CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH- COURT NO. I Customs Appeal No. 219 of 2009 (Arising out of Order-in-Original No. 02/APSS/CC/DRI/NCH/2009 dated 06.02.2009 passed by the Commissioner Central Excise (Adjudication), New Delhi.)

M/s. Elegant International …Appellant

301, Nikita Tower-II, Azadpur Commercial Complex, Delhi versus Commissioner of Central Excise (Adjudication), …Respondent Room No. 214, 2^nd Floor, New Customs House, Near IGI Airport, New Delhi - 110037 APPEARANCE:

Shri B. L. Narasimhan, Ms. Jyoti Pal, Shri Ashwani Bhatia and Ms. Srishti Bajaj, Advocates for the Appellant Shri Nagender Yadav, Authorised Representative of the Department CORAM: HON‟BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON‟BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Date of Hearing: 10.02.2025 Date of Decision: 23.06.2025 FINAL ORDER NO. 50912/2025 JUSTICE DILIP GUPTA:

M/s. Elegant International¹ has filed this appeal to assail the order dated 06.02.2009 passed by the Commissioner Central Excise (Adjudication), New Delhi² in so far as it rejects the transaction value of the imported silk fabrics from China through 37 Bills of Entry during the period from September 2003 to January 2005 under rule 10A of the Customs Valuation (Determination of Price of Imported goods) Rules, 1988³ and re-determines the transaction value under rule 5 of the 1988 Valuation Rules. Accordingly, the demand of differential customs duty

1. the appellant

2. the Commissioner

3. the 1988 Valuation Rules has been confirmed. The Commissioner has also imposed redemption fine on the silk fabric confiscated under section 111(M) of the Customs Act, 1962⁴ and has also imposed penalty upon the appellant under section 114(A) of the Customs Act.

2. It transpires that intelligence was received that certain other importers of silk fabrics were engaged in under-valuation of this product imported from China and were thereby evading customs duty. Intelligence further suggested that two sets of invoices were raised by the said overseas suppliers for the same consignment; one set of invoices showed the actual value, while the other set showed lesser value. It is the latter invoice which was submitted by other Indian importers to the customs for clearance purposes so as to evade customs duty. An investigation was initiated by the Directorate of Revenue Intelligence⁵, New Delhi on the import of silk-fabrics from China by other importers and the premises of M/s. Purnima Enterprises at Chennai and M/s. Om Fabrics at Bangalore were searched. It also transpired that M/s. Zhejiang Cathaya International, China⁶ had issued the invoices to such Indian importers. Searches were also conducted at the business premises of M/s. Vedant Enterprises at Bangalore, which who had also been supplied silk fabric by Zhejiang, China.

3. Based on the aforesaid investigation initiated by the officers of DRI on the other importers of silk fabrics, the premises of the appellant, to whom Zhejiang, China had also supplied silk fabrics, were searched. The residential premises of the Director were also searched. It is the case of the appellant that no incriminating documents were recovered

4. the Customs Act

5. DRI

6. Zhejiang, China from the premises of the appellant and the Director. The DRI also recorded statement of Ajit Gupta, who was looking after the work of the appellant, under section 108 of the Customs Act.

4. A show cause notice dated 06.08.2005 was thereafter issued by Additional Director General of DRI, New Delhi to the appellant proposing to demand differential duty from the appellant with interest; confiscation of the impugned goods; and imposition of penalties, based on under-valuation of the impugned goods by relying upon contemporaneous imports and documents retrieved from premises of other importers pertaining to import of silk fabrics from China. It is basis the investigation carried out by DRI against other importers named above that it was alleged that the appellant had also de