TaxTMI 
TaxTMI 
2022 (11) TMI 1238
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....ve discussions, I modify the order-in-original under section 128A (3)(a) of the Customs Act, 1962. I reduce the quantum of redemption fine from Rs. 6,00,000/ to Rs 4,00,000(Rupees Four Lakh only). Further I anull the penalty of Rs. 6,100/- imposed on Shri Manish Shah, proprietor of M/s Swastik Creation. Rest of the Order-in-Original is upheld." 1.2 Additional Commissioner has held as follows: "21. In view of the above findings I pass the following order: ORDER (i) I reject the declared CTH of goods under Bill of Entry No. 5520389 dated 01.11.2019 and order the goods to be classified under CTH 7104 9090. (ii) I reject the value of the impugned goods imported vide B/E no. 5520389 dated 01.11.2019 declared at Rs. 60,049 under Rule 12 of Customs Valuation Rules 2007 and re-determine the same at Rs. 11,14,752/- under Rule 5 and Rule 9 of Customs Valuation Rules, 2007 as discussed in para 17 and 18 above. (iii) I order for confiscation of goods under Bill of Entry No. 5520389 dt. 01.11.2019 having declared value of Rs. 60,049/- and re-determined value of Rs. 11,14,752/- under Section 111 (m) of the Customs Act,....
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....) 3.86 8.00 30.88 9 Glass Stone Round(Size 2.5mm) 8.37 8.00 66.96 10 Glass Stone Pear Oval(Size5*7,6*8 mm) 16.35 8.00 130.80 Total 103.55 830.56 2.2 During the course of examination of the consignment, RSS was forwarded to Gemological Institute of India (GII) for identification. After receiving the test report from GII, the panel member had given his report as under: "I have seen the report of GII laboratory dtd. 11.11.2019. Declaration of the product as Glass Stones by importer is wrong for all the lots, based on the lab report. Lot No. 1 to 8 and 10 are cut & polished synthetic Cubic Zirconia. Declared price at 8$/Ct is very low. For Customs duty purpose, it should be taken as 40 USD/Ct. Lot no, lot No. 9 is identified as Synthetic rubiesCut and Polished (round), Weighing 8.37kg. This lot for Customs duty purpose be taken as 125 USD/KG." 2.3 The goods under lot 1 to 8 and lot 10 of invoice are found to be Cubic Zirconia (cut and polished), classifiable under CTH 71049090 The goods under lot no. 9 of the invoice are found to be synthetic ruby classifiable under CTH 7104....
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.... as well as Natural. Also, the definition of similar goods" provided under rule 2(f) of CVR, 2007 is completely overlooked for revaluing the goods under rule 5 of CVR, 2007. • The adjudicating authority has simply mentioned the numbers or + bills of entry in the subject order. • The Appellant declared the description correctly and the classification in 71031029 with similar rate of duty in 'SYNTHETIC RUBY' and even higher rate of duty in case of 'SYNTHETIC CUBIC ZIRCONIA'. Therefore, no mens rea to evade duty, hence no confiscation and penalty. • No extra sale consideration was paid by the appellant. The adjudicating authority and appellate authority ignored these facts. Therefore, keeping in view of the legal position and the spirit of the law, the transaction values declared ought to be accepted without any loading and the baseless loading may please be set aside. • Public Notice 30/2018 issued by commissioner of Customs Airport special cargo categorically says that report of the PANEL shall be accepted by department. The Panel member's value of Rs. 2892/( USD 40/Kg) of Item 1 to 8 & 1....
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.... check assessment. The adjudicating authority and first appellate authority did not consider the legal and facts of the case properly. • The importer is not at all involved in any forgery. Further penalty under 114AA is applicable only in case of exports so no penalty under 114AA can be imposed, as has been held in the following cases:- • Interglobe Aviation Ltd. [2022 (379) ELT 235 (T- Bang)] • Sri Krishna Sounds and Lightings [2019 (370) ELT 594 (T)] 3.3 Arguing for the revenue learned authorized representative while re-iterating the findings recorded in the impugned order submits: • When the panel expert of GII examined the RSS it was confirmed that the goods are wrongly declared as Glass stones.. they are actually cut and polished Cubic Zirconia and Synthetic Ruby both classifiable under CTH 71049090. • The Appellant in a letter dated 04.12.2019accepted and admitted the valuation done by the department and the applicable duty on the subject goods amounted to Rs 68,422/- as against the declared duty of Rs 6,772/-. Thus the differential duty was Rs 61,650/ • The value of the goods d....
