TaxTMI 
TaxTMI 
2024 (9) TMI 1809
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.... Customs Commissionerate had intercepted two containers bearing Nos. TLHU-9404866 and TLHU-8577390 imported under Bills of Entry (B/Es) Nos. 8740810 and 8738425, both dated 02.03.2017. The said B/Es were filed by Shri Bimal P. Shah, Proprietor of M/s. Raj Traders. The said containers were examined under Panchnama dated 06/07.03.2017 in the presence of the panch witnesses, including Shri Bimal P. Shah. On examination, the Container No. TLHU-9404866 was found to contain a total of 781 nos. of Sony brand LED TV Panels, instead of 518 nos. of LED TV panels as declared in the B/Es; thus, there were found to be an excess quantity of 263 nos. LED TV panels. Further, upon examination, Container No. TLHU-8577390 was found to contain the following quantity of goods: Sl. No. Description of goods Qty. 1 Assorted PCB 2065 set 2 Assorted Speaker 2067 set 3 AC Cord W/Power supply 2057 pcs 4 Back Cover 2120 pcs 5 Empty Box 2065 Pcs 6 Remote control, Screw & Manual 2065 set 7 Plastic stand 1958 pcs* 8 Metal stand 107 pcs* (*Total quantity of plastic and metal stands was found to be 2065 nos.) 2.2 Owing to the rea....
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....th the intent to evade detection with regard to some of the LED TV Panels (518 declared and 263 LED were non-declared), in the consignment cleared vide B/E No. 8740810 dated 02.03.2017 from JNCH, Nhava Sheva. Thus, it was contended by the department that the importer had made mis-declaration by filing three different B/Es, instead of single B/E, for declaring the imported goods as 2065 Sony TV sets, classifying the same under CTH 8528 75 19. It has further been contended that the provisions of Rule 2(a) of the General Rules for Interpretation of the First Schedule to the Customs Tariff Act, 1975 is applicable to such imports made by the appellant. It was also alleged that the value of the imported goods under the B/Es Nos. 8740810 dated 02.03.2017; 8738425 dated 02.03.2017 and 8795140 dated 07.03.2017 had been mis-declared as the value of the LED TV Panels and parts of TV. 3.1 On the basis of detailed investigation, the department had issued the Show Cause Notice (SCN) dated 28.02.2018, proposing for demand of customs duty of Rs. 1,75,53,028/- under Section 28(4) of the Act of 1962 from the importer-appellant Shri. Bimal P. Shah, along with interest under 28AA of the Act of 1962....
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....nd 8795140 dated 7.3.2017 against the Customs duty of Rs.1,75,53,028/-; (x) Ordered encashment and appropriating the amount of Rs. 11,00,000/- available in the bank account no.318801010 of Union Bank of India against the demand of Customs duty of Rs.1,75,53,028/-. 3.2 The impugned order has also - (i) imposed penalty of Rs. 5,00,00,000/- under Section 112(a) and (b) and clause (iv) of Section 112 of Customs Act, 1962 on Shri Gurvinder Singh Kochhar, Manager of the Appellant; (ii) imposed penalty of Rs. 5,00,00,000/- under Section 112(a) and (b) and clause (iv) of Section 112 of Customs Act, 1962 on Shri Ashok Kalange @ Ravi accomplice of Bimal P Shah; (iii) imposed penalty of Rs. 1,00,00,000/- under Section 112(a) and(b) and clause (iv) of Section 112 of Customs Act, 1962 on Shri Nimmit Kiron Dhingra; (iv) imposed penalty of Rs. 1,00,00,000/- under Section 112(a) and(b) and clause (iv) of Section 112 of Customs Act, 1962 on Shri Navabhai Vohtabhai Patel; (v) imposed penalty of Rs. 1,00,000/- under Section 112(b) and clause (I) of Section 112 of Customs Act, 1962 on Shri Navnath H. Yewate; (vi) imposed penalty of Rs. ....
