OFFICE OF THE COMMISSIONER OF CUSTOMS

(IMPORTS),
SPECIAL INVESTIGATION & INTELLIGENCE BRANCH
(IMPORT),
AIR CARGO COMPLEX, SAHAR, ANDHERI (EAST),
MUMBAI – 400 099.
F. No. SIIB (I)/Gen-10/2022-23 ACC (I) Date: .07.2022

To,

The Deputy Commissioner of Customs,

Appraising Group-5A,
Air Cargo Complex,
Sahar, Andheri (East)
Mumbai – 400 099.

Sir,

Sub :Investigation Report regarding the consignment covered under Bill

of Entry No. 8387447 dated 22.04.2022 filed by M/s. Mahi
International (IEC –1313019500) through Customs Broker Firm M/s.
Razvi Shipping Agency (CB PAN No. AAEFR3124LCH001) – reg.
*****************************

With reference to the above mentioned subject, it is to inform that this

Branch has received E-Mails dated 23.04.2022 and trailing mail dated
22.04.2022 from ADG/NCTC, Mumbai informing that a consignment vide B/E
No. 8387447 dated 22.04.2022 filed by M/s. Mahi International (IEC –
1313019500) appears to be a risky consignment in relation to mis-
declaration/concealment. It was also informed that the B/E has been filed after
delay attracting fine. RMS has also prescribed 100% examination for the B/E
for concealment, mis-declaration, valuation and IPR violation. Vide said E-Mail,
it is requested thorough and detailed 100% examination for the B/E for
concealment, mis-declaration, valuation and IPR violation.

2. Accordingly, the consignment was kept on hold and 100% examination

was carried out under Panchanama dated 26.04.2022. During examination, it
is noticed that 38 Nos. of Network Modules Model No. 217-22 (18 Nos.) and Sr.
No. 8801012475(20 Nos.) of Brand “SUPERMICRO’ along with its accessories
was found. The BIS No. R-41030724 is found mentioned on the Network
Module Server having Model No. 217-22. As per NCTC Alert, the impugned
goods appear to be highly undervalued specially when imported by Air which is
an expensive mode of transport. To ascertain the value of the impugned
goods photographs of the goods was taken and Market Survey was conducted
on 08.05.2022 at Lamington Road, Mumbai, where all kind of computer parts
and peripherals are being traded. During the course of Market Survey, the
Model No. found was shown to the shopkeepers, however, it was learnt that
these Servers are not available there and therefore, the value of the same
could not be ascertained. Thereafter, to ascertain the value of the impugned
goods the same was checked on NIDB and Internet as well as services of
Chartered Engineer was availed to evaluate the goods. On the basis of CE
Certificate, the actual value of the goods is determined. Statements of the
Proprietor of the importing firmwas recorded who voluntarily stated that he will
accept the re-determined value ascertained by the Department. The detailed
investigation was conducted in terms of provisions of Customs Act, 1962.

3. On completion of investigation, an Investigation Report is prepared,

which is enclosed herewith to take further necessary action. Also copies of
RUDs enclosed for ready reference.

This issues with the approval of the Commissioner of Customs (Import),

ACC, Mumbai.

Yours faithfully

(RAHUL DHINGRA)
Deputy Commissioner of Customs,
SIIB (I), ACC, Mumbai.

Encls. : 1. Investigation Report

2. RUDs as per Annexure A.

Copy for information to :

The Addl. Commissioner of Customs,

Appraising Gr. 5A,
Air Cargo Complex,
Mumbai – 400 099.
 OFFICE OF THE COMMISSIONER OF CUSTOMS (IMPORTS),
SPECIAL INVESTIGATION & INTELLIGENCE BRANCH (IMPORT),
AIR CARGO COMPLEX, SAHAR, ANDHERI (EAST),
MUMBAI – 400 099.
F. No. SIIB (I)/Gen-10/2022-23 ACC (I) Date: .07.2022

