TaxTMI 
TaxTMI 
2026 (4) TMI 1449
X X X X Extracts X X X X
X X X X Extracts X X X X
....sting to the Central Revenue Control Laboratory [CRCL] They also weighed the goods. 3. The quantity of the goods was 17,330 kg which was 7% more than the declared weight of 16,178.60 kg. The goods were declared as 'Polyester knitted fabric' and after testing, CRCL reported it to be 'Knitted fabric-95.5% polyester and 4.5% spandex'. 4. Statement of the Director of the appellant firm, Shri Fakir Chand Sarawagi was recorded in which he agreed to the rejection of the declared value and its re-determination. He also waived the issue of Show Cause Notice and personal hearing. Accordingly, the Joint Commissioner passed his order as follows: ORDER "(i) 1 reject the assessable value of Rs. 21,56,541/- declared by the importer in respect of goods imported vide Bill of Entry No. 6111648 dated 17.12.2019, under Rule 12 of the Customs Valuation Rules (Determination of Value of Imported Goods) Rules 2007 [Valuation Rules] and re-determine the assessable value as Rs. 24,47,863/- under Rule 5 of the Customs Valuation Rules, 2007. (ii) I confirm the total Customs duty amounting to Rs. 5,74,758/- in respect of goods imported vide Bill of Entry No. 6111648 dated 17.12.2019 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rences in weighing differences in scales. Hence there is no mis-declaration with intent to evade duty. (iii) So far as allegation of mis-declaration of the value is concerned, the declared value of USD 1.05/kg has been rejected and the same has been enhanced to USD 1.94/kg on the ground that price of similar goods have been noticed at higher values without examining the applicability of valuation Rule 5. The Adjudicating Authority mentioned in his Order that the data of contemporaneous imports were shown to the director of the Appellant Company and the lowest value found as per the contemporaneous import under Bill of Entry No. 5611190 dated 09.11.2019 was the lowest. However, there is no mention as to whether the description ascertained by the test report in the present case being Knitted Fabric approx. 95.5% Polyester and approx. 4.5% of Spandex (Elastomeric Yarn) GSM-260+-5%. was similar to the description of the bill of entry which is being applied in the present case. (iv) Merely going by the description given in the National Import Database (NIDB) data was erroneous as Valuation Rule 5 lays down the criteria of "similar goods" for comparison of values. In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere mis-declared, they were correctly confiscated under section 111(m) and allowed redemption on payment of redemption fine. (iv) Since there was an attempt to evade payment of duty, penalty under section 114A of the Act was also correctly imposed. (v) Once the appellant agreed to the valuation before the Joint Commissioner, it was not open to him to challenge it thereafter in appeal. (vi) The impugned order may be upheld and the appeal may be rejected. Findings 8. We have considered the submissions advanced by both sides and perused the records. 9. The facts are not in dispute. The appellant imported goods described as 'Polyester knitted fabric' and quantity as 16,178 kg in the Bill of Entry. On examination, the quantity was found to be 17,330 kg which was 7% more than the declared weight. After testing by CRCL, it was found to be 'Knitted fabric-95.5% polyester and 4.5% spandex'. 10. It is common knowledge that spandex is often blended in the fabrics in a small quantity to make it more elastic and comfortable to wear. Merely because there was 4.5% spandex, the imported fabric does not cease to be 'polyester knitted fabric'. It would have bee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents." 12. As can be seen, Valuation Rule 12 does provide for rejection of transaction value and if it is so rejected by the proper officer, the value should be redetermined as per Valuation Rules 4 to 9. In order to reject the transaction value, the proper officer should have, in the first place, some reason to doubt and if he has such a reason....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t say that the officer can only re-assess the Bill of Entry only once and it is a matter of everyday occurrence that the re-assessment is done more than once by the officer. 16. At times, if the importer had forgotten to claim an exemption notification which he was entitled to and realizes his mistake before the goods have been cleared, he would request the Assistant Commissioner to recall his Bill of Entry and apply that notification and re-assess the duty and if convinced, the would do so. Such re-assessments and modifications happen as a matter of course in every custom house. This process of assessment and re-assessment will come to an end, after the duty is paid and the proper officer issued an order under section 47 clearing the goods for home consumption (which is commonly known as customs 'Out of Charge'). As soon as this order is issued under section 47 of the Act, the goods cease to be imported goods under section 2(25) of the Act and cease to be dutiable goods under section 2(14) of the Act, the importer ceases to be the importer under section 2(26) of the Act qua those goods and therefore, there can be no further assessment or re-assessment of duty. Sections 2(14), 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. Section 46. Entry of goods on importation. - (1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronically on the customs automated system to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner: Prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... relating to the goods under this Act or under any other law for the time being in force. (5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice versa. "Section 47. Clearance of goods for home consumption. - (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption: Provided that such order may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria: Provided further that the Central Government may, by notification in the Official Gazette, permit certain class of importers to make deferred payment of said duty or any charges in such manner as may be provided by rules . (2) The import....