TaxTMI 
TaxTMI 
2022 (11) TMI 1238
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....nder 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, 1962. However, I give an option to the importer to redeem the goods on paym....
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....nment, 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 71049090. 2.4 The panel member suggested the value of Synthetic Cubic Zirconia @ USD 40 (Rs.2892) per Kilogram and the value of Synthetic Ruby @ USD 125 per kilogram. 2.5. As per contemporaneous NIDB database it was noticed that Cubic Zirconia from China was cleared in other ports ....
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.... 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 & 10 of bill of entry is evidence that the contemporary valuation is at the most is Rs. 2892/-( USD 40/Kg) per kg for Item 1 to 8 & 10 of bill of entry. * The Panel member's value of Rs. 2892 per Kg for Item 1 to 8 & 10 of bill of entry should have been adopted * In case of similar goods, lowest transaction value of similar goods must be adopted for determination of price of goods under import as envisag....
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....le 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 declared in the invoice and Bill of entry was originally only Rs 60,0497- and the applicable duty after re assessment was Rs 68, 422/- which was accepted and admitted by the Appellant and it is clearly evident from the above that the original value mentioned in the invoice and B/E was not true and correct * Glass stones is very generic in nature and the Appellant is clearing in Precious cargo modes on from ab initio he was aware of the mis declaration and mis classification to evade customs duty. * The value adopted by the department was done in a very procedural manner by firstly ....
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.... 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 (Appeal) has observed as follows: "12.1 I have carefully gone through the Order-in-Original as well as the grounds of appeal of the appellant. First I take up the issue of jurisdiction raised by the appellant. In its grounds of appeal the appellant has stated that in terms of section 28 read with 2(2)(c) of the Customs Act, 1962 and in terms of judgment given by the Hon'ble Supreme Court in the case of M/s Canon India Private Limited vs. Commissioner of Customs the order has been passed by Additional Commissioner of Customs without any authority of law and jurisdiction. In the said case, it was held that only assessing authority is the proper officer" and not any officer. In the impugned case, the subject order of assessment was not issu....
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....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 misdeclare by counting on their luck or the reasons best known to them. I also feel that correct declaration should be the priority of the importer/ exporter in the regime of self-assessment and faceless assessment. In the self assessment regime, the onus is upon the importer to correctly and accurately self- assess the bill of entry. As far as first check is concerned, the benefit of doubt has to be given on case to case basis on the overall circumstances of the case. 12.5 As per the new scheme of self- assessment, while the responsibility for assessment has shifted to the importer/exporter, the Customs officers would have the power to verify such assessments and make re-assessment, where warranted. Thus, Importers/exporters are required to declare the correct ....
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....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 Orderin-Original. 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 goods for goods under lots no. 1 to 8 and lot no. 10 is available on NIDB database, I observe that contemporaneous import data of synthetic cubic zirconia shows that the similar goods are being imported at a minimum price of Rs. 10,917(USD 151) per kilograms at the same quantity level. Therefore, I hold that the Adjudicating Authority has rightly taken value of goods under Lots No. 1 to 8 and lot no. 10 i.e. Synthetic Cubic Zirconia at USD 151 per kilogram for assessment under Rule 5 of CVR, 2007.As for the goods under lot no. 9, in absence of identical/simila....
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....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 misdeclarations as referred above. 13. Now I will deal with the quantum of redemption fine and penalty. I observe that the re-determined assessable value as per Adjudicating Authority is Rs. 11,14,752. Thus the applicable duty on the subject goods comes to Rs. 68,422/ as against the self assessed duty of Rs. 6,772/. Thus the differential duty was calculated to Rs. 61,650/ under the bill of entry no. 5520389 dated 01.11.2019. I further observe that the Adjudicating Authority has imposed the redemption fine of Rs. 6,00,000. Considering the margin of profit in the present case, the redemption fine appears to be on higher side and the needs to be rationalised. Further I observe that penalty of Rs. 6,100/ under section 112(a)(ii) has been imposed both on the importer and its proprietor. Being a proprietary firm the penalty....
