The Customs, Excise & Service Tax Appellate Tribunal, New Delhi, allowed 57 department’s appeals and maintained enhancement in imported goods value made by AO.
The tribunal noted that the Supreme Court in New India Assurance Company Limited vs. Genus Power Infrastructure Limited observed that in connection with allegations relating to fraud and coercion, Genus Power contended that the insurance company by exercising coercion compelled Genus Power to sign certain documents, including pre-prepared discharge vouchers, in which it accepted the claim amount from the insurance company in full and final settlement. Genus Power also contended that it was forced to do so as it was facing extreme financial difficulty and because of coercion it was denied just claim by the insurance company. It was also contended that the insurance company threatened Genus Power to accept the amount in full and final settlement failing which the insurance company will not pay any amount. These were the circumstances pointed out by Genus Power to the Supreme Court regarding the compelling circumstances under which it was forced to sign the acceptance letter.
The bench observed that these contentions were not accepted by the Supreme Court. It was held that the plea raised was bereft of any details and particulars and cannot be anything but a bald assertion. The Supreme Court pointed that since there was no protest or demur raised around the time or soon after the letter was signed, the documents cannot be said to have been submitted because of any coercion or undue influence. The Supreme Court pointed out in clear terms that a bald plea of coercion is not enough and the party which sets up such a plea must prima facie establish the same by placing material.
In the instant case, the tribunal observed that there is nothing on the record which may even remotely suggest that the importers had been coerced into submitting the letters. The importers had not made any grievance before any higher authority of the department that they had been coerced to give the consent/acceptance letters.
It was further observed that it is only after the clearance of the goods that the importers filed appeals before the Commissioner (Appeals) challenging the enhancement of the value alleging that they had been coerced into giving consent letters. Statements made by the importers are mere bald statements without any material to substantiate the same.
“It does transpire from the modus operandi adopted by the importers that they had worked out a well thought of plan to clear the goods at the transaction value indicated by them in the Bills of Entry. When the Assessing Officer doubted the value mentioned in the Bills of Entry, they readily agreed to give consent letters not only stating that the value indicated by them in the Bills of Entry should be rejected and determined in accordance with the enhanced value proposed by the Assessing Officer, but also stated that they would not require a show cause notice to be issued or a speaking order to be passed and subsequently, when the Assessing Officer enhanced the value based on the consent letters given by the importers and the goods were cleared after the differential customs duty was paid and the out of charge order was issued, they filed appeals before the Commissioner (Appeals) raising a grievance that neither the Assessing Officer followed the procedure prescribed under the 2007 Valuation Rules nor was a speaking order passed, in which case the Commissioner (Appeals) would allow the appeal and after setting aside the order of the Assessing Officer enhancing the value, restore the transaction value indicated by the importers in the Bills of Entry. In this way the importers succeed in restoring the value mentioned in the Bill of Entry without any determination by the Assessing Officer of the assessable value”, the bench observed.
The tribunal said that the allegation regarding coercion, therefore, appears to be a well thought of plan to preclude the Assessing Officer from determining the correct value of the imported goods in accordance with the procedure contemplated under the 2007 Valuation Rules.
Facts
M/s Century Metal Recycling Pvt. Ltd. imported aluminum scrap of various grades and filed 28 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 Century Metal in the Bills of Entry and when confronted with contemporaneous data by the Assessing Officer, Century Metal not only submitted letters stating 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 paid the differential duty of customs. The goods were also cleared after the out of charge order was issued by the Assessing Officer.
Thereafter, Century Metal filed 28 appeals before the Commissioner (Appeals), Central Excise and CGST, Jaipur, to challenge the enhancement of the value by the Assessing Officer.
Concussion
The tribunal relied on the judgment of the Supreme Court in ONGC Mangalore Petrochemicals, New India Assurance and Bishundeo Narain in which the court held that the importers cannot be permitted to challenge the enhancement of the value by the Assessing Officer.
The bench set aside the order passed by the Commissioner (Appeals) allowing the 57 appeals and allowed all the 57 appeals filed by the department and maintained the enhancement in the value of the imported goods by the Assessing Officer.
Case Details
Case Name: Commissioner of Customs (Preventive) v/s Century Metal Recycling Pvt. Ltd.
Citation: Customs Appeal No. 51976 Of 2019 And Customs Cross Objection No. 50146 Of 2021
Tribunal: CESTAT New Delhi
Coram: Mr. Justice Dilip Gupta, President Hon’ble Mr. P.V. Subba Rao, Member (Technical)