INVESTIGATION REPORT

Sub: Investigation Report regarding the consignment covered under Bill of

Entry No. 8387447 dated 22.04.2022 filed by M/s. Mahi International
(IEC-1313019500) through Customs Broker Firm M/s. Razvi Shipping
Agency (CB No. 11/314; PAN No. AAEFR3124LCH001) – reg.
*****************************
M/s. Mahi International (IEC No. 1313019500) having address at F/229, 2nd
Floor, City Centre, Idgah Circle, Ahmadabad – 380016, Gujarat (hereinafter
referred to as ‘the importer’) has filed a Bill of Entry No. 8387447 dated
22.04.2022 (RUD-1) for import and clearance of 38 Sets of “Network Module”
Model No. 217-22 (18 Nos.) and Sr. No. 8801012475 (20 Nos.) of Brand
“SUPERMICRO’ along with its accessories (hereinafter referred to as ‘the goods’)
through their CB firm M/s. Razvi Shipping Agency (CB No. 11/314; PAN No.
AAEFR3124LCH001) (hereinafter referred to as ‘the CB firm’). The goods were
imported as per Invoice No. YTHL/007/2022 dated 31.03.2022 from M/s. Yinguha
Trade (Hongkong) Company Ltd., Hong Kong for an Invoice Value of US$ 2280.00
(FOB) (Unit Price of US$ 60.00). The goods were classified under CTH 85177990
attracting duty @ 15% BCD + 18% IGST. The declared Assessable Value of the
goods was ₹2,13,062/- and duty leviable thereon was ₹ 79,834.10/-.

2. ADG/NCTC, Mumbai vide an E-Mails dated 23.04.2022 and trailing mail

dated 22.04.2022 (RUD-2) addressed to the Commissioner of Customs (III), ACC,
Mumbai, informed that on the basis of detailed risk-analysis, the NCTC has
identified B/E No. 8387447 dated 22.04.2022 filed at ACC, Mumbai appears to be
a risky consignment in relation to mis-declaration and concealment; that the B/E
has been filed after a delay attracting fine of ₹ 1,95,000/-; that furthermore RMS
has also prescribed 100% examination for the B/E to ascertain any concealment,
mis-declaration, valuation and IPR violation. Therefore it is requested to conduct
thorough and detailed 100% examination of the consignment to verify the risk
factors as detailed above. Accordingly, the said consignment imported vide B/E
No. 8387447 dated 22.04.2022 was kept on hold vide letter dated 23.04.2022
(RUD-3) and 100% examination of the goods was carried out under Panchanama
dated 26.04.2022 (RUD-4) by the officers of SIIB (I), ACC in presence of two
independent Panchas and Shri Manish Joshi, employee of CB firm. Details of
goods found during the course of Panchanama is tabulated herein below:
TABLE – 1
Sr Marks Qty. Descripti Brand Qty.dec Qty. found Model No.
. declare of on of declared lared in during
d on Pkgs goods on the the B/E examinatio
Pkgs. . found goods n
during
the
 examinat
ion
1 A 18 18 18 21-722
Network Supermicr
CBL-PWCD-0249-
2 B 20 Module o 20 20
LW

2.1. During examination, it appears that there is no concealment and no mis-

declaration w.r.t. description and quantity of the goods. However, it was found
that the goods were appearing to be branded with “SUPERMICRO” Brand and
would more appropriately referred to as “SERVERS”. It appeared that Unit Value
of US$ 60.00 is too low and required to be ascertained from the NIDB data or
Market Survey.

2.2. As per information given by NCTC, applicability of BIS on goods, valuation

and IPR Angle have been noticed during the examination of the goods. The BIS
No. R-41030724 is mentioned on the Network Module Server having Model No.
21722.

2.3. In order to ascertain the value of the goods, they were examined 100% and
sample Photographs of the goods and its accessories are taken. The goods were
found to be Network Module bearing brand name Supermicro.

