Page 273 - ELT_1st September 2020_Vol 373_Part 5

2020 ] KARACHIRA COIR MANUFACTURERS v. COMMISSIONER OF CUSTOMS, COCHIN 711

the importer on 27-8-2018 to show cause as to why goods should not be confis-
cated under Section 111(i) and (o) and penalty should not be imposed under Sec-
tion 112(a) and (b) of the Customs Act, 1962 and the declared value should not be
rejected and re-fixed under provisions of Customs Valuation Rules, 2007. Im-
porter filed detailed reply to the show cause notice and after following the due
process, the Commissioner rejected the value declared by the importer under
Rule 12 of the Customs Valuation (Determination of Value of Imported Goods)
Rules, 2007 and re-fixed at Rs. 78 per kg under Rule 5 of Customs Valuation (De-
termination of Value of Imported Goods) Rules, 2007.
5. Heard both the parties and perused the records.
6. Learned Counsel for the appellant submitted that the impugned or-
der is not sustainable in law as the same has been passed without properly ap-
preciating the facts and the law. He further submitted that the impugned order is
not tenable in law since the valuation has not been done in conformity with the
Customs Valuation Rules. He further submitted that the reason given by the De-
partment not to accept the declared value is that M/s. KHI Vanich Group who is
supplier of the goods to the appellant appeared to be a trader and not the manu-
facturer of goods but no reason has been given in the impugned order regarding
such an allegation. He further submitted that the appellant in reply to the show
cause notice has categorically stated that M/s. KHI Vanich Group is the manu-
facturer of the goods and the goods supplied by them under invoice dated 24-2-
2018 was allowed to be cleared through Cochin Port as per the declared value
vide Bill of Entry No. 5547795, dated 12-3-2018. He further submitted that the
department has not given any reason to come to such a wrong conclusion. He
further submitted that the impugned goods were imported under ASEAN
Agreement between two sovereign states and if the department has any reason
or doubt regarding the source of supply of material or supplier had committed
any mistake while supplying the goods to India, appropriate steps should have
been taken to blacklist the supplier for supply of goods under ASEAN Agree-
ment than making false allegation against the appellant. The Learned counsel
also submitted that the other reason to reject the transaction value is that raw
material for the product is Low-density Polyethylene (LDPE), Linear Low-
density Polyethylene (LLDPE), etc., and the value of raw material ranges to USD
1180 to USD 1270 per Metric Tonne. Learned counsel submitted that this finding
of the Commissioner in the impugned order is without any basis. Further, the
report of the Central Institute of Plastic Engineering and Technology (CIPET),
Cochin vide its Test Report No. 18146, dated 2-8-2018 observed that PVC content
is said to be 51%. However, the report does not say that the raw material of the
impugned goods is LDPE or LLDPE. Learned counsel also submitted that the
copy of the Test Report as relied upon in the show cause notice has not been fur-
nished to the appellants. Further, he submitted that the Commissioner in order to
justify this finding has come to the conclusion that material available in the Pub-
lic Domain says that raw material of the impugned goods is HDPE and LLDPE,
etc., but the said material is not admissible as evidence. He further submitted
that the details of contemporaneous import relied upon by the Commissioner to
enhance the value are also not from the country of export and is from different
countries and therefore, the said import cannot be considered as contemporane-
ous export. He further submitted that instead of accepting the contemporaneous
import by the appellant earlier to the present import, the Commissioner has
wrongly observed in the order that the appellant has accepted the enhanced val-
EXCISE LAW TIMES  1st September 2020  273