TaxTMI 
TaxTMI 
2019 (10) TMI 642
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....ected declared Free on Board (for short 'FOB') value of the goods exported during 2007-08 to 2012-13 (upto April' 2012) and duty drawback incentive availed at the time of export has been demanded and ordered to be recovered under Rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (for short 'Drawback Rules, 1995'). FACTS: 2. The few facts emanating from record are that in CWP No. 702 of 2017 the Petitioner No. 1 & 2/Manufacturer Exporters during 2007-2008 to 28.4.2012 exported textile goods claiming benefit of duty drawback as permissible under Duty Drawback Rules, 1995, which were framed vide Notification No. 37/95-CUS (NT) dated 26.05.1995 in exercise of power conferred by Section 75 of Customs Act, 1962 (for short '1962 Act'), Section 37 of the Central Excise Act, 1944 and Section 93A (relating to Service Tax) of the Finance Act, 1994. As required under Section 50 of the 1962 Act, the Petitioners as and when exported goods filed shipping bill declaring description, quantity, value, name of foreign buyer etc. A team of Custom Officers i.e. Inspector, Superintendent and Assistant Commissioner physically verified export goods and not....
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.....11.2016 (Annexure P-9). 3. Mr. Jagmohan Bansal, Counsel for the Petitioners has raised three issues, namely, (i) Reasonable period of limitation to issue show cause notice (ii) Absence of mechanism to raise demand of duty drawback, and (iii) Power of Respondent to reassess value of goods already exported. 4. After having scrutinized record of the case and heard arguments of both sides, we find that issues raised in present petitions are squarely covered by our judgment dated 20/09/2019 rendered in CWP No.5111 of 2018 titled Famina Knit Fabs Vs UOI & Ors. reported as 2019-TIOL- 2208-HC-P&H-CUS. 5. In the present writ petitions, identical questions as in Famina Knit Fabs (Supra) are raised except question of effect of repeal of Drawback Rules, 1995 w.e.f. 01.10.2017. In the present cases, show cause notice dated 4.9.2014 (Annexure P-6) and order-in-original dated 25.11.2016 (Annexure P-9) came to be issued/passed prior to repeal of Drawback Rules, 1995 with effect from 1.10.2017. 6. In Famina Knit Fabs (Supra), we have held that inspite of availability of alternative remedy available under 1962 Act, writ petition is maintainable in view of involvement of pure questions o....
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....not sustainable in the eye of law and deserves to be quashed. 8. We find that present case is squarely covered by our detailed findings recorded in Famina Knit Fabs (Supra), qua question of reasonable period of limitation and absence of mechanism to declare already paid drawback as excess and demand/recovery thereof. While passing judgment in the case of Famina Knit Fab (Supra), we had left open question of power of Respondent to reassess value of goods already exported and re-determine entitlement of duty drawback. Judgment of the present petition was reserved on 05.09.2019, however Mr. Jagmohan Bansal on 20.9.2019 pointed out judgment dated 18.9.2019 of Hon'ble Supreme Court in the case of ITC Vs CCE 2019- TIOL-418-SC-CUS-LB to support his contention that Respondent has no power to reassess value of goods already exported and Rule 16 of Drawback Rules, 1995 is sort of execution proceeding. He further contended that in view of recent enunciation of law by Hon'ble Supreme Court, issue involved may be decided as it is pure question of law. In view of enunciation of law by Hon'ble Supreme Court, we deem it appropriate to deal with question of power of Respondent to re-assess sh....
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.... As per Section 2(19) of the Customs Act, 1962 "Export Goods" means any goods which are to be taken out of India to a place outside India. On the question of power to reassess value of goods already exported, Mr. Sourabh Goyal contended that as per definition of phrase 'Drawback' and 'Export' provided under Drawback Rules, 1995 Drawback is granted on account of export of goods so value can be rejected even after the goods have left India. Demand of drawback can be raised only after export of goods so department has right to re-determine value even after export of goods thus contention of Petitioner is fallacious. Drawback is consequential to export of goods and department as per Valuation Rules has power to reject already assessed value and re-assess value thereof. Mr. Bindlish contended that DRI has been vested with power of assessment under Section 17 of the Act, 1962 so DRI has power to reopen any assessment and to conduct examination or test which it deems necessary. There is no provision which debars DRI to reopen the assessment and to conduct necessary examination. The DRI had made thorough investigation wherein it was found that Petitioner had mis-declared value of exp....