3. STATEMENTS:

3.1. In furtherance of investigation, to gather evidence a Summon No.

HS/24/2022-23 dated 06.05.2022 was issued to the Proprietor of the importing
firm directing him to appear before the Investigating Officer for giving evidence on
09.05.2022. In response, Shri Vijay Babulal Bhansali, IEC holder of the importing
firm appeared before the Investigating Officer on 10.05.2022, whose statement
was recorded u/s. 108 of the Customs Act, 1962 (RUD-5), wherein, he inter alia
stated that:
(i) that mentioned Bill of Entry has been filed by Custom Broker on behalf of
M/s. Mahi International as per invoices provided by the supplier M/s.
Yinghua Trade (Hongkong) Company Ltd.;

(ii) that their GST No. is 24ABLPM8841P1ZW and filed the GST Return and the
same for last two (2) years is being submitted for reference;

(iii) that their Current Account is 9612922625 in Kotak Mahindra Bank,

Ahmadabad, Gujarat; that he shall provide his bank remittance details by
17.05.2022;

(iv) On being asked to provide mail trail with CB firm, he stated that he don’t
have mail trail with him at this time but he will provide the same by
17.05.2022;

(v) On being asked to provide the invoice/purchases order/mail trail with the
Supplier, he stated that he don’t have these with me at this time but I will
provide the same by 17.05.2022;

(vi) On being asked whether he has E-waste certificate, he stated that he has
the E-waste certificate and I am submitting photocopy of the same;
(vii) On being asked what are the handling charges of the CB firm and who paid
the Customs duty for the consignment, he stated that they have been
giving the handling charges of Rs. 6000/- per shipment to the CB for
clearing the goods from Custom Authority and Customs duty is to be paid
yet for the consignment;

(viii) On being asked to whom he is going to sell the imported goods and what
are the use of the imported goods, he stated that he receives purchase
orders from local market verbally then he places the order to his foreign
suppliers. He has imported the goods on request of his client and as far as
he knows these goods are the parts of some other machines;

(ix) On being asked how many consignments they had imported in the past, he
stated that they have imported Steel items earlier in 4 years but as far as
these goods are concerned, they have imported these for the first time;

(x) On being asked to provide the catalogue/literature of the goods and asked
how did he contact his foreign supplier M/s. Yinghua Trade (Hongkong)
Company Ltd and how did he place his order for import of the goods, he
stated that he don’t have the catalogue/literature of the imported goods;
that he contacted to his supplier M/s. Yinghua Trade (Hongkong) Company
Ltd. through his friend namely, Shri Rajeev Chopra in the early 2019; that
he placed the order to the supplier via E-mail at booking@newayhk.com;

(xi) On being informed that Department has examined the goods covered under
Bills of Entry No. 8387447 dated 22.04.2022 under Panchanama dated
26.04.2022 and shown him the copy of Panchanama and asked what he to
say about it, he seen the Panchanama dated 26.04.2022 for Bill of Entry No.
8387447 dated 22.04.2022 along with the annexure and put up his dated
signature on it in token of being seen the same.

(xii) On being asked whether they have BIS Certification and WPC/ETA
Certificate for import of Network Module/Server, he stated that he don’t
have the same with him but he will provide it by 17.05.2022;

(xiii) On being asked whether he is aware about market survey conducted in this
case, he replied that Yes, he aware that a Market Survey was conducted on
06.05.2022 at Lamington Road, Mumbai in presence of their representative
and they agree to the value ascertained in that Market Survey;

(xiv) On being asked whether he agrees with the fact that the goods are
undervalued in subject Bill of Entry, he replied that the value of the goods is
as per the invoice of the overseas supplier. A Market Survey was conducted
by the Department in the presence of their representative to ascertain the
value of their goods.