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.... TV panels of 263 nos. in the imported consignments under Container Nos. TLHU-9404866 and TLHU-8577390 as claimed in the SCN or the impugned order. It is for this reason, the importer had contested the Panchnama proceedings from the very beginning of the investigation. It is a fact on record that the overseas supplier's representative has confirmed vide e-mail dated 20.03.2017 that they had supplied only LED panels to the extent declared in the documents, in response to e-mail sent by the importer. For the reason best known to the department, neither the investigating team nor the adjudicator had conducted any investigation at the end of overseas supplier, in order to ascertain the true and correct position; (v) the allegation of artificially splitting-up of the consignments imported in one vessel into three shipments to mis-declare the classification of complete LED TVs into LED TV parts, is purely an assumption, without any proof or evidence; (vi) in a case of mis-declaration or misclassification, the burden to prove is cast upon the department and the conclusions cannot be drawn based on assumptions and presumptions and the facts have to be established by recor....
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....bills of entry assessment have not been challenged in the present case; (xii) it was therefore, submitted that the Department had completely failed to prove that the imported consignments of parts of LED TVs are actually complete LED TV sets and the findings in the impugned order are without any basis/evidence and therefore, the classification of the imported goods as complete TV sets and consequently, the valuation as complete TV sets is not sustainable in law. Accordingly, it is prayed for setting aside the demand of duty, interest, penalties and redemption fine imposed in the impugned order; 6. Learned Advocates appearing for the other appellants have reiterated the stand taken for the main appellant Shri Bimla P Shah, proprietor of M/s Raj Traders, as their submissions, against confirmation of the penalties on them. They have submitted that the provisions of Section 112 of the Act of 1962 are not attracted in the case of the appellants inasmuch as the goods in question were not improperly imported. Further, it was contended by the learned Advocates that even assuming, the goods were imported in contravention of the provisions contained in the Customs statute, but th....
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....er was opened around the same time at 14.30 hrs. Since, the second container was shifted to another godown for examination, due to space constraint in the first godown, it can be safely presumed that examination of the first container was concluded around 13.30 hrs. to 14.00 hrs. on 07.03.2017. Thus, the examination of contents of container was done between 10:00 hrs. to 14:00 hrs. on 07.03.2017 i.e., in a time frame of around 4 hours. In the Panchnama, it has been recorded that the officers segregated the boxes according to their sizes, by opening each of the boxes and it was found that the boxes/cartons contained TV panels. For 100% examination of 781 cartons/boxes said to have been found as against the declared 581 nos. of cartons/boxes, the time taken for examination works out to 30 seconds per carton, which prima facie practically and logically highly impossible. Thus, the claim in Panchnama that the imported goods were subjected to 100% examination in Container No. TLHU-9404866 is not free from doubt. (iii) Panchnama records that the imported goods were subjected to 100% examination. However, Panchnama fails to mention the details of examination done by the departmen....
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....the details of each of the products found, particularly in the light of the fact that different sizes of LED TV Panels i.e., 32"/40"/43"/48"/49"/55" were imported in Container TLHU-9404866. It has been stated that all parts put together would constitute 2065 nos. of complete LED TV sets. In other words, there is no evidence to suggest that the assorted parts like, PCBs, speakers, back covers, power supply, stands, empty boxes, remote controls, etc., found in Container No. TLHU-8577390 were proportionate to each of the sizes of LED TV panels, in order to substantiate the case of the Department that the complete LED TVs were imported in disassembled form/ condition. 9.2 Contesting the proceedings under Panchnama conducted on 06/07.03.2017, the importer-appellant had referred to the decision of the Larger Bench of this Tribunal in the case of Kuber Tobacco Products Ltd. v. Commissioner of Central Excise, Delhi - 2013 (290) ELT 545 (Tri-Del), to state that the Panchnama proceedings are not in accordance with law. Accordingly, the importer-appellant has contested the proceedings under Panchnama conducted on 06/07.03.2017 and also denied the excess LED TV panels of 263 Nos., said to h....