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....Principal Bench of CESTAT, Delhi and held that section 114AA is imposable • The language of section 114AA is explicitly clear and unambiguous by the plain reading of it. Reliance is place on following decisions of Hon'ble Apex court on the Interpretation of Statutes. • Doypack Systems 9pvt) Ltd. [1988 (36) ELT 204 (SC)] • Dilip Kumar and Company [2018 (361) ELT 577 (SC)] • In view of the decision in case S.D. Overseas Tribunal upholding section 114AA The two case laws cited by the Ld counsel for the Appellants cannot advance the case of appellant. The two Apex court judgments on Interpretation of statutes, clearly held that the language of the legislation is more important than the discussions of any committee or noting of files or discussions but what is enacted by the parliament and mentioned in the provision and when there is no ambiguity then the plain reading and meaning shall be taken. • Appeal needs to be dismissed. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 In the impugned order Commissioner (Ap....
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....his Act on any other officer of customs who is subordinate to him." Therefore by this analogy also the Additional Commissioner can exercise the powers of assessing officer who happens to be his subordinate. Therefore, in my view reliance has been wrongly placed by the appellant on the Canon India case law in the present matter. The Additional Commissioner having jurisdiction over PCCCC cannot be deprived of the jurisdiction and is well within his rights and duties to adjudicate the cases pertaining to PCCCC. 12.4 Secondly I observe that the appellant in his grounds of appeal has time and again raked up the issue of first check assessment and examination. By virtue of first check he claims that the misdeclaration of description and value should be absolved of. In this regard I would like to state that in general cases, where there is not much difference between the declaration of goods and the actual god argument is sustainable as its factually correct that APSC has first check mandatory for all consignments but it is also to be noted that in spite of first check being in practice, there is no dearth of such cases where importer or exporter has tried to misdecla....
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....claring the correct description and value of these specialized items. Onus is definitely more tilted towards importers. 12.7 In the present case as evident from GII report, the importer had grossly misdeclared the description of goods as their identity is found totally different from that declared in the bill of entry. I find that Adjudicating authority has given detailed reasoning for rejection of such declared value and I find myself in agreement of such reasoning. Therefore, I hold that the declared assessable value (Transaction Value) of the imported goods is liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, Since, the declared value is liable for rejection and is accordingly rejected and therefore the Adjudicating Authority has rightly proceeded to re-determine the value as per Customs Valuation Rules, 2007. I observe that on the basis of test report, the panel had suggested the value of synthetic cubic zirconia at USD 40 per carat and the value of synthetic ruby at USD 125 per carat. Contemporaneous import data of Cubic Zirconia is available in NIDB database as discussed in table Il of the ....
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....nd value of the goods and attempted to import the said goods by grossly undervaluing them and thereby tried to evade the legitimate Customs Duty to the tune of Rs. 61,650.4 (differential duty). Accordingly, the Adjudicating Authority has rightly held that the impugned goods of declared assessable value of Rs. 60,049/- and re-determined value of Rs. 11,14,752/ are liable for confiscation under Section 111(m) of the Customs Act, 1962. 12.11 I also hold that in view of their above acts of omissions and commission which have rendered the impugned goods liable for confiscation under section111(m)of the Customs Act, 1962, the importer is liable for penalty under Section 112 (a) of the Customs Act, 1962 and as there is clearly evident gross mis declaration on the part of importer and specifically Shri Manish Shah who is the proprietor of M/s. Swastik creation and gross mis-declaration of this extent cannot be without active involvement of concerned responsible person who in this case is Shri Manish Shah and therefore Shri Manish Shah is liable for penal action under section 112 (a) and/or 112 (b) and Section 114AA of the Customs Act, 1962 for violations and misdeclara....
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.... lot 9 of the invoice are found to be synthetic ruby, 1 hold that the same are to be classified under appropriate CTH 7104 9090. 17. As evident from the Gll report, the importer had misdeclared the description of goods as their identity is found totally different from that claimed. Therefore, I hold that the declared assessable value. (Transaction Value) of the imported goods is liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Since, the declared value is liable for rejection and is accordingly rejected and therefore I proceed to re-determine the value as per Customs Valuation Rules, 2007. I find that on the basis of test report the panel had suggested the value of synthetic cubic zirconia at USD 40 per carat and the value of synthetic ruby at USD 125 per carat. I find that contemporaneous import data of Cubic Zirconia is available in NIDB database as discussed in table II above. I find that in absence of data of identical import goods, the value of the goods under Lots No. 1 to 8 and lot no. 10 i.e. Cubic Zirconia cannot be re-determined under Rules 4 of CVR, 2007. However, data of similar good....