3.2 A Summon No. HS/23/2022-23 dated 06.05.2022 was issued to the

Proprietor of the CB firm directing him to appear before the Investigating Officer
for giving evidence on 10.05.2022. In response, Shri Manish P. Joshi, ‘G’ Card
holder of the CB firm M/s. Razvi Shipping Agency (CB PAN No. AAEFR3124LCH001)
appeared before the Investigating Officer on 13.05.2022, whose statement was
recorded u/s. 108 of the Customs Act, 1962 (RUD-7), wherein, he inter alia stated
that:
(i) he is G-card holder of M/s Razvi Shipping Agency, Customs Broker, who had
filed Bill of Entry 8387447 dated 22.04.2022 on behalf of M/s Mahi
International (IEC No. 1313019500);

(ii) On being asked he was summoned on 10.05.2022 for recording of his

statement under Section 108 of Customs Act, 1962 but he didn’t present
himself for the same, what do he have to say about that, he replied that he
was suffering from cold and fever, therefore, he was not able to attend for
recording the statement on 10.05.2022;

(iii) that M/s. Razvi Shipping Agency has one Current Bank Account having No.
0452102000016232 in IDBI Bank, Venkatesh Chambers, Prescot Road, P.B.
No. 714, Fort, Mumbai – 400 001;

(iv) that they are involved in the work of Custom Broker; that M/s. Razvi
Shipping Agency is a Proprietorship firm. Proprietor of the firm is Shri Shah
AlamQuraishi; that their firm has 4 employees in Mumbai; that M/s Razvi
Shipping Agency has started working in Mumbai as Customs Broker in 2016;

(v) that Bill of Entry No. 8387447 dated 22.04.2022 was filed by them on behalf
of M/s. Mahi International. All the documents related to M/s Mahi
International were forwarded to them by Shri Vijay Babulal Bhansali; that
Shri Vijay Babulal Bhansali, who is Manager of M/s. Mahi International
informed them that he (Bhansali) would pay them Rs. 6,000/- as agency
charges for clearing goods from Customs;

(vi) that they have filed only three Bills of Entry on behalf of M/s. Mahi
International i.e. B/E No.8384673 dated 22.04.2022, 8387447 dated
22.4.2022 and 8375708 dated 22.04.2022;

(vii) It is being informed that the goods imported vide Bill of Entry No. 8387447
dated 22.04.2022 was examined under Panchanamadt. 26.04.2022. He was
shown copy of Panchanama along with the inventory of goods drawn he
signed the same in token of being seen. He further stated that he had filed
Bill of Entry no. 8387447 dated 22.04.2022 on the basis of Invoice, Packing
List and Air Way Bill forwarded by Shri Vijay BabulalBhansali;

(viii) On being asked about the payment and other charges for the said
consignment, he replied that duty has not been paid yet for the above said
consignment;

4. As the goods found to be mis-declared in terms of its value, the same were
seized under Seizure Memo dated 25.05.2022 (RUD-8) under the provisions of
Section 110 (1) of the Customs Act, 1962, under a reasonable belief that the same
are liable for confiscation under the provisions of the Customs Act, 1962.

5. Since the value of the 38 Sets of Network Module was found to be

₹1,75,902/- (FOB) works out to be ₹ 4,629/- per set, which appears to be very low.
Therefore, it appears to be mis-declared therefore, there was reasonable doubt
about the truth and accuracy of the value of the consignment declared. For the
purpose of Customs Tariff Act, 1975, valuation of imported goods is to be done in
terms of Section 14 of the Customs Act, 1962 read with Customs Valuation
(Determination of Value of Imported Goods) Rules, 2007 (‘CVR, 2007’ in short).
Being the value appears to be mis-declared, the same is liable for rejection under
Rule 12 of the CVR, 2007. Therefore, the valuation of goods needed to be re-
determined in chronological order as per Rule 3(4) of CVR, 2007.