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....contained in Container no. TLHU-9404866, to conclusively prove that all these parts assembled together with LED TV panels would constitute complete TV sets. The investigation completely failed on this aspect, which is of paramount importance for establishment of the case for the Revenue. This cast shadow on the charge that the importer-appellant has imported complete LED TV sets in the guise of parts of LED TV, in order to avoid payment of duty under the classification of the TV sets. Thus, the Panchnama proceedings drawn on 06/07.03.2017 is faulty and no reliance can be placed on the same. In this context, paragraphs 21 and 22 in the Order passed by the Larger Bench of this Tribunal in Kuber Tobacco (supra) are relevant, which are extracted herein below: "21. A panchnama is a record of the things visually perceived or actually experienced by the panchas in the course of investigation. If it is a search panchnama, obviously, it should record everything that takes place in the course of search. Mere recording that the search officers offered for search of their person is not sufficient. In relation to the seizure of documents, it was necessary not only to record that the do....
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....the movement of the officers and the panchas searching the premises and every relevant action of every such person has to be precisely recorded in the panchnama to avoid any doubt about the seizure proceedings. None of such precautions were taken in the cases in hand." 10. Another argument canvassed by the importer-appellant is that, neither the investigation nor the impugned order was able to establish that all the parts imported by the importer-appellant constituted disassembled LED TVs i.e., it was not identifiable as separate parts, but were processed to manufacture LED TVs and subsequently disassembled to avoid classification as LED TVs, as concluded by the adjudicating authority in the impugned order. We find that the impugned order, except for relying upon the investigation detailed out in the SCN, no substantive evidence has been brought on record by the adjudicating authority. Further, the Revenue had also failed to cause investigation at the overseas supplier's end to ascertain as to whether, they had supplied LED TVs in disassembled condition, treating the same as parts, which is vital for establishing the alleged mis-declaration. On the contrary, it is a fact on reco....
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....plied with finished TV. iii) All key components such as Main board, LCD Panel Assembly, AC Adaptor, Speakers were found in the consignment." Further to a specific query in the reference- "Q5. Can we make complete TV by assembling the parts? Answer: Kindly refer to our reply in Paragraph 1. We would be in a position to provide a conclusive response only after being provided access to the full consignment." 12. In context with the explanation furnished by M/s Sony India Pvt. Ltd., we failed to understand that what had prevented the Department to permit access to the full consignment of imported goods, lying under customs control to M/s Sony India Pvt. Ltd., for obtaining their said opinion. As the imported goods are of 'Sony' brand, they are the competent authority to furnish the opinion with regard to the imported goods, whether those were 'parts of LED TV' or 'complete TV sets' of specific screen sizes. However, in absence of physical examination of the imported goods, no expert in the field can conclusively prove or certify that the goods imported were parts and not the complete TV sets or otherwise. Though the department had the opportunity ....
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....on'ble Apex Court have dealt with the subject matter of the dispute vis-à-vis applicability of Rule 2(a) of the General Interpretative Rules to the Customs Tariff Act, 1975. The relevant paragraphs are extracted below: "16. Our attention was invited to a very interesting decision reported in Modi Xerox Ltd. v. CCE, New Delhi [1998 (103) E.L.T. 619] which was confirmed by this Court in 2001 (133) E.L.T. A91 (it must be noted that the decisions in Woodcraft Products is specifically confirmed in this decision). In this case, the Tribunal had relied on Tara Chand's case as also the CC v. Mitsuny Electronics Works [1987 (30) E.L.T. 345 (Cal. HC)] which we have made reference in the earlier part of this judgment. The Tribunal had held that the fax machine in completely knocked down condition imported by the appellant being not a fax machine but part thereof, the benefit of exemption under Notification No. 59/88/Cus., dated 1-3-1988 would not be available. Very interestingly, it was claimed by the importer that it had imported the fax machine and not the components obviously because the duty payable on the components was more. The Tribunal came to the conclusion that in vi....
