[Order per : M.V. Ravindran, Member (J)]. - All these four appeals are disposed of by a common order as the facts in these cases are common.

2. These appeals are directed against Orders-in-Original Nos. 127/2012, dated 26-11-2012 and 124/2012, dated 19-11-2012.

3. The relevant facts that arise for consideration are appellant-importers M/s. Essfo Impex Pvt. Ltd. and M/s. Ess Dee Trading Co. (hereinafter referred to as appellant-importers) were engaged in import of ball valves/check valves and cartridges, etc., through JNPT, ICD Mulund. The goods were imported during the period 21-8-2008 to 30-4-2010 in the case of appellant-importer M/s. Essfo Impex Pvt. Ltd. and in the case of appellant-importer M/s. Ess Dee Trading Co. the imports were during the period of 16-5-2006 to 22-11-2009. They filed Bills of Entry and the said goods were cleared after final assessment of bills of entry. Subsequently, after getting specific information about undervaluation of the imported consignments, Preventive Section of the Customs Commissionerate initiated an investigation. After recording various statements and scrutiny of the documents, Departmental Officers came to a conclusion that there was undervaluation of the consignments imported by the appellant-importers during the relevant period as the price shown on LME Bulletin for Brass and Zinc scrap was higher than the value of Ball Valves which were imported and the statement of Shri S.K. Dhawan also agreed that there was undervaluation. Show cause notice dated 6-5-2011 was issued. All the appellants contested the show cause notice on merits, limitation on the ground also there being no contemporaneous import shown by the Revenue. The adjudicating authority after following due process of law, did not agree with the contentions raised by the appellants, confirmed the demand of differential duty with interest and also imposed penalties. Further the adjudicating authority upheld the liability for confiscation of the imported goods in both the cases.

3. Learned counsel appearing for all the appellants, after taking us through the entire case records would submit that the adjudicating authority has adopted a very novel way of redetermination of the value of the imported consignments inasmuch as the value of the basic raw material was considered for holding the charge of undervaluation based upon the statement given by Shri S.K. Dhawan who stated that valves content 70% of brass and 30% of zinc. It is his submission that the said findings of the adjudicating authority are totally erroneous as there is no test conducted on the goods imported to ascertain whether the Ball valves and Check Valves were having the content of brass and zinc as stated by Shri S.K. Dhawan. It is his further submission that the cost factor cannot be adopted for valuation, when the constituent of the imported consignments are not known; LME price cannot be relied upon as also the tariff value for scrap of brass and zinc cannot be adopted for valuation and on the face of the fact that the percentage of raw materials in the final product is taken arbitrarily. It is his submission that the department did not produce or relied upon any contemporaneous import, while appellants had produced evidences of contemporaneous import but was ignored by the Commissioner and no findings are given. It is his further submission that the findings of misdeclaration of the value are nothing but presumptions and surmises. It is his further submission that an enquiry conducted by the department on the manufacturers in India is totally one sided and never informed to the appellant. It is his submission that the enquiries conducted with the manufacturers of such items is also vitiated as the goods imported were competing goods hence the reliance placed on such manufacturers views is of interested parties hence needs to be discarded as the adjudicating authority did not give cross-examination of such manufacturers. It is his further submission that the adjudicating authority has recorded a finding that the appellant-importers did not produce the invoice of manufacturers but produced invoices of a trading house with intent to suppress the value. He would submit that when the goods were cleared on importation, all the documents were produced and after verification only the Customs Officers cleared the consignments. He relied upon the decision of the Apex Court in the case of CC v. Prabhu Dayal Prem Chand - , Ruchi Associates v. Collector - (S.C.). He also relied upon the decision of this Tribunal in the case of Radhey Shyam Ratanlal vide Final Order No. A/3972/2015/CB, dated 23-12-2015 for the proposition that contemporaneous imports were discarded, accordingly requirement of Rule 5(3) of Customs Rules were validated and the appeal was allowed. He would submit that a similar issue was decided by this Bench in the bunch of appeals in the case of Ajay Export and Ors. vide Final Order Nos. A/3446-3470/2015/CB, dated 20-10-2015, wherein it was held that contemporaneous imports price needs to be considered for arriving at the correct value.

4. Learned DR would submit that the finished goods imported by the appellant, i.e., valves which have to be manufactured wherein the cost of raw material, manufacturing cost and other costs are considered for the purpose of valuation. He would submit that the raw material price of brass scrap and zinc scrap is more than the value of the imported consignment which would indicate that there was very heavy undervaluation. He would submit that such undervaluation is confirmed by Shri S.K. Dhawan in a statement recorded under Section 108 of the Customs Act, 1962 hence the argument put forth by the learned counsel needs to be discarded as Shri S.K. Dhawan has not retracted the statement. It is his further submission that the judgment of the Apex Court in the case of Collector of Customs v. Shibani Engineering Systems - (S.C.), specifically states the law, if transaction value of the goods imported are ridiculously low, totally unrealistic and the goods are imported from traders and price list of manufacturer are not produced, such transaction value needs to be discarded.

5. We have considered the submissions made at length by both sides and perused the records.

6. We find from the records that the issue involved is regarding the valuation of ball valves and check valves. The imports were made during the material period and the bills of entry were finally assessed.

6.1 The adjudicating authority has rejected the transaction value of the appellant-importer in the impugned orders by recording the finding that he disagree with the transaction value due to following reasons :-

(a)     That the prices of the brass/zinc valves were less than the LME price of valves and scrap of brass and zinc.

