By TIOL News Service

NEW DELHI, FEB 08, 2016: M/s. JMD Oils Pvt. Ltd. imported three consignments of mixed acid oils and two consignments of mixed fatty acid and filed bills of entry by declaring the same as such including declaration of country of origin and the unit price of USD 190 in respect of mixed acid oils and of USD 210 and 205 in respect of mixed fatty acid. The samples were drawn from the said consignment and the goods were found to be palm stearin, palm fatty acid, palm stearin composed of triglycerides of fatty acids (easters), RPO etc. The price declared by the appellant was enhanced by the assessing officer to USD 336.25 in respect of mixed acid oils and to USD 415.5 in respect of mixed fatty acid. The appellant accepted the said enhanced value and cleared the same on payment of duty .

However, subsequently based upon investigation, proceedings were initiated for enhancement of assessable value resulting in passing of impugned order vide which the assessable value of the mixed acid oils as well as mixed fatty acid was enhanced to USD 420.

When the appeal of the importer was heard in July 2013, there was a difference of opinion –

Member (J) held: Based upon the identical investigation conducted by the Revenue initiated against another importer and orders were passed enhancing the declared assessable value, the Tribunal in the case of H.K. International vs. CC New Delhi   (2011-TIOL-2001-CESTAT-DEL) took note of the statement made by Indenting agents and also took note of the fact that importer accepted the enhanced value so as to get release of the goods and to avoid further demurrage charges and held that as there was no valid & legal evidence indicating that the price reflected in invoice was not correct declared transaction value, the same cannot be discarded - The ratio of Tribunal is applicable to the present case also - Appeal allowed.

Contra Member (T):   Palm stearin imported by the appellant was not freely importable without appropriate licence /permission - Appellant has no license to import crude Palm Stearin or facility to split the same into fatty Acids and glycerols - There is also mis-declaration of goods - Without probe and investigation by the DRI and testing by CRCL, mis-declaration would have escaped scrutiny of customs causing huge loss and injury to exchequer - In each container, different types of products in various drums have been found which were entirely different from declared goods - Present case established premeditated and fraudulent design of the appellant to deliberately cause loss to Revenue - Facts of the H.K. International Vs. CC New Delhi-   (2011-TIOL-2001-CESTAT-DEL)  are not at all similar to the present case and accordingly present appeal is bound to be dismissed.

Therefore, the matter came to be referred to the third Member.

The difference of opinion referred was –

1. Whether there was deliberate mis-declaration of description and value of imports proved from investigation result, report of CRCL and various evidence gathered by investigation as well uncontroverted adjudication finings as recorded by Technical Member and adjudication should be upheld?

or

2. Whether merely relying on the decision of tribunal in the case of H.K. International (supra) irrespective of peculiar facts of each case tested on the basis of law, adjudication is to be set aside as recorded by Judicial Member?

We reported this order as 2013-TIOL-1822-CESTAT-DEL.

The matter was heard recently by the third Member on reference viz. Member (Judicial).

The appellant inter alia submitted that the grounds are identical to that contained in the case of H K International and, therefore, the same has to be followed. Furthermore, Member (Technical) had gone beyond the scope of show cause notice to arrive at a finding that the import was contrary to Import Policy which was even not alleged in the show cause notice.

The AR supported the order of Member (Technical).

After extracting the allegations leveled in the impugned case and that made in H K International (supra) , the Member (J) observed –

"33. In this case almost all the allegations are considered by this Tribunal in the case of H K International (supra). Further, the appellant has already stated that the imported goods were not used in the manufacturing of vanaspati ghee in their statement. The appellants have never admitted that they have paid any amount over and above the invoice value although they have admitted that international price of subject goods as 450 USD PMT but the same does not mean that the appellant has imported such goods at such a higher price. Moreover, the price which has been relied by the Revenue is originated from Malaysia whereas some of the consignments were imported from Indonesia. These facts have not been considered by the learned Commissioner. The appellants has described the goods as mixed fatty acid. Therefore, it cannot be said that appellant has intentionally imported palm stearin. Moreover, the investigation was also conducted on the basis of the statements of two indentors, namely Shri Anil Kumar Arora and Shri Rakesh Kumar who were unaware in the context of consignor and the appellant has not imported any goods through there indenters.

34. In these circumstances, I hold that decision of H K International (supra) is squarely applicable to the facts of this case."

Paragraphs 8 & 9 of the decision of the Tribunal in the case of H K International was extracted and it was concluded -

"35. Therefore, relying upon decision of H K International (supra), I am of the view that Hon'ble Member (Judicial) has taken the correct view in deciding the issue holding that as there is no contrary decision indicating that the price reflected in the invoice is not correct transaction value. In these circumstances, charge of under valuation of transaction value is not sustainable. Therefore, I agree with the view taken by the Hon'ble Member (Judicial)."

And, therefore, the Majority order is that the appeals filed by the appellants were allowed.

(See 2016-TIOL-347-CESTAT-DEL)