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....fication of the parts of machines falling under Section XVI. In terms of Rule 1 of Interpretative Rules, invocation of Rule 2(a) for certain categories of goods covered in Section XVI like the goods of CTVs are prohibited. For this the learned counsel relied on the decision in Modi Xerox (supra). In that view the learned counsel says that Rule 2(a) would not be applicable at all. This question needs no consideration here particularly in view of the interpretation that we have given to Rule 2(a). On facts, we have already found that Rule 2(a) would not be applicable to the present case since there is no question of the goods having the essential character of CTVs. In that view, the question of applicability of Section 2(a) on this account need not be gone into in this judgment." 14. We find that in the present case, neither the investigation nor the impugned order have established the fact that all the parts imported by the importer-appellant had constituted disassembled LED TVs i.e., the imported goods were complete LED TVs, which were subsequently disassembled to avoid classification, as complete TVs, and brought in different consignments. We have also noted that the impugned o....
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....rely applicable and therefore, it can be safely concluded that the imported goods are required to be classified in the form, in which they are presented for assessment i.e., 'parts of LED TV'. 15.1 The importer-appellant has placed the argument that in case of self-assessment of the Bill of Entry, the only recourse available to the department for contesting the said assessment, is by way of filing of appeal under Section 128 of the Act of 1962, before the Commissioner (Appeals), which aspect, admittedly has not been complied with by the department in this case. Thus, it has been submitted that the assessment complete in all respects, cannot be re-opened by the department for confirmation of the duty demand on the importer. In this context, the importer-appellant has relied upon the judgement delivered by the Hon'ble Supreme Court, in the case of ITC Ltd., Vs. CCE, 2019 (368) E.L.T. 216 (SC). We have examined the statutory provision contained in Section 17 of the Act of 1962. Sub-section (1) in said Section 17 has provided for self-assessment of the duty leviable on the imported goods. The self-assessment so made by the importer, can be verified by the department under sub-sectio....
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....be regarded as an order which can be subjected to appeal under Section 128 of the Customs Act." ....................... 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 was contended that no appeal lies against the order of self-assessment. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder: "128. Appeals to Commissioner (Appeals). (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a Principal Commissioner of Customs or Commissioner of Customs may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order: Provided that the Commissioner (App....
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.... 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 nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs 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. In Hero Cycles Ltd. v. Union of India - 2009 (240) E.L.T. 490 (Bom.) = 2009-TIQL-317-HC-MUM-CUS though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief fo....
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....er officer gets power to reassess already assessed shipping bill. Prior to 8-4-2011, it was proper officer who used to frame assessment and w.e.f. 8-4-2011 he gets first opportunity to doubt the self-assessed value at the time of export and, secondly, he may prefer an appeal before Appellate Authority. A team of Customs officers at the time of export of goods verify different particulars including value declared by an exporter. The declared value may be accepted or re-assessed and in case re-assessed value is not accepted by exporter, proper officer has to pass speaking order. Thus, as per scheme of the 1962 Act, department is not remediless and Courts are bound to interpret law as such. Courts while interpreting law can neither add nor subtract any word from the plain language irrespective of consequences. It is the legislature who has to rectify, repair or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. 17. On plain reading of Sections 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of re-assessment of goods already exported under Rule 16 of Drawback Ru....
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....pected. Every assessment, including provisional assessment, is appealable by both the Revenue and the exporter to the appellate authority. Assessment of a Shipping Bill or Bill of Entry need not necessarily result in payment of duty. Where the proper officer needs further information or enquiries, he can resort to provisional assessment and thereafter finalise the assessment. In this case, nothing is presented before us to show that the provisional assessment order has been appealed against or modified by the Commissioner (Appeals). Therefore, the provisional assessment order of the proper officer is still valid. We do not find any provision of the Customs Act under which either a provisional assessment or final assessment can be modified by officers of DRI and a different decision taken. In the case of Jairath International v. Union of India 2019 (370) ELT 116 (P&H) this legal position was clarified by the High Court of Punjab and Haryana. In that case, goods were exported on claim for drawback. Thereafter, DRI received intelligence that the exported goods were overvalued to claim ineligible drawback. Accordingly, an SCN was issued proposing to revise the value downwards and recov....