5.1. Rule 3(4) of CVR Rules, 2007 provides for determination of value
by proceeding sequentially through Rules 4 to 9 ibid. In the instant case, since
the value of the imported goods were found to be quiet low, a search of NIDB was
done, however, no contemporaneous imports were noticed, therefore, valuation of
the goods could not be done in terms of Rule 4, 5 and 6 of the CVR, 2007 as the
contemporaneous import data could not be found for identical goods and similar
goods. As far as valuation under Rule 7 is concerned it is stipulated that if the
goods being valued or identical or similar imported goods are sold in India, in the
condition as imported at or about the time at which the declaration for
determination of value is presented, the value of imported goods shall be based
on the unit price at which the imported goods or identical or similar imported
goods are sold in the greatest aggregate quantity to persons who are not related
to the sellers in India, however as no contemporaneous data of similar/identical
goods are available valuation cannot be done under Rule 7 of CVR, 2007. As far
as valuation under Rule 8 is concerned, the said rule stipulated that the value of
imported goods shall be based on a computed value, which shall consist of the
sum of: (a) the cost or value of materials and fabrication or other processing
employed in producing the imported goods; (b) an amount for profit and general
expenses equal to that usually reflected in sales of goods of the same class or
kind as the goods being valued which are made by producers in the country of
exportation for export to India. As the data for cost or value of materials and
fabrication of the impugned goods is not available, the determination of value
under Rule 8 is not possible. Therefore, it is proposed to determination of value
under Rule 9, viz. Residual Method which stipulates that where the value of
imported goods cannot be determined under the provisions of any of the
preceding rules, the value shall be determined using reasonable means consistent
with the principles and general provisions of these rulesandon the basis of data
available in India. Hence, to ascertain the value of the goods Market Survey was
proposed.

5.2. Accordingly, the officer of SIIB(I), ACC along with the Shri Manish P. Joshi, G
Card holder of CB firm conducted market enquiry at Lamington Road, Mumbai on
06.05.2022, however, on being shown the Model Nos. of Network Servers, to the
local shopkeepers, they informed that such machines and model Nos. are not
being available for sale with them. Therefore, it appeared that the value cannot
be determined in the Market Survey. Thereafter, to ascertain value of the goods,
which are basically machines, services of Government Empanelled Chartered
Engineer, M/s. Sai Siddhi Associates was availed for inspection and evaluation of
the imported goods. The goods were inspected by Shri Lakesh R. Pawar, CE on
26.05.2022 and submitted their Certificate Ref. No. SAI-CEC/Razvi Shipping-Mahi
 International/069/2022-23 dated 02.07.2022 (RUD-9), whereby, the value of the
Network Servers are suggested, same are tabulated herein below:
TABLE –2
Re- Re-
Re-
Value determin determin
Value Assessabl determined
Item Declare ed Value ed
Declare e Value Value
Descripti Qty. d per suggeste Assessab
d (in declared suggested by
on piece d by CE le Value
US$) (₹) CE per piece
(in US$) in US$ (₹)
(in US$)
(Approx)
New
Network
18
Module 60 1080.00 1,550 27,900 22,04,100/
Nos.
Model No. -
217-22
2,13,061.3/
New
-
Network
Module 20 23,500 18,56,500/
60 1200.00 1,175
Model No. Nos. -
LA25TQC-
R609LP
51,400/- 40,60,60
TOTAL 36 2,13,062/-
0/-

5.3. The CE in its Report certified that the impugned goods are Super Servers
and the same should be classified under CTH 84714900 and the Effective Rate of
Duty(BCD) will be Nil.

6. In view of the facts above, the details of declared value and re-determined
value of the goods imported vide B/E No. 83874473 dated 22.04.2022, is
tabulated as below:

TABLE –3

Re-
Value Re-
Assessabl Re- determine
Decla determine
e Value Declared determine d
Item Description Qty. red d Duty
declared Duty (₹) d Value Assessabl
(in (₹)(IGST
(₹) (in US$) e Value
US$) @18%)
(₹)
New Network
18
Module 1550 .00 22,04,100/- 3,96,738/-
Nos.
Model No. 217-22
2,13,061.3/ 79,834.10/
New Network 60.00
- -
Module 20
1175.00 18,56,500\- 3,34,170/-
Model No. LA25TQC- Nos.
R609LP
40,60,600/
TOTAL 2,13,062/- 79,835/- 7,30,908/-
-

6.1. Accordingly, the duty on the re-determined value for the above said B/E
works out to be ₹ 40,60,600/- (Approx.) as against declared value of ₹ 2,13,062/-
and the re-determined duty for said B/E works out to be Rs. 7,30,908/- as against
declared duty of Rs. 79,834.10/-. Therefore, differential duty short levied works
out to ₹ 6,51,073/- required to be recovered from the importer.

