M/S. Voith Paper Fabrics India Ltd vs Commissioner Of Customs

(Arising out of Order-in-Appeal No. 812 to 816/MCH/DC/SVB/2012 dated 01.10.2012, Order-in-Appeal No. 08 to 19 (Gr.III)/2014(JNCH)/IMP-07 to 18 dt. 10.01.2014, Order-in-Appeal No. 2215 to 2224 (GR.3)2014(JNCH)/IMP-2138 to 2147 dt.16.05.2014 passed by the Commissioner of Customs (Appeals) Mumbai-I, Mumbai II, JNCH, Raigad)

For approval and signature:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) =========================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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M/s. Voith Paper Fabrics India Ltd. : Appellant

VS

Commissioner of Customs, JNCH, Nhava Sheva : Respondent

Appearance

Shri R. Santhanam, Advocate for Appellant

Shri Ahibaran, Additional Commissioner (A.R) for respondent

CORAM:

Mr. P.S. Pruthi, Member (Technical) Mr. Mr. Ramesh Nair, Member (Judicial)

Date of hearing : 22.05.2015 Date of decision : 22.05.2015

ORDER NO.

Per : P.S. Pruthi

The appeals are directed against Orders-in-Appeal No. 812 to 816/MCH/DC/SVB/2012 dated 01.10.2012, 08 to 19 (Gr.III)/2014(JNCH)/IMP-07 to 18 dt. 10.01.2014, 2215 to 2224 (GR.3)2014(JNCH)/IMP-2138 to 2147 dt.16.05.2014 passed by the Commissioners of Customs (Appeals) Mumbai-I, Mumbai II, JNCH, Raigad,

2. The background of the case is that an investigation was conducted by Special Valuation Branch (SVB), New Custom House, New Delhi, regarding the nature of transactions between the supplier and the appellant. It was determined that the declared invoice value for the import of raw material and semi-finished goods from the related supplier on which royalty is paid from October 2009 onwards is required to be enhanced by 5% in terms of the provisions of Rule 10(1) of the Customs Valuation Rules, 2007.

2.1 As a measure of convenient administration and uniformity in practice, CBEC Circular No.1/98-Cus. dt. 1.1.1998 provided that the Special Valuation Branches which investigate transactions involving related parties would be located only at 4 Custom Houses i.e. at Chennai, Calcutta, Delhi and Mumbai. Any decision taken in a particular case in any of these four major Custom Houses is required to be followed by all other Customs formations. Another Circular No. 29/2012-Cus. dt. 7.12.2012 stated that The work relating to review, appeal and other legal matters arising out of cases investigated and orders passed by the proper officer in SVBs shall continue to be handled by the jurisdictional Commissioner of Customs. Directorate General of Valuation will provide its views on the orders passed by the proper officer to the jurisdictional Commissioner of Customs, which will be given due consideration, when the orders are examined by Commissioner of Customs for review or acceptance under Section 129D of the Customs Act,1962.

2.2. In terms of the enhancement in value by Special Valuation Branch, New Delhi, the Bills of Entry filed by the appellant at JNCH, Nhava Sheva, Mumbai were assessed finally after enhancing the declared value by 5% as per order of Dy. Commissioner (SVB) on the lines of decision taken by the D.C.. at Delhi. The Commissioner (Appeals) upheld the order of DC, Nhava Sheva or (in Appeals 85463 to 85473 and 88257) held that the jurisdiction lies with Commissioner (Appeals) Delhi.

3. Heard both sides.

4. The Ld. Counsel stated that in the assessment order made by SVB Delhi, an appeal was filed and the matter has been remanded to the Adjudicating Authority in Delhi. According to him, the Adjudicating Authority is not deciding the matter in view of the present litigation in Mumbai. The Ld. Counsel stated that since that the period of earlier SVB order passed in Delhi had expired and the review Order is pending, and the earlier SVB Order passed in 2011 is also remanded to the adjudicating authority in de novo adjudication, they wrote to the Deputy Commissioner of Customs, Nhava Sheva that 1% EDD should not be insisted beyond the period of 4 months from the date of filing data for renewal of SVB order. Reliance was placed on Circular No. 11/2001-Cus. dated 23.2.2001 and also on the Honble High Court of Mumbai order dt. 4.8.2014 in Writ Petition No.6364 of 2014 in the case of E.I. DuPont India Pvt. Ltd.

5. The Ld. AR reiterated the findings of the Commissioner (Appeals).

6. We have carefully considered the submissions. We find that as far as Appeal Nos 85463 to 85473 and 88257 are concerned, the Commissioner (Appeals) has misread the provisions of law as well as Board Circular No. 29/2012. The legal provisions are very clear. Any appeal against assessment order passed by Customs at JNCH will lie to the jurisdictional Commissioner (Appeals) Nhava Sheva. The Board Circular No. 29/2012, in fact, supports this view and states that the work relating to appeal etc. will continue to be handled by the jurisdictional Commissioner of Customs. For the sake of uniformity, the circular also states that Director General Valuation will provide its views on the orders passed by the adjudicating authority, which will be given due consideration when the orders are examined by Commissioner of Customs for review or acceptance of the orders under Section 129D of the Customs Act. Therefore, we hold that Commissioner (Appeals), Nhava Sheva is the appropriate authority to hear the appeals against assessment orders passed by Nhava Sheva, Customs.

6.1 In the other appeals also, the matter which originated from Delhi (SVB) is pending with Dy Commissioner, Delhi Customs in denovo adjudication and therefore it would be appropriate that all cases are decided by Delhi Customs DC before the decision is followed at Mumbai/Nhava Sheva.

7. In the peculiar circumstances where the views of DGOV are considered by all reviewing authorities, we would expect from DGOV to direct the Adjudicating Authority in Delhi to decide the case expeditiously in the interest of justice as well as in the interest of Revenue. Only after the case is decided by SVB Delhi where the valuation issue was first raised, should the Dy. Commissioner, Nhava Sheva take a view. This will avoid multiplicity in litigation at different places and levels (including cases referred in para 6 above).

8. Further, we direct that no additional EDD will be payable by the appellant. Only a PD bond will be required to be submitted by them. This is as per the clear instructions of the Board in Circular No. 11/2001(Supra) as well as Mumbai High Court Order in the case of E.I. DuPont India Pvt. Ltd. (Supra).

9. In the end we order

(i) The impugned orders are remanded back to the original adjudicating authority for an appropriate decision after the case is decided by Delhi DC (SVB).

(ii) DGOV, whose views are considered by all Customs Commissioners for review purpose, may direct SVB in Delhi to decide the pending case expeditiously as it has a bearing on imports made through other ports.

(iii) The appellant is not required to pay 1% extra duty deposit in terms of Board Circular No. 11/2001. A P.D. bond will suffice.

10. Appeals are disposed of in above terms.

11. Registry shall send a copy of this Order to DGOV Mumbai.

(Pronounced in Court)

(Ramesh Nair) Member (Judicial)

(P. S. Pruthi) Member (Technical)

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