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.... and gross mis-declaration of this extent cannot be without active involvement of concerned responsible person who in this case is Shri Manish Shah and therefore Shri Manish Shah is liable for penal action under section 112 (a) and/or 112 (b) and Section 114AA of the Customs Act, 19962 for violations and misdeclarations as referred above. 4.4 Undisputedly both the authorities i.e. Additional Commissioner and Commissioner (Appeal) have referred to letter dated 04.12.2019 of the Appellant whereby the appellant have agreed to revised classification and value as determined by the Customs for the impugned goods which is based on the NIDB for the goods mentioned in lot 1 to 8 and lot 10, and on the basis of the report given by the panel expert in respect of the goods mentioned at lot No 9. Tribunal has in the case of Hanuman Prasad and Sons [2021-TIOL-36-CESTAT-DEL] in similar circumstances has held as follows: "30. The very fact that the importers had agreed for enhancement of the declared value in the letters submitted by them to the assessing authority, itself implies that the importers had not accepted the value declared by them in the Bills of Entry. The value dec....
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....ue now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no Show Cause Notice, could/would have invited allegation of harassment and delay in clearance of goods. When Show Cause Notice is expressly foregone and the valuation is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per his consent suffered from fatal infirmity and such onus has not been discharged. Further, valuation of such goods requires their physical inspection and so reassessment of value in the absence of goods will not be possible. The case of Eicher Tractors v. Union of India (supra) cited by the appellant is not relevant here as in that case there was no evidence that the assessee had....
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....g the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had lodged any protest and on the contrary their letter dated 21-4-1999 clearly points to acceptance of the enhanced value by them, the cited decision advances the cause of the department rather than that of the Appellants contrary to the claim by the learned Counsel." [emphasis supplied] 34. In BNK Intrade (P) Ltd. vs Commissioner of Customs, Chennai [2002 (140) ELT 158 (Tri.-Del)] , the Tribunal observed as follows : "2.............. It is also to be noted that the importer had also agreed for enhancement of the price based on contemporaneous prices available with the Department. We, therefore, find no merit in the contention raised in the appeal challenging the valuation and seeking the refund of the differential duty paid by the appellants on enhancement." 35. The following position emerges from the aforesaid decisions of th....
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.... purely the case of misdeclaration of the goods. Appellant have in the B/E and the import documents declared the goods to be Glass Stone stones whereas on examination and assessment the same have been found to be "Cubic Zirconia" and "synthetic Ruby". These findings are supported by the test reports of GLL and Panel Member Report to whom the matter was referred as per the Public Notice 30/2018 dated 19.12.2018. The defence put forth by the appellant do not inspire any confidence in this regard. It cannot be accepted that the appellants were importing the goods without knowing the true nature of the goods. Appellants submission that they have opted for first check, also cannot be said to be valid defence for the reason that first check is a facility to determine the exact nature of the goods, and not a facility to mis-declare. The invoice of the Chinese Supplier is not having any details to infuse any confidence. Hence in our view the appellant have deliberately misdeclared the goods. 4.6 The goods were sought to be cleared on the value as per the invoice. The Bill of Entry was filed declaring the value as per invoice. To the query raised by the bench, the counsel for the a....
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....nt of the appellants. As the case is not of export, we find that no penalty under Section 114AA of the Customs Act, 1962 is imposable. ...". Sri Krishna Sounds and Lightings [2019 (370) ELT 594 (T)] "6. The Ld. AR has submitted that the Commissioner (Appeals) has set aside the penalty under Section 114AA for the reason that penalty has been imposed by the adjudicating authority under Section 112(a) and therefore there is no necessity of further penalty under Section 114AA. I find that this submission is incorrect for the reason that in the impugned order in paras 7 and 8, the Commissioner (Appeals) has discussed in detail the provision with regard to Section 114AA. It is seen stated that as per the Taxation Laws (Amendment) Bill, 2005, introduced in Lok Sabha on 12-5-2005, the Standing Committee has examined the necessity for introducing a new Section 114AA. The said Section was proposed to be introduced consequent to the detection of several cases of fraudulent exports where the exports were shown only on paper and no goods crossed the Indian border. The said Section envisages enhanced penalty of five times of the value of the goods. The Commissioner (Appeals) ha....
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....poraneous imports as well as with the manufacturer's price list for the same goods and the difference was very large. In some cases the declared price was less than half. In the case of Neha Intercontinental (P) Ltd. [2006 SCC OnLine CESTAT 1102], the factual finding of the Tribunal was that the rejection of the goods was only based on NIDB data which is not the case in the present dispute. The goods in question were food supplements and there were manufacturer's price list as well as imports by others of the same product. In the case of Eicher Tractors Ltd. [(2001) 1 SCC 315] there was a specific finding that the discount from the vendors price list was admissible which tilted the case in favour of the appellant. No such discount applied in this case. In the case of Bharat Marketing, the allegation of under valuation was only based on NIDB data. In the case of Polyglass Acrylic [(2016) 13 SCC 740], the Tribunal recorded that the Department has not relied upon any contemporaneous import of similar or identical goods to justify the enhancement. None of these cases will come to the aid of the appellant because in the present case there were contemporaneous data as well as manufacture....
