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Cus - Agreement for evidencing High Sea Sale is not genuine as same could not have been signed on 23/12/2011 on a stamp paper, which was admittedly purchased on 29/12/2011: CESTAT

By TIOLNews Service

NEW DELHI , OCT 05, 2017: M/s Bhushan Steel Ltd. filed bill of entry for the goods imported on the ground that they have purchased the same on High Sea Sale basis from M/s ABB Ltd .

Proceedings were initiated against both M/s Bhushan Steel Ltd. and M/s ABB Ltd. and the impugned order concluded that the High Sea Sale is not valid; the goods were ordered to be confiscated with the permission to redeem the same on fine of Rs.10 lakhs; penalties were imposed u/s 112, 114AA of the Customs Act, 1962.

After considering the elaborate submissions made by both sides, the CESTAT inter alia observed –

“7. … The importer filed a signed agreement for evidencing such High Sea Sale. As noted already, the said agreement is apparently not genuine on the simple ground that the agreement could not have been signed on 23/12/2011 on a stamp paper, which was admittedly purchased on 29/12/2011. We are in agreement with the Original Authority that submission of such document before the Customs Authorities vitiates the claim of the importer. The plea that they have other supporting documents to establish High Sea Sale transaction becomes seriously jeopardized in the face of such untenable document filed before the authorities. Accordingly, we hold that the Original Authority has correctly rejecting such agreement.

8. The next question for consideration is the discount of 20% claimed by the importer. Admittedly, the said discount is a special discount for which no explanation was offered by the importer. It is also an admitted fact that the seller and M/s ABB India who placed orders, are part of the same group and the transaction are to be scrutinized for special relationship. In other words, the sale value between these two companies of the same group cannot be accepted as transaction value for Customs duty unless the relationship is examined and non-influenced nature of such transaction is brought out by evidence…We find no reason to interfere with such finding. Accordingly, we reject the contention of the appellant on these issues.”

Noting that the document submitted for supporting the high sea sale is unacceptable and pre-dated, the confiscability of the goods and imposition of penalties was upheld.

The impugned orders were upheld and the appeals were rejected.

(See 2017-TIOL-3589-CESTAT-DEL)


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