The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that once suppression of facts is established, an extended period of limitation can be invoked.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that there is a deliberate mis-declaration on the part of the appellant in intentionally suppressing the actual invoices reflecting true transaction value so as to evade the payment of higher customs duty. The importer has thus violated the provisions of section 17(1) and section 46 of the Customs Act as they failed to make the correct declaration in Bills of Entry and proper self assessment.
On an intelligence, SIIB-Import ICD, TKD investigated a case of mis-declaration and undervaluation in imports of “Automotive Safety Glass” shield of assorted sizes and PU Sealant. The office premises and the residential premises of the appellant were searched on 12.10.2018.
During investigation, incriminating documents like actual Commercial invoices of past imports was resumed vide Panchnama dated 12.10.2018 from the office premises of M/s Combine Trading Company. It was noticed that the actual value of “Automotive Safety Glass” windshield were not correctly declared before the Customs at the time of Customs clearance. Documents in the form of parallel invoices (actual transaction value) resumed from the office premises of M/s Combine Trading Company related to past imports, were also examined via-a-vis value declared and entered, by the said importer.
The examination indicated that the importer has also suppressed the actual transaction value in respect of past import consignments of Automotive Windshield.
Import-Export Manager of the appellant company was recorded under section 108 of the Customs Act and subsequently the statement of Shri Jagmohan Kaushal, Proprietor of the appellant company was recorded on 15.10.2018.
From the statement of Jagmohan Kaushal, it was revealed that there was an arrangement with M/s. Chandok Glass House whereby all correspondences with the foreign supplier M/s. Xinyi Automobile Glass, China was done by them and after the imported goods were cleared, they were sold to M/s. Chandok Glass House.
On the issue of undervaluation with reference to the two actual invoices
recovered during the search he admitted that invoice with higher value of USD 22137.43 was the actual value of the imported consignment and the invoice of value USD 11154.72 was shown in customs for assessment purposes by them. The statement of Shri Jagmohan Kaushal necessitated the inquiry against Shri Jaspreet Singh, authorized signatory of M/s. Chandok Glass House.
A statement of Jaspreet Singh was recorded on 24.10.2018, where he admitted that all the work related to import of automobile glass was being booked after by him as the authorized representative of M/s. Chandok Glass and he further admitted the mistake in the undervaluation of the two parallel invoices recovered at the time of search and agreed to pay the duty thereon.
Show cause notice was issued to the appellants demanding the differential duty after rejecting the self- assessed transaction value and re-determined proposing confiscation under section 111 (m) and penalty under section 114A and 114(AA) of the Act on the importer. The penalty under section 112(a)(ii)/ 112(b) (ii) and section 114AA was also proposed on Shri Jaspreet Singh the authorized signatory of M/s. Chandok Glass House.
On adjudication, the show cause notice was confirmed by the impugned order. Hence, separate appeals have been filed by the company as well as by Shri Jaspreet Singh.
The tribunal held that there is a deliberate mis-declaration on the part of the appellant in intentionally suppressing the actual invoices reflecting true transaction value so as to evade the payment of higher customs duty. The importer has thus violated the provisions of section 17(1) and section 46 of the Act as they failed to make the correct declaration in Bills of Entry and proper self assessment. The settled position of law is that once the suppression of facts is established, the extended period of limitation can be invoked and hence the department has rightly issued the show cause notice dated 17.09.2020 within the extended period of five years, from the date of the knowledge of the suppression of facts.
Case Details
Case Title: M/s.Combine Trading Company Versus Principal Commissioner of Customs- (Import), Inland Container Depot, Tughlakabad, New Delhi
Case No.: Customs Appeal No. 51526 of 2022
Date: 06.01.2025
Counsel For Petitioner: N.K.Sharma
Counsel For Respondent: Nagendra Yadav