7. Consequent upon amendment to the Section 17 of the Customs Act, 1962

vide Finance Act, 2011, ‘Self-Assessment’ has been introduced in Customs.
Section 17 of the Customs Act, effective from 08.04.2011, provides for self-
assessment of duty on imported goods by the importer himself by filing a Bill of
Entry, in the electronic form. Section 46 of the Customs Act, 1962 makes it
mandatory for the importer to make entry for the imported goods by presenting a
Bill of Entry electronically to the proper officer. As per Regulation 4 of the Bill of
Entry (Electronic Declaration) Regulation, 2011 (issued under Section 157 read
with Section 46 of the Customs Act, 1962) the Bill of Entry shall be deemed to
have been filed and self-assessment of duty completed when, after entry of the
electronic declaration (which is defined as particulars relating to the imported
goods that are entered in the Indian Customs Electronic Data Interchange System)
in the Indian Customs Electronic Data Interchange System either through ICEGAT
or by way of data entry thorough the Service Centre. Thus, under self-
assessment, it is the importer who has to ensure that he declares the correct
classification, applicable rate of duty, value, benefit of exemption notifications
claimed, if any, in respect of the imported goods while presenting the Bill of Entry.
However, the facts as stated above occurrence appear to reveal wilful mis-
declaration w.r.t. value of the goods with an ulterior motive to evade the
applicable Customs duties. Therefore, in the instant case, the differential
Customs Duty short levied is liable to be recovered from the importer under the
provisions of Section 28 (1) of the Customs Act, 1962 along with applicable
interest in terms of Section 28AA of the Customs Act, 1962.

8. RELEVANT PROVISIONS OF LAW APPLICABLE IN THE SUBJECT CASE

The relevant provisions of law relating to import and valuation of goods in general,
the Policy and Rules relating to imports, the liability of the goods to confiscation
and the persons concerned are liable to penalty for illegal importation under the
provisions of the Customs Act, 1962;Customs Valuation Rules, 2007 and any other
laws for the time being in force are summarized as under:-
8.1. The Customs Act, 1962 :
(A) Section 17 (1) provided for self-assessment of duty on
imported goods by the Importer himself by filing a Bill of Entry.
Under this mode of self-assessment, the Bills of Entry were self-
assessed by Importer, with regard to correctness of
classification, value, rate of duty, exemption notification or any
other relevant particular having bearing on correct assessment
of duty on import;

(B) Section 28 of the Customs Act, 1962:

(1) When any duty has not been levied or has been short-levied
or erroneously refunded, or when any interest payable has not
been paid, part paid or erroneously refunded, the proper officer
may:

(a) in the case of any import made by any individual for his
personal use or by government or by any educational, research
or charitable institution or hospital, within one year;

(b) in any other case, within six months from the relevant
date, serve notice on the person chargeable with the duty or
interest which has not been levied or charged or which has been
so short levied or part paid or to whom the refund has
 erroneously been made, requiring him to show cause why he
should not pay the amount specified in the notice.

Provided that where any duty has not been levied or has been
short levied or the interest has not been charged or has been
part paid or the duty or interest has been erroneously refunded
by reason of collusion or any willfulmis-statement or suppression
of facts by the importer or the exporter or the agent or
employee of the importer or exporter, the provisions of this sub-
section shall have effect as if for the words “one year” and “six
months”, the words “five years” were substituted.

(C) Section 28AA of the Customs Act, 1962:

(1) Notwithstanding anything contained in any judgment,
decree, order or direction of any court, Appellate Tribunal or any
authority or in any other provision of this Act or the rules made
thereunder, the person, who is liable to pay duty in accordance
with the provisions of section 28, shall, in addition to such duty,
be liable to pay interest, if any, at the rate fixed under sub-
section (2), whether such payment is made voluntarily or after
determination of the duty under that section.

