The burden of proof regarding undervaluation lies with Revenue, necessitating concrete evidence; reliance on third-party statements without corroboration is insufficient to substantiate claims.

SATENDRA VIKRAM SINGH

M/s. Jay Jalaram Saw Mill, Vatva, Ahmedabd (Appellant-1) had during the year 2009 and 2010 imported various types of Timber at Kandla and Mundra port. During investigation conducted by DRI against various importers of timber, it revealed that these importers including the appellant, had undervalued their goods and evaded the Customs duty. Evidence of under-valuation of timber was found in the copy of emails submitted by the supplier Sri Avinash Jindal. The officers recorded the statements of Sri Avinash Jindal on 05.09.2011, wherein he admitted that the import of timber made in the name of his firm M/s A. K. International and in the name of other importers had been undervalued. Sometimes, invoices are prepared on the letter head of Sri Amitabh Saboo’s company M/s. Vinayak Impex FZE, Dubai. The invoice amount is transferred through the banking channel whereas the balance amount is given through other persons to M/s. Vinayak Impex FZE, Dubai or to Bhavik Rathod in Sudan as per their instructions. The best quality sawn timber from Tanzania is about USD 850 per cubic ft. and least quality timber is of USD 300. For Sudan timber, rate varies between USD 700 (best quality) to USD 500 (least quality). Similarly, rate of Ghana Timber on an average varies from USD 300 to USD 400 per cubic ft.

1.1 The officers also searched the business premises of the Appellant-1 as well as residence of the partner Sri Arjanbhai Karsanbhai Patel (Appellant-2) but nothing incriminating was found. Statements of Sri Arjanbhai Patel was recorded on 05.06.2014 wherein he accepted undervaluation of imported timber and agreed to pay the differential duty on all the imports. He also accepted to have paid the differential amount in cash to the persons sent by the suppliers. After completing the investigation, revenue issued show cause notice dated 09.06.2014 proposing rejection of the declared value of the imported timber, redetermination of value and demanding the differential duty of Rs. 47,421/- and Rs. 91,780/- under Section 28 (4) of the Customs Act, 1962 alongwith interest in respect of timber imported at Kandla and Mundra ports respectively. The proposal to confiscate the goods under Section 111 (m) and impose penalty under Section 112 (a) & 114A of the was also made, besides penalty under Section 112 (a) and Section 114AA of the on both Shri Arjanbhai Karsanbhai Patel & Shri Avinash Jindal.

1.2 The above show cause notice was adjudicated wherein the Adjudicating Authority held as under :-

Aggrieved with this order, M/s Jay Jalaram (Appellant-1) as well as Sri Arjanbhai Karshan Bhai Patel filed appeals before the Commissioner (Appeals) who vide impugned order dated 04.05.2017 upheld the order of the lower authority except reducing the penalty on the partner from total Rs. 12,70,000/- in respect of both the ports to Rs. 9,40,000/- under Section 112 (a) & 114AA of the Customs Act, 1962 . He also noted that the Appellant- 1 has already paid the differential duty alongwith interest and the reduced penalty as per Provision to Section 114A of the . Aggrieved with this order, both the appellants filed appeal before this Tribunal.

2. In appeals, the appellant took the following grounds:-

• They imported timber in the normal course of trade and filed bills of entry. If the department had any doubt about assessable value, it should have been done by the Assessing officer at the time of assessment.

• The entire investigation is based on the statements of Shri Avinash Jindal and no statements of Shri Amitabh Saboo or any other person has been recorded by the officers. Applying other statements to the imports made by the appellants without any further corroborative evidence is not admissible for demanding duty and imposing penalty on them.

• The mail relied upon by the investigation has been sent to various parties but no su