as reliable document as import has taken place inOctober, 2007 to October, 2008. In these circumstances, the appellant has been able to show that the quality of goods are different from the goods and value which were relied on by the adjudicating authority for loading of the value. In this case, loading of value is not sustainable as discussed above.

Further, The Tribunal notice that in these cases the show cause notices admittedly have been issued beyond the period of six months and there is no allegation of suppression, concealment of facts, fraud, etc., therefore, the Tribunal hold that the show-cause notices issued to the appellants are barred by limitation.

Thus the appellants succeed on both the issues. Therefore, we setaside the impugned orders and allow the appeals with consequential relief, any. The stay applications are also disposed of in the above terms.

Decision:- Appeal Allowed with consequential relief.

Comment:-The crux of this case is that when assessee isable to show that the quality of goods imported by them are different from the goods which were relied on by the adjudicating authority for loading of the value, loading of value is not sustainable. Further, it is also clear from this case that if the show cause noticeis issued beyond the period of six months and there is no allegation of suppression, concealment of facts, fraud, etc., the show-cause notice is barred by limitation.

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PJ/Case law/2013-14/1880

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