OCTOBER 07, 2024

(Part 3 of series)

By S K Rahman, IRS, working as Principal Commissioner (AR) at CESTAT Delhi

RECENTLY, in the month of September 2024, the Hon'ble CESTAT Principal Bench Delhi has passed the following Final Orders on Departmental appeals against Orders- in-Appeal on under-valued imports of Aluminium scrap. In this part 3 of Series, the cases of aluminium scrap appeals where consent letter has been given by the importer are covered.

IMPORT OF ALUMINIUM SCRAP

Each of these Orders are discussed as below:

CMR NIKKEI PVT LTD & CENTURY METAL RECYCLING PVT LTD: 2024-TIOL-913-CESTAT-DEL & 2024-TIOL-914-CESTAT-DEL

1. FACTS OF CASE 1 : M/s CMR Nikkei India Pvt. Ltd. imported aluminum scrap of various grades and filed 119 Bills of Entry for clearing the consignment on the basis of self-assessment of duty on the transaction value. The Assessing Officer doubted the correctness of the value declared by CMR Nikkei in the Bills of Entry and when confronted with contemporaneous data by the Assessing Officer, CMR Nikkei not only submitted letters that the value declared in the Bills of Entry should be rejected, but also accepted the value proposed by the Assessing Officer. The value was, accordingly, enhanced by the Assessing Officer and CMR Nikkei, paid the differential duty of customs. The goods were cleared after the out of charge order was issued by the Assessing Officer. Thereafter, CMR Nikkei filed 119 appeals before the Commissioner (Appeals), Central Excise and CGST, Jaipur to challenge the enhancement of the value. These appeals have been allowed by a common order dated 20.09.2019. The enhancement of the value has been set aside by the Commissioner (Appeals) and the value declared by CMR Nikkei in the Bills of Entry has been accepted. This order has been assailed by the department in these 119 appeals.

2. ORDER : In view of the detailed reasons given by the Hon'ble CESTAT in CENTURY METAL RECYCLING CMR NIKKEI CESTAT FINAL ORDER NO's. 58014 to 58070 2024 dt 19-08-24 2024-TIOL-777-CESTAT-DEL for setting aside the order passed by the Commissioner (Appeals), the present impugned order dated 20.09.2019 passed by the Commissioner (Appeals) allowing the 119 appeals deserves to be set aside and is set aside. All the 119 appeals filed by the department are, accordingly, allowed and the enhancement in the value of the imported goods by the Assessing Officer is maintained.

3. FACTS OF CASE 2 :- M/s Century Metal Recycling Pvt. Ltd. imported aluminum scrap of various grades and filed 112 Bills of Entry for clearing the consignment on the basis of self-assessment of duty on the transaction value. The Assessing Officer doubted the correctness of the value declared by CMR Nikkei in the Bills of Entry and when confronted with contemporaneous data by the Assessing Officer, Century Metal Recycling Pvt. Ltd not only submitted letters that the value declared in the Bills of Entry should be rejected, but also accepted the value proposed by the Assessing Officer. The value was, accordingly, enhanced by the Assessing Officer and Century Metal Recycling Pvt. Ltd, paid the differential duty of customs. The goods were cleared after the out of charge order was issued by the Assessing Officer. Thereafter, Century Metal Recycling Pvt. Ltd 112 appeals before the Commissioner (Appeals), Central Excise and CGST, Jaipur to challenge the enhancement of the value. These appeals have been allowed by a common order dated 20.09.2019. The enhancement of the value has been set aside by the Commissioner (Appeals) and the value declared by Century Metal Recycling Pvt. Ltd in the Bills of Entry has been accepted. This order has been assailed by the department in these 112 appeals.

4. ORDER In view of the detailed reasons given by the Hon'ble CESTAT in CENTURY METAL RECYCLING CMR NIKKEI CESTAT FINAL ORDER NO's. 58014 to 58070 2024 dt 19-08-24 2024-TIOL-777-CESTAT-DEL for setting aside the order passed by the Commissioner (Appeals), the present impugned order dated 20.09.2019 passed by the Commissioner (Appeals) allowing the 112 appeals deserves to be set aside and is set aside. All the 112 appeals filed by the department are, accordingly, allowed and the enhancement in the value of the imported goods by the Assessing Officer is maintained.

M/s JSB Aluminium Pvt. Ltd: 2024-TIOL-915-CESTAT-DEL & 2024-TIOL-916-CESTAT-DEL

5. FACTS OF CASE 3 :- M/s JSB Aluminium Pvt. Ltd. imported aluminum scrap of various grades and filed 17 Bills of Entry for clearing the consignment on the basis of self-assessment of duty on the transaction value. The Assessing Officer doubted the correctness of the value declared by JSB Aluminium in the Bills of Entry and when confronted with others contemporaneous data by the Assessing Officer, JSB Aluminium not only submitted letters that the value declared in the Bills of Entry should be rejected, but also accepted the value proposed by the Assessing Officer. The value was, accordingly, enhanced by the Assessing Officer and JSB Aluminium, paid the differential duty of customs. The goods were cleared after the out of charge order was issued by the Assessing Officer. Thereafter, JSB Aluminium filed 17 appeals before the Commissioner (Appeals), Jaipur to challenge the enhancement of the value. These appeals have been allowed by a common order dated 26.11.2020. The enhancement of the value has been set aside by the Commissioner (Appeals) and the value declared by JSB Aluminium in the Bills of Entry has been accepted. This order has been assailed by the department in these 17 appeals. These Departmental appeals have come up for hearing and the Hon'ble CESTAT has passed Final Orders setting aside these Orders-in -Appeal as detailed above