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....arat. 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 goods for goods under lots no. 1 to 8 and lot no. 10 is available on NIDB database. I find that contemporaneous import data of synthetic cubic zirconia shows that the similar goods are being imported at a minimum price of Rs. 10,917 (USD 151) per kilogram as shown in the table 11 above at the same quantity level. Therefore, I hold that the value of goods under Lots No. 1 to 8 and lot no. 10 i.e. Synthetic Cubic Zirconia is to be taken at USD 151 per kilogram for assessment under Rule 5 of CVR, 2007. As for the identical or similar imported goods, on which they are sold in India and Cost Structure of the goods production, are also not available, therefore, the value of the imported goods cannot be redetermined under Rules 7 & 8 of CVR, 2007. Therefore, the value of the goods under lot no. 9 needs to be re determined under Rule 9 of Customs Valuatio....
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....AT-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 declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the importers had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under rule 3(1) for the reason that the declared value has been rejected under sub rule 2, that the value of the imported goods is required to be determined by proceeding sequentially through rule 4 to 9. As noticed above, the importers had accepted the enhanced value and there was, therefore, no necessity for the assessing officer to determine the value in the manner provided for in rules 4 to 9 of the Valuation Rules sequentially. 31. In this connec....
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....rged. 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 consented to enhancement of value." [emphasis supplied] 32. In Vikas Spinners, the Tribunal dealing with a similar situation, observed as under : "7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry dated 7-5-1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5-1990. Having once accepted the load....
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...., 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 the Tribunal: (i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation; (ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and (iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted. 46. Learned counsel for the respondent has also emphasized that NIDB data cannot be the sole basis to reject the transaction value without any cogent reasons. As seen above, the importers had in writing accepted the transaction value and it is perhaps for this reason that they did not require any show cause notice to be issued to them or ....
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....berately 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 appellant affirmed that the value declared on the invoice was inclusive of freight and other charges. That being so, the Chinese supplier has supplied the goods by declaring the value of goods which would not even be commensurate the air freight charges for transportation of this consignment from China to Mumbai. The value declared do not have any ingredients of the "transaction value" and should have been outright rejected, which have been done by the authorities below. The invoice has been issued without referring to any purchase order stipulating the terms of the supply including the terms of payment. Appellant have no answer to any of these questions which are so essential to determine the validity of the transaction and the declaration made on the Bill of entry. Lower authorities have rightly rejected the value declared and have determined the correct value by following the procedure as laid down by the Customs Valuation (determination of the Price of....
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....ts 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) has analyzed the object and the purpose of this Section and has held that in view of the rationale behind the introduction of Section 114AA of the Customs Act and the fact that penalty has already been imposed under Section 112(a), the appellate authority has found that the penalty under Section 114AA is excessive and requires to be set aside. Thus, the penalty under Section 114AA is not set aside merely for the reason that penalty under Section 112(a) is imposed. After considering the ingredients of Section 114AA and the rationale behind the introduction of Section 114AA, the Commissioner (Appeals) has set aside the penalty under Section 114AA. 7. On appreciating the evidence as well as the facts presented and after hearing the submissions made by both sides, I am of the view that the Commissioner (Appeals) has rightly set aside the penalty under Section 114AA since the present case involves importation of goods and is not a situation of paper transaction. I do not find any merit in ....
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....r 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 manufacturer's price list and the appellant was questioned about the difference and its submission is that it had imported inferior quality goods with short shelf life and hence the goods were sold cheap by the overseas supplier. Neither the bill of entry nor its supporting documents supported this assertion. Further, such goods could not have been imported with a short shelf life and of inferior quality without obtaining a no objection certificate in the FSSAI which has not been done in this case. The cases of Agarwal Industries [2005 SCC OnLine CESTAT 719], Oswal Fats & Oils [2007 SCC OnLine CESTAT 2905] and J.D. Orgochem Ltd. [(2008) 16 SCC 576] were relied upon by the appellant to assert that assessable value can be rejected if the buyer and seller are related parties. There is no such allegation in this case and, therefore, and these cases laws are not relevant to this appeal. The case of Kelvin Infotech [2014 SCC OnLine CESTAT 2328] was relied upon by the appellant to assert that there was no evidence of....