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....ring any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods. (2) The proper officer may verify the self-assessment of goods and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary: (3) For verification of self-assessment under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker's note, insurance policy, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-ass....
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....er to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information. (4) Notwithstanding anything in this section, imported goods or export goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section(3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or documents or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. (5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefore under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said ....
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....'imported goods' is determined. 11. The entire issue raised by Petitioner revolves around the definition of 'export goods' and application of Valuation Rules, 2007 to exported goods i.e. goods which have already been taken out of India. 'Assessment'; 'export'; 'export goods' and 'imported goods' have been defined under Section 2 of Customs Act, 1962. Relevant Sections are extracted as under:- " Customs Act, 1962 Section 2(2) "assessment" includes provisional assessment, selfassessment, re-assessment and any assessment in which the duty assessed is nil. Section 2(18) "export" with its grammatical variations and cognate expressions, means taking out of India to a place outside India; Section 2(19) "export goods" means any goods which are to be taken out of India to a place outside India; Section 2(25) "imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. It is apparent from above definition of 'export goods' that the goods which have already been taken out of India do not remain export goods instead are referable as exported goods. The definition....
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.... the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the purposes of this section - (a) "rate of exchange" means the rate of exchange - (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;....
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....icer is satisfied about the truth or accuracy of the declared value after the said enquiry in consultation with the exporter. (iii) The proper officer shall have the powers to raise doubts on the declared value based on certain reasons which may include - (a) the significant variation in value at which goods of like kind and quality exported at or about the same time in comparable quantities in a comparable commercial transaction were assessed. (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the misdeclaration of goods in parameters such as description, quality, quantity, year of manufacture or production. Emphasis Supplied From above quoted Rules, it is apparent that transaction value of imported and export goods is the thumb rule to determine duty payable, however declared value may be rejected and proper officer may redetermine value applying Valuation Rules, 2007. Rule 1(3) provides that Valuation Rules, 2007 are applicable to 'export goods' and not goods which have already been taken out of India. 13. As per Rule 16 of Drawback Rules, 1995 Claimant (E....
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.... mistake or otherwise. Order of self assessment qua Bill of Entry is an appealable order and Revenue as well Assessee may prefer an appeal against order of self assessment. The provisions of Section 27 cannot be invoked in the absence of amendment or modification having been made in the Bill of entry on the basis of which self assessment has been made and the refund proceedings are in the nature of execution for refunding amount. Reassessment is permitted only under Section 17(3) (4) & (5) of the 1962 Act. It will virtually amount to an order of assessment or reassessment in case Assistant Commissioner or Deputy Commissioner while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27 of the 1962 Act. Relevant Para 41-44, 47 of the judgment in ITC Vs. CCE case (Supra) are reproduced as under: " 41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It ....
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.... passed under section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra). 44. The provisions under section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re-assessment is not permitted n....
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.... 1995 is also in the nature of execution proceedings thus an officer even higher in rank than proper officer, who framed assessment at the time of export, cannot modify a shipping bill qua value and consequent entitlement of duty drawback while issuing notice or passing order under Rule 16 of the Drawback Rules, 1995. The contention of the counsel for Respondents that as per Valuation Rules, 2007 proper officer has power to re-assess value of goods even though already exported is untenable. As noted in Famina Knit Fab (Supra) and hereinabove, Valuation Rules are applicable to 'export goods' and these Rules are not enabling provisions to frame re-assessment. Section 14 empowers to frame Rule to reject declared value and re-determine value of export goods. The Valuation Rules, 2007 are framed in exercise of power conferred by Section 14 of 1962 Act. Rule 1(3) and 8 of Valuation Rules permit to reject value of 'export goods'. As per definition of export goods, the goods which stand exported are not 'export goods' so Valuation Rules, 2007 are not applicable to goods already exported. Valuation Rules, 2007 would come into play as soon as the proper officer gets power to reassess already....