6. ORDER for the reasons recorded in the Hon'ble CESTAT in CENTURY METAL RECYCLING CMR NIKKEI CESTAT FINAL ORDER NO's. 58014 to 58070 2024 dt 19-08-24, 2024-TIOL-777-CESTAT-DEL for setting aside the order passed by the Commissioner (Appeals), the present impugned order dated 26.11.2020 passed by the Commissioner (Appeals) allowing the 17 appeals deserves to be set aside and is set aside. All the 17 appeals filed by the department are, accordingly, allowed and the enhancement in the value of the imported goods by the Assessing Officer is maintained.

7. FACTS OF CASE 4:- M/s JSB Aluminium Pvt. Ltd. imported aluminum scrap of various grades and filed 117 Bills of Entry for clearing the consignment on the basis of self-assessment of duty on the transaction value. The Assessing Officer doubted the correctness of the value declared by JSB Aluminium in the Bills of Entry and when confronted with others contemporaneous data by the Assessing Officer, JSB Aluminium not only submitted letters that the value declared in the Bills of Entry should be rejected, but also accepted the value proposed by the Assessing Officer. The value was, accordingly, enhanced by the Assessing Officer and JSB Aluminium, paid the differential duty of customs. The goods were cleared after the out of charge order was issued by the Assessing Officer. Thereafter, JSB Aluminium filed 117 appeals before the Commissioner (Appeals), Jaipur to challenge the enhancement of the value. These appeals have been allowed by a common order dated 11.12.2020. The enhancement of the value has been set aside by the Commissioner (Appeals) and the value declared by JSB Aluminium in the Bills of Entry has been accepted. This order has been assailed by the department in these 117 appeals. These Departmental appeals have come up for hearing and the Hon'ble CESTAT has passed Final Orders setting aside these Orders-in -Appeal as detailed above

8. ORDER for the reasons recorded in the Hon'ble CESTAT in CENTURY METAL RECYCLING CMR NIKKEI CESTAT FINAL ORDER NO's. 58014 to 58070 2024 dt 19-08-24, 2024-TIOL-777-CESTAT-DEL for setting aside the order passed by the Commissioner (Appeals), the present impugned order dated 11.12.2020 passed by the Commissioner (Appeals) allowing the 117 appeals deserves to be set aside and is set aside. All the 117 appeals filed by the department are, accordingly, allowed and the enhancement in the value of the imported goods by the Assessing Officer is maintained.

9. The Department's Authorised Representative for the Appellant has made several submissions as: (i) The Assessing Officer doubted the importers' declared value, as it was undervalued compared to contemporaneous data. The importers admitted this and accepted the officer's redetermination of value. (ii) The importers paid the differential duty before appealing. (iii) What is admitted doesn't need proof, citing a Supreme Court judgment Commissioner of C. Ex., Madras vs. Systems & Components Pvt. Ltd.; (iv) Natural justice wasn't violated, as the importers accepted the redetermination of value without retracting their statement cited Tribunal in DJP International vs. Commissioner of Customs (ICD), New Delhi upheld by Supreme Court (v) The redetermination of value method was explained to the importers. (vi) Once out of charge was issued, contesting the value was impermissible cited Tribunal in Advanced Scan Support Technologies vs. Commissioner of Customs, Jodhpur. (vii) The Commissioner (Appeals) committed an error in observing that the value of the imported goods had been enhanced on the basis of a Circular issued by the Director General of Valuation.

10. The counsel for the Respondents however, supported the impugned orders and submitted that it does not call for any interference in this appeal. Due to urgency of the matter and to mitigate losses, including demurrage charges, the importers had accepted the enhanced value. The importers, being regular importers, were left with no choice but to issue coerced letters.

11. The Hon'ble CESTAT has held that (ref para 9 of Order) ".. while examining the contention of learned counsel for the respondents that letters were submitted by the importers under coercion, the Bench referred to a chart showing details such as S. NO. BILL OF ENTRY NO. DATE OF BILL OF ENTRY DATE OF CONSENT LETTER OUT OF CHARGE DATE …." (Ref para 58 of relied upon Order) "….It is, therefore, not possible to accept the submission made by the learned counsel for the respondent that the importers were coerced into giving their consent/acceptance"

12. Considering all the above , the Hon'ble CESTAT set aside all the impugned Order-in-Appeal ; all the Departmental appeals filed are allowed and enhancement of value of the imported goods by the assessing Officer are maintained.

13. The Take aways from the above four Final Orders of Hon'ble CESTAT are :

a) What is admitted need not be proved. Once the importers submitted letters not only stating that the value declared in the Bills of Entry may be rejected, but also accepted the value proposed by the Assessing Officer, they can not challenge the enhancement of the value by filing appeal. Even if appeal is filed, the same may not stand judicial scrutiny.

b) In the cases where consent letter for acceptance of enhancement of value has been given, the Assessing Officer is not required to give reasons for rejection of the transaction value and need not do the determination of the assessable value. They can directly adopt the agreed upon value

c) But the Sec 14 of Customs Act 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 shall be strictly followed keeping in view the various judgements by Hon'ble Courts

(The views expressed are personal and not in official capacity)

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