(D) Section 46 (4) states that the Importer ‘While presenting a Bill
of Entry shall at the foot thereof make and subscribe to a
declaration as to the truth of the contents of such Bill of Entry
and shall, in support of such declaration, produce to the proper
officer the invoice, if any relating to the imported goods’;

(E) Section 46 (4A) states that the importer who presents the Bill
of Entry shall ensure (i) the accuracy and completeness of the
information given therein; (ii) the authenticity and validity of any
documents supporting it; and (iii) compliance with the restriction
or prohibition, if any, relating to the goods under the Customs
Act, 1962 or under any other law for the time being in force.

(F) The relevant Sub-sections of Section 111 of the Indian Customs

Act,1962 attracted in the instant case making the impugned
goods liable for confiscation are :

Section 111(m) states that any goods which do not correspond

in respect of value or in any other particular with the entry
made under this Act;

(G) Section 112 provides that any person-

(a) who, in relation to any goods, does or omits to do
any act which act or omission would render such goods liable to
confiscation under Section 111, or abets the doing or omission
of such an act, or
(b) who acquires possession of or is in any way concerned in
carrying, removing, depositing, harbouring, keeping, concealing,
selling or purchasing, or in any other manner dealing with any
goods which he knows or has to believe are liable to confiscation
under Section 111,shall be liable to penalty for improper
importation of the goods.

(H) Section 114A of the Customs Act, 1962: provides that where
the duty has not been levied or has been short levied or the
interest has not been charged or paid or has been part paid or
the duty or interest has been erroneously refunded by a reason
 of collusion or any willful mis-statement or suppression of facts,
the person who is liable to pay the duty or interest as the case
may be as determined under Sub Section (2) of Section 28 of
the Customs Act, 1962 shall also liable to pay a penalty equal
to duty or interest, so determined.

8.2. Customs Valuation (Determination of Value of Imported Goods)

Rules, 2007:
(A) Rule9.Residual method. —
(1) Subject to the provisions of rule 3, where the value of
imported goods cannot be determined under the provisions
of any of the preceding rules, the value shall be determined
using reasonable means consistent with the principles and
general provisions of these rulesand on the basis of data
available in India;
Provided that the value so determined shall not exceed the
price at which such or like goods are ordinarily sold or
offered for sale for delivery at the time and place of
importation in the course of international trade, when the
seller or buyer has no interest in the business of other and
price is the sole consideration for the sale or offer for sale.
(2) No value shall be determined under the provisions of'
this rule on the basis of —
(i) the selling price in India of the goods produced in
India;
(ii) a system which provides for the acceptance for
customs purposes of the highest of the two alternative
values;
(iii) the price of the goods on the domestic market of the
country of exportation;
(iv) the cost of production other than computed values
which have been determined for identical or similar goods in
accordance with the provisions of rule 8;
(v) the price of the goods for the export to a country
other than India;
(vi) minimum customs values; or
(vii) arbitrary or fictitious values.
(B) Rule 12. Rejection of declared value. -
(1) When the proper officer has reason to doubt the truth or
accuracy of the value declared in relation to any imported
goods, he may ask the importer of such goods to furnish
further information including documents or other evidence
and if, after receiving such further information, or in the
absence of a response of such importer, the proper officer still
has reasonable doubt about the truth or accuracy of the value
so declared, it shall be deemed that the transaction value of
such imported goods cannot be determined under the
provisions of sub-rule (1) of rule 3.

9. In view of the facts and provisions stated in paras supra, it appears that
M/s. Mahi International filed the impugned Bill of Entry No. 8387447 dated
22.04.2022 for the clearance of goods mentioned in foregoing paras, the goods
imported under the aforesaid Bill of Entry appeared to be mis-declared in terms of
its value (as detailed in Table-2 above). M/s, Mahi International had imported the
consignment covered under Bill of Entry No. 8387447 dated 22.04.2022 having
the declared Assessable Value of ₹2,13,062/- and declared total duty amounting
to ₹79,834.10/-. However, re-determined value of the consignment works out to be
₹40,60,600/- (Approx.) on the basis of CE Certificate. Accordingly, the actual duty
payable for the impugned consignment arrives at ₹ 7,30,908/- (Approx.) -
resulting in a Differential Duty amounting to ₹ 6,51,073/-, which the importer had
sought to evade and the same is recoverable from them.

