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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal Quotations cannot be the basis for re-determining the value of goods MANU/CE/0007/2020 - (09 Jan 2020) </td> </tr> <tr> <td align="left" valign="top">H.S. Chadha and Ors. Vs. Commissioner of Customs (Preventive)</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">The issue in present appeals being common - undervaluation of tyres imported by the Appellant company is for trade and further the companies are under same management. Under common investigation against both the Appellant Companies - Indo Silicon Electronics Pvt. Ltd. and Vortex Industries Pvt. Ltd. and the common managing director namely Shri H S Chadha revenue alleged undervaluation and rejected the transaction value. Thereafter, revenue determined the valuation and have demanded differential duty along with order of confiscation and penalty. In both the cases, penalty has also been imposed on Shri H S Chadha, who is also in appeal before the tribunal in both the cases. 
Assailing the impugned orders, the Appellants states that, the impugned order has been passed in a mechanical manner without appreciating that the prices as reflected in the emails are only quotations and not the final price and thus cannot be relied for value enhancement of the goods. 
Tyres are not prohibited item under Exim policy, and can be imported freely. Further, as the tyres are generally required all over the country there are several importers of identical/similar goods. It is trite law that, since the goods were assessed by proper officer based on transaction value, onus lies on the Revenue to prove undervaluation, which it has failed miserably to do so. There is no allegation or finding that the buyer and seller being related or of any extra payment to the supplier beyond the normal authorized banking channels and thus, undervaluation is not established. 
There is no mention regarding which Rule of the Customs Valuation Rules, 2007 has been applied to arrive at the re-determined value and there is also no sequential application of Rules. It is trite law that, there has to be sequential application of rules to re-determine the value as has been held by the Hon'ble Apex Court in Eicher Tractors Pvt. Ltd. vs Commissioner of Customs Mumbai. Merely based on some emails, the transaction value cannot be disputed and negated without any cogent material. 
Further, no copy of the emails on which the Department seeks to rely has been made as RUDs. Emails and other electronic evidence cannot be relied upon to prove undervaluation in absence of compliance of provisions of Section 138C of the Act. It is trite law that statements can be relied upon only if they are voluntary and true. It can be seen from above that all the statements of the Director Shri H S Chadha recorded are conflicting. Tyres are regularly imported all over the country and therefore the Department could have easily garnered evidence of contemporaneous imports which it admittedly did not do. Otherwise also, Mr. Chadha has not been examined by the Adjudication Authority before placing reliance on his statements, which was mandatorily required to be observed in compliance of Section 139 of the Customs Act. It is also trite law that quotations cannot be the basis for re-determining the value of goods as held Ld. CESTAT in Nava Durga Enterprises vs Commissioner of Customs (Sea Import). Thus, the allegation of undervaluation is not proved. 
In the impugned order passed against the Appellant M/s. Vortex Rubber Industries Pvt. Ltd. denying exemption from SAD on Wanli brand goods detained at godown and those imported by Bill of Entry cannot be sustained as it was nowhere proposed in the SCN. The RSP stickers which were not found on some goods in the godown was much after their clearance from ICD and the Department has not shown that, the RSP stickers were not there at the time of clearance. The appeals are allowed with consequential benefits and any amount appropriated by the impugned orders stands revoked.</td> </tr> <tr> <td align="left" valign="top" >Relevant : Nava Durga Enterprises vs. Commr. of Cus. (Sea-Import) <manuid>MANU/CC/0079/2013</manuid>; M/s. Eicher Tractors Ltd., Haryana vs. Commissioner of Customs, Mumbai <manuid>MANU/SC/0699/2000</manuid></td> </tr> <tr> <td align="left" valign="top" >Tags : Demand, Differential duty, Validity</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>