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....erests in or arising out of such property". 38. Francis Bennion in "Statutory Interpretation 1984 Edition page 526 para 238 states that Hansard reports, and other reports of parliamentary proceedings on the Bill which became the Act in question, are of obvious relevance to its meaning. They are often of doubtful reliability however, (emphasis supplied). The documents in question which are sought for do not relate to the enacting history or any past enactment or the present enactment. The notings made in various Departments at various levels by the officers namely, the Under Secretary, Deputy Secretary, Joint Secretary, Secretary etc., whatever their view might be, is not the view of the Cabinet. The ultimate decision is taken by the Cabinet. So the notings cannot and are not guides as to what decision the Cabinet took. See for example the Task Force report referred to in National Textile Corporation Ltd. v. Sitaram Mills Ltd. and Others (supra). This Task Force Report demonstrated the irrelevancy of the documents summoned to be produced. The Task Force Report manifested that certain mills were viable. But from the circumstance under which managements of these mills were ta....
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....that interpretation of a statute being a exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. See in this connection the observations of this Court in Chern Taong Shang & Another etc. v. Commander S.D. Baijat & Others (J.T. 19881 S.C. 202). The documents now sought for by the petitioner do not fall within this category. It is neither the object and scheme of the enactment nor the language used therein, that is sought for in the instant case. It is certainly relevant to know the mischief that was intended to be remedied. But in the documents in question which the petitioner is seeking no such correlation has been established. These are, therefore, not relevant. We reiterate that no officer of the Department can speak for the Parliament even after the Act has been passed. This Court has to interpret the Act on the basis of informed basis by applying external and internal aids to the language is ambiguous. In the words of Lord Scarman "We are to be governed not (by) Parliaments intentions but by Parliament's enactment's". See Cross "Statutory Interpretation" 2nd Edition page 22. Blackstone in his "Commentaries on the Laws of England" (....
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....l unless there are some strong and obvious reasons to the contrary. Nothing has been shown to warrant that literal construction should not be given effect to See Chandravarkar S.R. Rao v. Asha Lata (1986 4 S.C.C. 447 at page 476), approving 44 Halsbury's Laws of England, 4th Ed. paragraph 856 at page 552. Nokes v. Doncaster Amalgamated Colliery Limited (1940 Appeal Cases W14 at 1022). It must be emphasised that interpretation must be in consonance with the Directive Principles of State Policy in Article 39(b) and (c) of the Constitution. 57. It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context. That intention, and therefore the meaning of the statute, is primarily to be sought in the words used-in the statute itself, which must, if they are plain and unambiguous, be applied as they stand. In the present case, the words used represent the real intention of the Parliament as we have found not only from the clear words use....
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....he heading, the marginal note, punctuation, illustrations, definitions or dictionary clause, a proviso to a section, explanation, examples, a schedule to the Act etc., are internal aids to construction. The external aids to construction are Parliamentary debates, history leading to the legislation, other statutes which have a bearing, dictionaries, thesaurus. 18. It is well accepted that a statute must be construed according to the intention of the Legislature and the Courts should act upon the true intention of the legislation while applying law and while interpreting law. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the Legislature. In this connection, the following observations made by this Court in District Mining Officer v. Tata Iron and Steel Co., (2001) 7 SCC 358, may be noticed : "... A statute is an edict of the Legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statute has to be construed according to the intent of them that make it and the duty of the Court is to act upon the true intention of the Legislature. If a statutory ....
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....that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. 21. In construing penal statutes and taxation statutes, th....