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.... the mischief sought to be suppressed and the remedy sought to be advanced by the Act are external aids. Documents which have been required to be produced do not, in our view fall within the category of external aids as indicated. Having considered the facts and circumstances of the case, we are unable to accept the prayer of the petitioner to direct disclosure and production of the documents sought for. In our opinion, the language used in Section 4 of the Act, is clear enough read with Section 3 of the Act. We have set out the provisions of the said two sections. Section 3 states that "on the appointed day every textile undertaking and the right, title and Interest of the Company in relation to every textile undertaking shall stand transferred to and shall vest in the Central Government". Section 4 says that "Section 3 shall be deemed to include all assets, leaseholds, powers, authorities, privileges and all properties, movable and immovable... pertaining to the textile undertakings and all other rights and interests in or arising out of such property". 38. Francis Bennion in "Statutory Interpretation 1984 Edition page 526 para 238 states that Hansard reports, and ....
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....is Court reiterated that the Statement of Objects and Reasons, accompanying when introduced in the Parliament cannot be used to determine the true meaning and effect of the substantive provisions of the statute. Such statement cannot be used to show that the legislature did not intend to take over any particular property. See also The Central Bank of India v. Their Workmen (supra}. 40. It has to be reiterated, however that the objects and reasons of the Act should be taken into consideration in interpreting the provisions of the statute in case of doubt. This is the effect of the decision of this Court in K.P. Verghese v. The Income-tax Officer, Ernakulam and Another (982 1 S.C.R. 629), where this Court reiterated that the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill could certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation was enacted. It has been reiterated that interpretation of a statute being a exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. See in thi....
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....n the observations of the Federal Court in RM.AR.AR.R.M.AR. Umayhal Achi v. Lakshmi Achi and Others (l945 F.C.R. 1). We are therefore, of the opinion that the documents sought for are not relevant for the purpose for which they were sought for. In this case we are concerned only with the construction of the statute to determine whether the shares vested in the Government or not. As Lord Reid has said in Black-Clawson International Ltd. v. Papier-werke Waldhof Achaffenburg A G(1975 A.C. 591 at 613) "We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used. We are seeking not what Parliament meant but the true meaning of what they said." - See in this connection the discussion in Cross Statutory Interpretation - 2nd Edition, pages 20-30. 56. The words in the statute must, prima facie, be given its ordinary meaning. Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary. Nothing has been shown to warrant that literal construction should not be given ....
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.... such word, phrase or clause is not specifically defined, it is legitimate and indeed mandatory to fall back on General Clauses Act. Notwithstanding this, we should remember that when there is repugnancy or conflict as to the subject or context between the General Clauses Act and a statutory provision which falls for interpretation, the Court must necessarily refer to the provisions of statute. 16. The purpose of interpretation is essentially to know the intention of the Legislature. Whether the Legislature intended to apply the law in a given case; whether the Legislature intended to exclude operation of law in a given case; whether Legislature intended to give discretion to enforcing authority or to adjudicating agency to apply the law, are essentially questions to which answers can be sought only by knowing the intention of the legislation. Apart from the general principles of interpretation of statutes, there are certain internal aids and external aids which are tools for interpreting the statutes. 17. The long title, the preamble, the heading, the marginal note, punctuation, illustrations, definitions or dictionary clause, a proviso to a section, ....
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....gislation in hand may be called for, and, words chosen to communicate such indefinite referents are bound to be in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction. The process of construction combines both literal and purposive approaches. In other words the legislative intention, i.e., the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed..." 19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts....
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....he phrase "cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio". Following such maxim, the Courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals case (Infra para 37).], though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilize strict interpretation in the event of ambiguity is self-contradictory." By applying the above principles are of the view that if the interpretation made by the Bangalore and Chennai bench was to be adopted it would be not without inserting the word "export" in the Section 114AA. Courts/ tribunal do not have any authority to legislate on the statue as have been enacted by the legislature. Accordingly we do not find any merits in the submissions made by the appellant relying on these decisions. 4.11 Hon'ble Supreme Court has in case of Balkrishna Chhaganlal Soni [1983 (13) ELT 1527 (SC)]while considering the cases of white collared criminals have observed as followed: "19. The penal strategy must be formed by social circumstances, individual factors and the cha....