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of assessment under section 18 of the Act if the assessment was provisional. d) Amendment of documents by the importer under section 149 of Act if permitted by the proper officer. e) Correction of clerical and arithmetical mistakes under section 153 of the Act by the officer. 18. Each of these methods of modification of the assessment are subject to some limitations indicated in the respective sections. However, none of these would apply while the assessment is still open and the 'Out of Charge' order has yet to be been issued. Therefore, section 28 would apply only after the out of charge order is issued and not before when the assessment is still open. If the importer self-assesses duty at certain amount and pays it and thereafter, the proper officer reassesses it to a higher amount, the importer has to pay duty reassessed. Section 28 would not apply to such cases because there is no short payment of duty; duty can be paid anytime before the clearance of goods and the officer will not clear the goods unless the duty is paid. It is for this reason that the 'relevant date' to reckon the time limit for issuing a notice under section 28 is the date on which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment and reassessment is done under section 17 of the Act by the proper officer. After the goods are cleared, if there is any short paid duty, a notice under section 28 must be issued treating the date of clearance of goods as the relevant date for limitation. In this case, the assessment was not even completed by the proper officer. Before that happened, the officers of the Commissioner of Customs (Preventive) intervened and examined the goods, got them tested instead of letting these happen in the normal course of assessment and re-assessment. The Joint Commissioner (Preventive) took over the role of the jurisdictional Assistant Commissioner of Customs and re-assessed the goods and passed an order. However, he held that part of the duty which he reassessed as recovery of duty not paid under section 28. Section 28, as discussed above, is not applicable at all to this case. This is a simple case of re-assessment of the duty which would have been done in the normal course by the jurisdictional Assistant Commissioner but which the Joint Commissioner (Preventive) did through his order. Therefore, the assertion of the Joint Commissioner that duty to the extent of Rs. 68,402/- was t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ply his mind and decide whether or not to confiscate the goods. The scope of the expression 'liable to' was examined by the Hon'ble Delhi High Court in Jain Exports Pvt. Ltd. vs Union of India [1987(29) ELT 753(Del.)] and the relevant portion of the judgment is as follows: "108. We have so far seen how the Collector's order is vitiated due to arbitrariness in the implementation of the policy and for other reasons. Let us look at the final operative order now. The Collector has confiscated the goods but released them on fine of Rs. 5 crores. Imposition of confiscation and penalty is a quasi judicial function. Therefore, the order confiscating the goods should be a reasoned order. But the impugned order is not a speaking order. While imposing the fine of Rs. 5 crores the Collector has held that the petitioner had "deliberately flouted" the provisions of law. Neither the law nor the peculiar facts of this case are even attempted to be discussed before taking an extreme step of confiscation and imposition of an excessively heavy penalty. Proviso to Section 125 lays down that the fine in lieu of confiscation shall not exceed the market price of the goods confiscated, less, in c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppear to have dealt with case as if he was vested with judicial discretion because he has not given any reason why the drastic publishment of confiscation should have been imposed on the appellants whereas two other similar merchants who had committed the same offence had been let off with a warning. (Page 448) On these findings the High Court set aside, the order of confiscation. (emphasis supplied)" 23. In the facts of this case, we find that although the goods were liable to confiscation, considering that there was only a 7% excess quantity over what was declared and that the goods were essentially a mixed lot or stock lot goods, we find that confiscation was not warranted. Consequently, the confiscation of the goods and the redemption fine by the Joint Commissioner, upheld by the Commissioner (Appeals) in the impugned order deserve to be set aside and are set aside. 24. Penalty equal to the duty is imposable under section 114A if the duty was not paid or short paid for certain reasons and recovered under section 28 of the Act. This section reads as follows: "Section 114A. Penalty for short-levy or non-levy of duty in certain cases. Where the dut....