(b)     Statement recorded of Shri S.K. Dhawan indicated that the said valves had brass content 76% and iron content 24%, zinc content in zinc ball valves was 65% and iron content was 35%.

6.2 That undervaluation and misdeclaration has been admitted due to the fact that importers have not submitted the manufacturer invoices, catalogues from the trading house, supporting interrogation of the employees.

6.3 Opinion of the Jalandhar Central Excise Divisional Deputy Commissioner under whom many such units existed wherein it said that value addition is 30% on the raw materials. In his own statement the value of metal brass and zinc was much higher.

6.4 The transaction value was ridiculously low.

7. We find that the argument put forth by learned DR in support of the impugned orders and reasoning of the impugned orders for confirmation of differential duty are flawed for more than one reason.

7.1 Firstly, we find that the methodology adopted by the adjudicating authority for redetermination of the value of the imported consignments is totally on presumption and surmises. The adjudicating authority has come to a conclusion that imported ball valves contained brass content of 76% and iron content of 24%, zinc content in zinc ball valves is of 65% and iron content is of 35%. In the entire case records we are unable to find anything which indicates that the content as recorded by the adjudicating authority is supported by any evidence. The adjudicating authority has relied on the statement given by S.K. Dhawan. In our considered view this finding of the adjudicating authority is not in consonance of the law. There is nothing on record to indicate that samples were drawn from the consignment and sent for testing to Dy. Chief Chemist and Examiner of the Department to ascertain the contents of brass and zinc. It is also surprising to note that the adjudicating authority has relied upon only the statement of Shri S.K. Dhawan to hold that the valves were having brass and zinc content as mentioned.

7.2 Secondly, we find that the adjudicating authority has rejected the transaction value as filed by the appellant without any reasoning or finding. The only finding recorded by the adjudicating authority is that the said values are unrealistic and ridiculously low. To arrive at such finding the adjudicating authority has not brought on record any contemporaneous import of the same items. The provisions of Customs Act, 1962 are very clear on this point inasmuch as in order to reject the transaction value the least that is expected is to produce any evidence of contemporaneous import of higher value. In the case in hand, it is the submission of appellant-importer they had submitted details of contemporaneous imports of the same goods and the value seems to be more or less is same as declared by the appellant-importer is not addressed to and also surprising to note that the adjudicating authority has not recorded a single sentence of finding on such contemporaneous import detail given by the appellant.

7.3 Thirdly, we find that the adjudicating authority has come to a conclusion that there was undervaluation as the appellant-importer did not produce the manufacturer’s invoice nor catalogue. In our view these findings of the adjudicating authority is totally not in consonance with the law, as these consignments were cleared by the same department when the bills of entries were filed and the documents as produced were accepted as correct at that time. If the authorities had entertained any doubt, they should have called for these documents at the time of clearance of the consignments.

7.4 Fourthly, we find that the adjudicating authority has recorded that the declared value were not actual transaction value paid or payable by the importer; are incorrect findings as they are not evidenced in any form; if the adjudicating authority has to come to such a conclusion in the impugned order there has to be a findings that the appellant-importer had paid additional amount to the exporters in some way or other with proper evidence. In the absence of any evidence it is not possible to accept the statement of learned DR that the transaction value and the declared value were not actual transaction value.

7.5 We also find strong force in the contention raised by the learned advocate for the appellant-importers that the decision of this Tribunal in the case of Radhey Shyam and Ajay Exports & Ors. (supra) are on similar set of facts wherein this Bench has recorded that contemporaneous import details if produced by the appellant-importer, refusing to look to such evidence is incorrect as the value in the contemporaneous imports were accepted by the department in respect of some importers. We reproduce the findings of this Bench in the case of Ajay Exports (supra).

“(c) We also note that the adjudicating authority has refused to look at other contemporaneous imports, which are not the subject matter of the present show cause notice on the ground that there was gross undervaluation being done by the trade. We find that if the value of contemporaneous imports were accepted and the transaction value in those case are not doubted by the revenue in the assessment orders, it is not understandable why the said values could not have been used for the purposes of comparing the same with the value of the consignments in question in these appeals. It is also said along that the Department has to first reject the transaction value and then follow the rules as laid down from rules 5 to 9 of the valuation rules in order to arrive at the value for discharge of Customs duty. From the entire records we find that this does not seen to have been done. In addition, we find that the documents which have come from the foreign source, i.e., Indian embassy, Moscow cannot bring home the charge of undervaluation in the case of Bhatia Group and Sunderlal Group as none of these documents which are relied upon and received from foreign source pertain to these groups; even as far as Ratan Lal Group is concerned these documents cannot be relied upon for the reasons set out hereinabove.”

7.6 It can be seen that the above reproduced findings are squarely applicable in these cases. The reliance placed by the learned DR in the case of Shibani Engineering Systems (supra) will also not carry the case of Revenue any further as we find that in that case also in paragraph 11, the Apex Court has come to a conclusion, that the transaction value can be rejected if it is unrealistically and ridiculously low, but at the same time they had stated that the reasoning given in that case by the adjudicating authority are not acceptable to them in the absence of details of contemporaneous imports. In the case in hand, the ratio of the said judgment may not apply as it is on record that the appellant herein produced details of contemporaneous imports which was not considered by the adjudicating authority.

8. In view of the foregoing, we hold that the impugned orders are unsustainable and liable to be set aside and we do so. The impugned orders are set aside and the appeals are allowed with consequential relief, if any.

(Operative part of the order pronounced in Court on 2-2-2016)