10. Hence, M/s. Mahi International by the above stated acts of omissions and
commissions had rendered the impugned goods liable for confiscation under
Section 111(m) of the Customs Act, 1962 and liable for penalty under Section 112
(a) and/or Section 114A of the Customs Act, 1962.

11. RECOMMENDATIONS: In view of the facts above, following

recommendations have been made:
(i) The declared Assessable value of the impugned consignment at ₹2,13,062/-
should be rejected under Rule 12 of CVR, 2007 and re-determined at ₹
40,60,600/- (Rupees Forty Lakh Sixty Thousand Six Hundred only) under
Rule 9 of the Rules ibid and assess the B/E accordingly;

(ii) Goods imported by M/s. Mahi International vide Bill of Entry No. 8387447
dated 22.04.2022 having re-determined value of ₹ 40,60,600/- should be
held liable for confiscation under the provisions of Section 111(m) of the
Customs Act, 1962;

(iii) The differential duty amounting to ₹ 7,30,908/- (Rupees Seven Lakh Thirty
Thousand Nine Hundred Eight only) should be demanded and
recoveredunder Section 28(1) of the Customs Act, 1962 for the reasons
discussed herein above;

(iv) Interest, as applicable, on the demanded Customs Duty should be

recovered from the importer under the provision of Section 28AA of the
Customs Act, 1962;

(v) Penalty should be imposed on M/s. Mahi International under the provisions
of Sections 112 and/or 114A of the Customs Act, 1962;

12. The findings of this Investigation Report are limited to Bill of Entry No.
8387447 dated 22.04.2022 filed by CB firm M/s. Razvi Shipping Agency on behalf
of M/s. Mahi International, Ahmedabad, Gujarat.

13. This Investigation Report is issued without prejudice to any other action that
may be taken in respect of the goods in question and/or against the person(s)
concerned or any other person, if found involved under the provisions of Customs
Act, 1962 and / or any other law for the time being in force in India.

14. This IR is issued without prejudice to the right of the department to modify
and/or amend the same and declare additional evidences in support of the
allegations.

15. The details of Relied upon Documents (RUDs) is listed as per Annexure-A to
this Investigation Report. Copies of the said RUDs are enclosed for ready
reference.
16. This issues with the approval of the Commissioner of Customs (Import),
Mumbai Customs Zone – III, ACC, Mumbai.

(RAHUL DHINGRA)
Deputy Commissioner of Customs,
SIIB (I), ACC, Mumbai.
Encl. : RUDs as per Annexure A.

ANNEXURE A

LIST OF RUDs

SR.NO NAME OF DOCUMENTS

RUD 1 Copy of Bill of Entry No. 8387447 dated 22.04.2022 and other relevant documents
Copies of E-Mails dated 23.04.2022 and trailing mail dated 22.04.2022 received from
RUD 2
ADG/NCTC, Mumbai
RUD 3 Copy of letter dated 23.04.2022 whereby goods were kept on hold
RUD-4 Copy of Panchanama dated 26.04.2022
RUD-5 Copy of Photographs of Network Servers and its Accessories
Copy of statement of Shri Vijay BabulalBhansali, IEC holder of the importing firm M/s.
RUD-6
Mahi International recorded on 10.06.2022
Copy of statement of Shri Manish P. Joshi, ‘G’ Card holder of the CB firm M/s. Razvi
RUD-7
Shipping Agency recorded on 13.05.2022
RUD-8 Copy of Seizure Memo dated 25.05.2022
Copy of CE Certificate Ref. No. SAI-CEC/Razvi Shipping-Mahi International/069/
RUD-9
2022-23 dated 02.07.2022