TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2017
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....ner Shri Sandeep Kabra Kabra proposing to: a) Reject the declared classification of 'Engineered Quartz Stone' under Customs Tariff Item CTI 68159990 in several Shipping Bills filed by the assessee and exported during 2017 and 2018 and to re-assess the Shipping Bills classifying it under CTI 68101990; b) Recover from the assessee an amount of Rs. 69,32,401/- said to have beeen wrongly availed and utilised using scrips under the Merchandise Export from India Scheme MEIS under section 28AAA of the Customs Act, 1962 Act; c) Appropriate an amount of R.s 73,40,209/- paid by the assessee during investigation; d) Hold the exported goods with FOB value of Rs. 11,63,45,015/- liable for confiscation under section 113(i) of the Act; e) Impose penalties on the assessee under Sections 114(iii) and 114AA of the Act; and f) Impose penalties on Shri Kabra under section 114(iii) and 114AA of the Act. 2. In the impugned order, the Commissioner confirmed the proposals at (a), (d) and (e) above and dropped the proposals at (b), (c) and (f). 3. Revenue filed Customs Appeal No's. 50324 of 2021 as it is aggrieved that the Commissioner did not confirm the demand of duty under Section 28AAA an....
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....A is permissible only where 'such instrument is utilised under the provisions of the act' and there is nothing in the SCN to show that the instruments were utilised and therefore, the Commissioner correctly dropped the demand. (iv) Demand under section28AAA is permissible only if the MEIS scrip is obtained by collusion, wilful mis- statement or suppression of facts and none of these elements were even alleged, let alone, established in the SCN. (v) The exported goods were correctly classified under CTI 68159990 and it has been accepted by all authorities as evidenced by the following documents: a. Approval of Development Commissioner, NOIDA, SEZ dated 19.4.2016; b. Sanction order for the EOU issued by the Assistant Commissioner dated 13.5.2016; c. Intimation for sealing given to the jurisdictional central excise officers; d. ARE-1 and ER-2 forms under Central Excise Act, 1944 for 100% EOU filed by the assessee and endorsed by the officers; e. Proof of Export in Annexure 19 for January 2017; f. GSTR-1 for July 2017 (vi) Thus, the allegation of mis-classification of the exported goods and consequently imposing penalties are not sustainable. (vii) The impugned orde....
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....ith the provisions of the Customs Tariff Act; (b) the value of such goods as determined in accordance with the provisions of this Act and the Customs Tariff Act; (c) exemption or concession of duty, tax, cess or any other sum, consequent upon any notification issued therefor under this Act or under the Customs Tariff Act or under any other law for the time being in force; (d) the quantity, weight, volume, measurement or other specifics where such duty, tax, cess or any other sum is leviable on the basis of the quantity, weight, volume, measurement or other specifics of such goods; (e) the origin of such goods determined in accordance with the provisions of the Customs Tariff Act or the rules made thereunder, if the amount of duty, tax, cess or any other sum is affected by the origin of such goods; (f) any other specific factor which affects the duty, tax, cess or any other sum payable on such goods, and includes provisional assessment, self-assessment, re- assessment and any assessment in which the duty assessed is nil;" 14. Classification and valuation of the imported goods in a Bill of Entry or export goods in a Shipping Bill are part of assessment and the assessment....
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....said re- assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. Explanation. - For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 before the date on which the Finance Bill, 2011 receives the assent of the President, such imported goods or export goods shall continue to be governed by the provisions of section 17 as it stood immediately before the date on which such assent is received." 16. Thus, the exporter can assess the Shipping Bill and the proper officer can re-assess a Shipping Bill. The question which may arise is what if more than one proper officers have the jurisdiction to re-assess the Shipping Bills. In such a case, once one 'proper officer' exercises his jurisdiction and re-assesses a Shipping Bill, it automatically precludes every other proper officer from exercising the jurisdiction in that shipping bill. Assessment is a quasi-judicial function and just as once one competent cour....
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.... person holding himself out to be the exporter;" 18. Similarly, once the goods are cleared for home consumption the importer will no longer be the importer and the goods will no longer be imported goods. Sections 2(23), (25) and (26) clarify this position and they read as under: "(23) 'import', with its grammatical variations and cognate expressions, means bringing into India from a place outside India; (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; (26) 'importer', in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner, beneficial owner or any person holding himself out to be the importer;" 19. Once the process of assessment of the Bill of Entry is completed by issue of the order permitting clearance of goods for home consumption and once the process of assessment of a Shipping Bill is completed and the goods are exported, they cease to be imported goods and export goods respectively. There cannot be any assessment or re-assessment thereafter. 20. While there cannot be anymore asse....
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....oper officer shall hold pre-notice consultation with the person chargeable with duty or interest in such manner as may be prescribed; (b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid. ***** (4) Where any duty has not been levied or not paid or has been short-levied or short-paid or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful mis-statement; or (c) suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been so levied or not paid or which has been so short- levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pa....
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....hort paid or erroneously refunded. Section 149 is a power which the officer can exercise if the assessee seeks an amendment to the Bill of Entry or Shipping Bill. Section 154 empowers the officer to correct arithmetical or clerical errors in his order. 22. In case of Shipping Bills which have been assessed and goods have already been exported, if there is no proposed recovery of export duty, the only remedy available to the Revenue is to assail the assessment through an appeal to the Commissioner (Appeals) under section 128. Section 28 will not apply because there is no duty. Section 149 is open to the exporter to request the officer for and the officer may permit changes. Section 154 does not help except where the officer had committed any clerical errors. 23. Clearly, the Principal Additional Director General of DRI issued the SCN without any authority of law to reassess the Shipping Bills where the goods have already been exported. Naturally, he also did not cite any section under which he proposed the re-assessment. Similarly, in the impugned order, the learned Commissioner also re-determined the classification in the Shipping Bills where the goods had already been exported w....
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....declaration made under section 77 ; ****" 29. The 'entry made under the Act' in this case is the Shipping Bill. It is not the case of the Revenue that the goods which were exported did not correspond to what was declared in the Shipping Bill. Revenue's case is that the classification of the goods in the Shipping Bill was not correct. Classification of goods is a matter of opinion and it is part of the assessment. The exporter may classify the goods under a CTI, the proper officer may change it to a different CTI and if an appeal is filed, the CTI may be changed at any stage of appeal. Merely because someone or some officer may have a different view about the classification, the goods will not become liable to confiscation. In this case, the classification of the goods according to the assessee, as per the licence issued by the Development Commissioner and the Central Excise officers who cleared the goods is the same and it was indicated in the Shipping Bills. 30. If DRI takes a different view about the classification, it does not render the goods liable to confiscation. There is no obligation on the exporter to anticipate if DRI would ever look into his exports and if so, what ....
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....the goods, as declared by the exporter or the value as determined under this Act, whichever is the greater." 33. The case of the Revenue is that the assessee, by filing Shipping Bills classifying them according to its understanding (and the understanding of the Development Commissioner, Central Excise officers, etc.) and NOT classifying them according to the view subsequently taken by DRI during its investigation, rendered the goods liable to confiscation under section 113(i) and rendered itself liable to penalty under section 114. Nobody has an obligation to either anticipate or to conform to the views of DRI in classifying goods in Shipping Bills. The imposition of penalty on the assessee under section 114 in the impugned order cannot be sustained and need to be set aside. 34. Revenue is aggrieved that the Commissioner did not impose penalty under section 114AA on the assessee and Shri Kabra as proposed in the SCN. Section 114AA reads as follows: "Section 114AA. Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect ....