TaxTMI 
TaxTMI 
2026 (3) TMI 1695
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....iate writ order or direction Respondent to issue certificate of waiver off demurrage, detention and ground rent charges. (c) Pass such other order or direction as deemed fit and proper by this Hon'ble Court in the facts and circumstances of the case." In W.P.No.17776/2025, petitioner seeks for the following reliefs: "(a) Issue a Writ of certiorari or any other writ, order or direction and set aside the communication dated: 23.05.2025 (Annexure-"A"); (b) Issue a Writ of Mandamus or any other appropriate Writ or order direction directing the release of the imported cargo in accordance with the Interim Orders of this Hon'ble Court dated: 29.04.2025 (Annexure-"D"). (c) Pass such other order or direction as deemed fit and proper by this Hon'ble Court in the facts and circumstances of the case." In W.P.No.24075/2025, petitioner seeks for the following reliefs:- "(a) Issue a Writ of certiorari or any other writ, order or direction set aside the SHOW CAUSE NOTICE NO. 674/2024-CUSTOMS-SIIB issued by the respondent in F.NO.CUS/SIIB/MISC/663/2024 ICD-White field Bengaluru dated: 17.12.2024 (Annexure-"B") as having become infructuous. ....
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....ation) Act, 1992 (for short, the "FTDR Act"). 3. Aggrieved by the impugned action of the respondents in seizure and detention of roasted areca nuts vide Seizure Memo dated 06.12.2024 and for release of the said detained goods, petitioner preferred the instant W.P.No.33823/2024 on 10.12.2024 seeking the aforesaid reliefs. 4. During the pendency of the aforesaid W.P.No.33823/20204, the respondents issued the impugned Show Cause Notice dated 17.12.2024 (SCN) to the Petitioner raising a re-determined demand of Rs.1,62,11,227/- against the roasted areca nuts imported vide BOE No. 5470956 dated 06.09.2024. In the impugned SCN, respondents rejected the classification of Roasted Areca nuts under tariff entry 2008 1920 as well as the valuation of imported goods based on MIP Rs.351 per kg. The SCN also stated that the petitioner had imported prohibited goods under Notification No.57/2015-20 dated 14.02.2023 which were liable for confiscation under Section 111(d), (m) and (o) of the Customs Act and raised a duty demand of Rs.1.78 crores under Section 28(4) together with interest under Section 28AA and penalty under Section 114A of the Customs Act. 5. The instant W.P.No.33823/2024 cam....
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....said Notification No.02/2025-26 dated 02.04.2025 issued by the respondents. On 15.10.2025, respondents issued a Notification 43/2025-26 classifying roasted areca nuts under ITC (HS) Code 20081991 and prohibiting its import if the CIF value is less than Rs. 351/- per Kg. Subsequently, on 07.11.2025, the Division Bench of this Court passed an order in the aforesaid W.A.No.770/2025 clarifying its earlier order dated 30.06.2025, by stating that "value of the imported consignment" to mean value determined by authorities under section 110A of Customs Act for furnishing bank guarantee by the petitioner. 10. The respondents have filed their objections and have contested the petition by disputing and denying the claim of the petitioner and have sought for dismissal of the petitions. 11. Heard Sri. V. Raghuraman, learned Senior Counsel for the petitioner and Sri. Arvind Kamath, learned Additional Solicitor for the respondents and perused the material on record. 12. In addition to reiterating the various contentions urged in the petitions and referring to the material on record, learned Senior counsel submitted that the impugned SCN, Communication, provisional assessment, seizure of ....
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....tion 15(1) of Customs Act and that date was 06.09.2024 when BOE was presented by the petitioner and hence, the subsequent Import Policy issued under Notifications dated 02.04.2025 and 15.10.2025 cannot be made applicable to the subject goods. 12.3 It was submitted that there was no dispute regarding valuation of Roasted Areca Nuts imported under BOE dated 06.09.2024, since neither impugned Seizure Memo / Show Cause Note allege undervaluation in terms of Section 14 of Customs Act and therefore, the transaction value based on the invoice value declared in the BOE is the value of imported consignment for payment of customs duty and the DGFT restriction does not fix value under the Customs Act but only prohibits consignments below a particular value but does not fix the value which can be done only under Section 14 of the Customs Act as is evident from Section 3 of FTDRA, 1992, especially when none of the proceedings have questioned the invoice value adopted by the petitioner. He invited my attention to the judgment of the Apex Court in the case of Century Metal Recycling Pvt. Ltd vs UOI 2019 - (367) ELT 3 (SC) to contend that the 'transaction value' or invoice value cannot be rejec....
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....ocess set out in Section 17 and the procedure envisaged under Section 28 is in the nature of a quasi-judicial proceeding with the issuance of the show cause notice by the proper officer followed by adjudication of such notices by the field customs officers and therefore, the nature of review under Section 28 is significantly different from the nature of assessment and re-assessment under Section 17 and the ambit of Section 28 has also been restricted to the review of assessments and reassessments done under Section 17 for ascertaining if there has been a short-levy, non-levy, part-payment, non-payment or erroneous refund. It was therefore submitted that these provisions have not been complied with by the respondents who have not followed the prescribed procedure and the impugned proceedings, SCN, etc., deserve to be quashed. 12.7 Learned Senior Counsel also submitted that the impugned Communication dated 23.05.2025 which states that goods imported under BOE dated 06.09.2024 has been provisionally assessed by classifying goods under Chapter 8 by applying value and duty to the said chapter heading as on that date is illegal and arbitrary, inasmuch as the impugned Communication dat....
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....ed. 14. I have given my anxious consideration to the rival submissions and perused the material on record. 15. The following points arise for consideration in the present petitions: i) Whether the impugned provisional assessment is in accordance with the provisions contained in the Customs Act, 1962 and the Rules made there under? ii) Whether the tariff classification adopted by the respondents in relation to the subject goods is legal, valid and proper? iii) Whether the valuation done by the respondents in relation to the subject goods is in accordance with law? iv) Whether the impugned show cause notice and all further proceedings pursuant thereto including confiscation etc., warrant interference by this Court in the present petitions? Re: Point No. (i); 16. A perusal of the undisputed material on record will indicate that after the subject goods were imported, the bills of entry were filed provisionally; in this context, it would be apposite to note that the import took place on 06.09.2024 where the bills of entry produced have been marked as "F" which means final but subsequently on 23.05.2025, the bills of entry have been changed....
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....mitted reports during October - November, 2024, to the effect that the subject goods were raw and dried Arecanuts and not roasted Arecanuts as contended by the petitioners. It is the grievance of the petitioners that subsequent to receiving the reports from ICAR - CPCRI, the respondents seized the subject goods during December, 2024 vide the impugned seizure and as such, the petitioners are before this Court by way of the present petitions putting forth various contentions along with documents. 4. The respondents have contested the petitions as well as the interim prayer by filing their statement of objections and documents specifically contending that the subject goods were raw Arecanuts and not roasted Arecanuts as claimed by the petitioners and that their claim was liable to be rejected. It is contended that since there were various discrepancies and ambiguities in the CRCL reports, Arecanuts were once again sent to the ICAR-CPCRI, which submitted reports stating that the Arecanuts were raw / dried Arecanuts and not roasted Arecanuts and in the light of the said reports by the ICAR-CPCRI, the respondents detained and seized the subject goods and have issued show cause n....
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.... and 2017 are applicable to the Arecanuts, which were detained and seized under the CBIC Circular No.46/2020- Customs dated 15.10.2020, which permit testing of goods of outside samples by laboratories other than Revenue Laboratories and as such, the respondents were fully justified in sending the samples to ICAR - CPCRI which has issued reports to the effect that Arecanuts imported by the petitioners are not roasted Arecanuts and the respondents correctly detained and seized the subject goods by the impugned seizure which does not warrant interference by this Court in the present petitions, which are liable to be dismissed. 8. I have given my anxious consideration to the rival submissions and perused the material on record. 9. A perusal of the material on record will indicate that both sides have urged various factual and legal contentions in support of their respective claims regarding the subject goods being roasted Arecanuts as claimed by the petitioners or raw / dried Arecanuts as claimed by the respondents; so also, there are disputes between the parties in relation to the applicability of the FSS Act and Regulations vis-a-viz the Customs Act to the subject A....
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.... are no facilities for testing microbiological parameters at present in on revenue laboratories, it has been decided by the competent authority to direct all laboratory In-charges to henceforth forward any sample pertaining to "Areca nut/nut" in any form to CRCL, New Delhi for testing until further orders. 3. This issues with the approval of Director (RLs). Yours faithfully, (V.Suresh) Joint Director(NFSG) 10. A perusal of the aforesaid communication will prima facie indicate that it is the CRCL which is the competent / designated laboratory to test "Arecanuts/Betelnuts" in any form and submit a report including whether they are raw, dried, roasted etc., and the contention of the respondents that the said reports of the CRCL cannot be considered or looked into cannot be accepted, especially in the light of the aforesaid communication issued by the respondents themselves. 11. Learned ASG has contended that the said communication merely states that all samples are to be forwarded to the CRCL only because of lack of facilities for testing microbiological parameters in other laboratories and there was no bar for the respondents to s....
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....sending the samples of areca nuts imported by petitioners. In the facts and circumstances existing in the present case, I deem it appropriate to direct the respondent to get the areca nuts in question tested from the accredited laboratory indicated in the respondent's statement of objections i.e., the documents produced by respondent - Annexure to Notification No.17/2023 dated 03.07.2023 of the Ministry of Commerce & Industry, Department of Commerce, Directorate General of Foreign Trade. i.e., Central Revenues Control Laboratory, Hillside Road, Pusa, New Delhi-110012. The respondent shall seek report on the following as indicated in the Annexure to the above Notification: i. Physical description of the sample: please comment on the size, shape, colour, nature and composition? ii. Whether these are de-husked or not? iii. Whether these are roasted areca nuts or not? iv. Whether these are sundried/moderately heated areca nuts? v. Whether the samples presented are raw areca or betel nuts (fresh or dried)? If not, what is the process that these nuts have undergone? vi. What are the percentage of arecoline and tannin....
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....aforesaid facts and circumstances prima facie indicate that in view of the fact that even according to the respondents who had themselves accepted not only that CRCL, New Delhi was a duly accredited laboratory but had also stated that they had no objection for the samples to be sent to CRCL, New Delhi and both the reports indicating that the subject goods are roasted Arecanuts and not raw / dried Arecanuts is yet another circumstance to come to the unmistakable conclusion that prima facie the reports of the CRCL, New Delhi deserves to be accepted and the contention of the respondents in this regard is liable to be rejected. 16. The respondents placed reliance upon CBIC Circular No.46/2020- Customs dated 15.10.2020, which reads as under: Circular No.46/2020-Customs F.No: 21019/08/2020-Cus(AS) Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes & Customs *** North Block, New Delhi Dated 15th October, 2020 To, All Pr. Chief Commissioners/Chief Commissioners of Customs, All Pr. Chief Commissioners/Chief Commissioners of Customs (....
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.... the customs samples, are preferably be tested in the Revenue Laboratories only. (ii) In case facility to test particular commodity or parameter is not available in the nearest Revenue Laboratory, such cases shall be referred to the nearest government laboratory where such facility is available. (iii) CRCL, New Delhi shall also function as Referral Laboratory along with other referral laboratories in Pharma, Textile & Food. (iv) Whenever CRCL laboratories are not in a position to carry out a test, they shall make use of nearest CDSCO/FSSAI approved laboratories/Textile Committee. 5. Keeping in view the above position, the relevant Custom House Laboratories are mapped with different Ports as per Annexure-A. Facilities available at CRCL, New Delhi as Referral Laboratory in Food testing are listed at Annexure-B. 6. Further, Revenue Laboratories are not equipped to test samples related to Animal Quarantine (AQCS), Plant Quarantine (PQCS) and Wild Life Crime Control Bureau (WCCB). Hence, the existing arrangements could continue in this regard. 7. The field formations under your jurisdiction may be sensitized suitably. 8. Any....
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....e respondents in suggesting the names of 4 Laboratories including 3 CRCL Laboratories and ICAR - CPCRI out of which, the respondents themselves had agreed, accepted and given consent for the samples to be referred to CRCL, New Delhi, which had reiterated its earlier reports by stating that the subject goods were roasted Arecanuts, the respondents are estopped from seeking rejection of the said reports by filing the present application which is devoid of merit and is liable to be rejected. 20. In view of the aforesaid facts and circumstances, I am of the considered opinion that prima facie, the seizure / detention of the subject goods by the respondents is illegal and contrary to law and facts and the relevant statutory provisions and the subject Arecanuts deserve to be released in favour of the petitioners pending disposal of the petitions subject to certain terms and conditions. 21. The respondents are directed to release the subject goods viz., Bill of Entry No.5470956 dated 06.09.2024 in W.P.No.33823/2024; Bill of Entry No.5040352 dated 13.08.2024 and Bill of Entry No.5164270 dated 21.08.2024 in W.P.No.33844/2024; and Bill of Entry No.5739104 dated 21.09.2024 i....
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.... security as required under Section 110A of the Customs Act, 1962 (for short, '1962 Act'). He would submit that the Custom Authorities dispute the case of the petitioners that it is roasted Areca Nuts. Learned Additional Solicitor General of India would further submits that to determine the tariff, the goods imported would fall under Chapter-VIII and not under Chapter-XX as contended by the petitioners. Further, he submits that the Areca Nuts are being imported by making misclassifications. Further, he submits that the respondents i.e., the petitioners before the Writ Court on release of the goods, may disappear and it would be difficult for the custom authorities to recover the duty and penalty. Therefore, learned Additional Solicitor General of India would submit that for release of the consignment, petitioners shall be put on certain conditions or furnish bank guarantee to the value of the consignment. He submits that the duty assessed in all the three petitions is around Rs.86 Crores. Thus, he prays for allowing the writ appeals. 4. Per contra, learned senior counsel Sri.Kiran S. Javali for respondents would submit that the imported consignment is roasted Areca Nuts an....
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....: Flowchart of Procedure for Clearance of Imported Goods under Customs 16.3 From a perusal of the above, it is clear that the department has not followed any of the procedures contemplated in Section 17 at all; assuming that the entire assessment is provisional, in terms of Section 18 of the Customs Act, 1962, it was incumbent upon the respondents to have indicated that the assessment are provisional but they have failed to do so; while the imports took place on 06.09.2024, even according to the respondents themselves, they marked the bill of entry as provisional only on 23.05.2025; it would be relevant to note that assuming that provisional assessments were adopted because of subjecting the goods to test under Section 18(1)(b), Section 18(1A) prescribes that if any document is needed from the importer, he shall submit the said documents within the time frame specified; it is clear that this provision does not apply as the respondents had not asked the petitioners for any documents at this stage. 16.3 It would be relevant to note that the relevant rules which were applicable on the date of import were Customs (Finalisation of Provisional Assessment) Regulations, 2018. Rule....
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....alise the said assessments and it was only on 23.05.2025 that the respondents marked the bills of entry as provisional assessments ostensibly in accordance with the aforesaid interim order dated 29.04.2025 which merely/only speaks of release of goods. 16.5 In fact, the communication sent to the petitioner vide 23.05.2025 talks of provisional release of goods where they incidentally mention provisional assessment; needless to state that these two terms are significantly different in their connotations as one deals with release of goods seized under Section 110A while the other is provisional assessment under Section 18. The importance of keeping time frames in doing provisional assessment is dealt with by the Apex Court in Century Metal Recycling's case supra wherein it was held as under: "The significance of Section 18 of the Act can be understood in light of the above provisions. Section 18 provides for provisional assessment of duty in cases specified in sub-section (1) of the Section. Clause (c) of sub-section (1) deals with cases where importer or exporter has produced necessary documents and furnished full information for assessment of duty but the proper officer d....
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....he impugned provisional assessment is contrary to law warranting interference by this Court. Point No.(i) is accordingly answered in favour of the petitioner. Re: Point No.(ii); 17. This point relates to the question as to whether the tariff classification adopted by the respondents in relation to the subject goods is legal, valid and proper; in this context, it is relevant to state that while ordinarily, this Court would not examine disputes in respect of classification which are to be left to the authorities, in the facts and circumstances obtaining in the instant case wherein the respondents have not acted in accordance with the assessment procedures prescribed in law and have resorted to drastic measures of seizing goods, it would be necessary to consider this aspect of the matter also. 17.1 In the interim order dated 29.04.2025 supra, I have already come to the prima facie conclusion that the subject imported goods are roasted areca nuts having a moisture content of 5.9% and that the sample is different from raw areca nuts as per the 2nd CRCL test report which was obtained with consent of both parties pursuant to orders of this Court thereby indicating that this te....
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....posite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. c. When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." (ii) Relevant entries under the Customs Tariff Act: Chapter 8 Edible fruit and nuts; peel of citrus fruit or melons NOTES 1. This Chapter does not cover inedible nuts or fruits. 2. Chilled fruits and nuts are to be classified in the same headings as the corresponding fresh fruits and nuts. 3. Dried fruit or dried nuts of this Chapter may be partially rehydrated, or treated for the following purposes: (a) for additional preservation or stabilization for example, by moderate heat treatment, sulphuring, the addition of sorbic acid or potassium sorbate; (b) to improve or maintain their ....
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....r roasted nuts and seeds: kg. 30% - 2008 19 30 --- Other nuts, otherwise prepared or preserved kg. 30% - 2008 19 40 --- Other roasted and fried vegetable products kg. 30% - 2008 19 90 --- Other kg. 30% - Chapter 21 Supplementary Notes In this Chapter "betel nut product known as Supari" means any preparation containing betel nuts, but not containing any one or more of the following ingredients, namely: lime, katha (catechu) and tobacco whether or not containing any other ingredients, such as cardamom, copra or menthol. Tariff Item Description Unit Rate of Duty Preferential Area Rate (1) (2) (3) (4) (5) ...... ............ .... ...... ....... 2106 Food preparations not elsewhere specified or included 2106 90 30 --- Betel nut product known as "Supari" kg. [150%] - ...... --- ........ ... ...... - (iii) Relevant portions of the HSN: HSN Explanatory Notes: Chapter 8 Edible fruit and nuts; peel....
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....Flavoured tea (heading 9.02); (d) Spices or other products of headings 9.04 to 09.10; (e) Food preparations, other than the products described in heading 21.03 or 21.04, containing more than 20% by weight of sausage, meat, meat offal, blood, fish or crustaceans, molluscs or other aquatic invertebrates, or any combination thereof (Chapter 16); (f) Yeast put up as a medicament or other products of heading 30.03 or 30:04; or (g) Prepared enzymes of heading 35.07. 2. Extracts of the substitutes referred to in Note 1 (b) above are to be classified in heading 21.01. 3. For the purposes of heading 21.04, the expression" homogenised composite food preparations" means preparations consisting of a finely homogenised mixture of two or more basic ingredients such as meal, fish, vegetables, fruit or nuts, put up for retail sale as infant food or for dietetic purposes, in containers of a net weight content not exceeding 250 g. For the application of this definition, no account is to be taken of small quantities of any ingredients which may be added to the mixture for seasoning, preservation or other purposes. Such preparations may contain a s....
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....fferent entries in the Tariff Schedule is by itself indicative of the fact that they are commercially different. However, the said contention was rejected by the Hon'ble Supreme Court in the following decisions, the relevant portion of which are extracted below: Sterling Foods v. State of Karnataka, (1986) 3 SCC 469=1986 (26) E.L.T. 3 (S.C.): "8. This conclusion on principle was not disputed by the High Court in its judgment and the High Court conceded that even after processing such as cutting of heads and tails, peeling, deveining, cleaning and freezing, shrimps, prawns and lobsters subjected to such processing continued in common parlance to be called "shrimps, prawns and lobsters". But the High Court took the view that Entry 13-a after the amendment effected in it with retrospective effect from September 1, 1978, made a distinction between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters. In view of this distinction made in entry 13-a, if was not possible to hold that processed or frozen shrimps, prawns and lobsters were the same commodity as raw shrimps, prawns and lobsters. The argument was that when the State legisla....
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....se of exigibility to State sales tax because even where the commodity is the same in the eyes of the persons dealing in it the State legislature may make a classification for determining liability to sales tax. This question, for the purpose of the Central Sales Tax Act, has to be determined on the basis of what is commonly known or recognised in commercial parlance. If in commercial parlance and according to what is understood in the trade by the dealer and the consumer, processed or frozen shrimps, prawns and lobsters retain their original character and identity as shrimps, prawns and lobsters and do not become a new distinct commodity and are as much "shrimps, prawns and lobsters", as raw shrimps, prawns and lobsters, sub-section (3) of Section 5 of the Central Sales Tax Act would be attracted and if with a view to fulfilling the existing contracts for export, the assessee purchases raw shrimps, prawns and lobsters and processes and freezes them, such purchases of raw shrimps, prawns and lobsters would be deemed to be in course of export so as to be exempt from liability to State sales tax." (emphasis supplied) 9. From a reading of the above judgment, it is clear tha....
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....Hon'ble Supreme Court: (i) CCE & Customs v. Phil Corpn. Ltd.,(2008) 17 SCC 569 = 2008 (223) E.L.T. 9 (SC): "30. In a number of cases, this Court has clearly enunciated that HSN is a safe guide for the purpose of deciding issues of classification. In the present case, the HSN Explanatory Notes to Chapter 20 categorically state that the products in question are so included in Chapter 20. The HSN Explanatory Notes to Chapter 20 also categorically state that its products are excluded from Chapter 8 as they fall in Chapter 20. In this view of the matter, the classification of the products in question has to be made under Chapter 20." (Emphasis Supplied) (ii) LML Ltd. v. Commr. of Customs, (2010) 10 SCC 503 = 2010 (258) E.L.T. 321 (SC)/[2010] 1 taxmann.com 333 (SC): "13. In CCE v. Wood Craft Products Ltd. [(1995) 3 SCC 454] it was held by this Court that as expressly stated in the Statement of Objects and Reasons of the Central Excise Tariff Act, 1985, the Central Excise Tariffs are based on the Harmonised System of Nomenclature (HSN) and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff cla....
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....ate. Note 1 (a) to Chapter 20 expressly excludes nuts prepared or preserved by the "processes specified in Chapters 7, 8 or 11", while classifying roasted nuts and seeds. It is thus evident that roasting and drying are treated to be distinct for the purposes of classification under the Customs Tariff Heading. Any construction to the contrary would result in rendering Note 1 (a) to Chapter 20 which excludes the process specified in Chapter 8 of CTA, redundant. While fresh or dried areca nuts are covered by 080280, roasted areca nuts are covered under 2008 19 20. Roasting is a process which has been treated to be distinct from drying and has been the basis for fixing the classification under Customs Tariff Heading under 2008 19 20. 11.2 Having examined the scope of CTH 08 and 20, it may be relevant to examine CTH 21 which is another entry dealing with Betel Nut known as "supari". Incidentally, CTH 21 06 includes betel nut product known as supari. The Note to Chapter 21 of Customs Tariff covers "betel nut products" known as "supari" containing betel nuts, but not containing anyone or more of the following ingredients viz., lime, katha (Catechu) and Tobacco whether or not cont....
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....iled, the special or specific statute ordinarily will control. The provision more specifically directed to the matter at issue prevails as an exception to or qualification of the provision which is more general in nature, provided that the specific or special statute clearly includes the matter in controversy (Edmond v. United States [137 L Ed 2d 917], Warden v. Marrero [41 LEd 2d 383])." 16. To sum up: (a) Roasting is a process treated to be distinct from the process of boiling and drying, in fixing the classification in respect of betel/areca nut under CTH. (b) Roasted betel/areca nut having been specifically classified under CTH 2008 19 20, the attempt to classify under CTH 08 02 80 would fall foul of the settled rule of construction that specific entry would prevail over general entry. (c) HSN explanatory notes is normally a safe guide in determining classification under CTH. Roasted areca/betel nut having been mentioned in CTH 2008 19 20 under HSN, the impugned Ruling is in consonance with HSN classification. (d) When there is a specific entry covering a product/commodity, the test of common parlance is irrelevant in determining cla....
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.... not binding on the parties as per Section 28J(2) of the customs Act. However, it is absolutely erroneous to say that the advance ruling obtained for commodity 'X" would not be applicable for actually imported commodity 'X" as in this case, the advance ruling would be binding between the parties as per Section 28J of the Customs Act. 29. Pertinently, the department has mixed the concept of advance ruling, which relates to proposed import with the actual importation of commodity by the importer. The department has sought to interdict the advance ruling on the ground that the commodity sought to be imported by the importer at the stage of advance ruling were not sent for independent testing or verification of the process, supporting documents, test reports etc. However, this court finds that such an argument by the department is completely alien to the concept of advance ruling. Section 28E(b) of the Customs Act inter-alia states that 'advance ruling' means a written decision on any of the questions referred to in Section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation. Further, Section 28I(2) of ....
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....has to be understood that at the stage of advance ruling, there is no actual commodity as everything is proposed and the CAAR is invited to give an advance ruling on the assumption that the process undertaken on the commodity proposed to be imported are identifiable in definite terms. 30. This Court finds that the CAAR has examined the process-flow for bringing the 'roasted areca nuts" in existence and having been convinced on the facts as well as the prevailing law of the subject, has arrived at a just decision that 'roasted areca nuts' is to be classified under chapter 20 of the Customs Tariff Act. According to this court, the department is not disputing the process undertaken by the importer, but is rather questioning the end product obtained by the process undertaken by them. The department, apparently seems to be vaguely trying to build a case that "roasted areca nuts" obtained even by the process demonstrated by the importer, could not be classified under Chapter 20 and should be classified under chapter 08. Having said so, it becomes incumbent on this court to refer to the two competing entries. Chapter 8 of the customs Tariff cover goods described as &#....
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.... form it assumes after the process as mentioned under the said chapter is undertaken on them. That is to say, the end product obtained by the process mentioned in this chapter becomes significant for its classification. It has been rightly held by the CAAR that there is a marked difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry-roasting, oil-roasting and fat-roasting referred in Chapter 20. Although, the terms dry-roasting, oil roasting and fat roasting are also not defined in the Customs Tariff Act, 1975, however, these terms have to be understood in a commonly accepted sense. Further, this court has no hesitation in subscribing to the view of CARR that in common trade parlance, "drying" is a method of food preservation by the removal of water content, whereas on the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, while drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting i....
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....ing under ITC(HS) Code 2008 19 20 of chapter 20 of ITC(HS), 2022, Schedule-I(Import Policy). The effect of the said notification is that the import policy of 'roasted Areca nuts' falling under ITC (HS) Code 08028090 and 2008 19 20 stands revised from "free" to "prohibited" and a kind of clarification has been sought to be given by the department, that as far as the Tariff entry 2008 19 20 relating to other roasted nuts and seeds are concerned, "roasted areca nuts" are not covered as they are specifically covered under 08028090. 36. In view of the aforesaid recent development, it can be safely concluded that a doubt always existed in the mind of the department relating to the tariff entry of 'roasted areca nuts", otherwise there was no occasion nor any need for issuance of the recent notification dated 02.04.2025, wherein the department was compelled to clarify and specify in clear terms that 'roasted areca nuts' are not covered under ITC (HS) Code 2008 19 20 as they are specifically covered under 08028090. 37. As a sequel to the above discussion and in view of the CAAR findings, this Court holds that "roasted areca nuts' have been rightly c....
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....that the importer can request the Additional Commissioner/Joint Commissioner of Custom for re-test. According to the learned Counsel, as per clause 2(c), when the Custom Officer provides the opportunity for second test, he must clearly indicate in writing where the second test can be carried out and such referral laboratory where desired retesting facility exists and in clause 2(d) it provides that the sample should be marked as immediate for avoiding delays and most importantly, as per clause 2(e) it provided the presence of the importer at the time of drawing of samples, and the importer or representative should be present and certify the sample drawn. It is the contention of the learned counsel for the importer that although an elaborate and time-tested procedure existed for drawing of the samples and contained the rights and duties of the parties, however none of the guidelines has been followed by the department while drawing samples in the first instance or at the time, the samples were sent for re-testing to the CRCL, New Delhi. On the other hand, the learned counsel appearing for the department, although did not dispute the existence of the said guidelines nor it confirmed ....
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....y provides that in case, if the test results of the first sample are adverse, then it is only the importer, who can make an Application for its Re-testing and only thereafter it could have been sent for Re-testing. However, in the present case, after sending the sample on 19/11/2024, the department on their own and without any reasons have sent another sample on 27/11/2024 to another laboratory after 5 days from receipt of report dated 22/11/2024 which dehors the provisions of the Regulations of 2017. Even, the Guidelines dated 12/07/2022, issued by Food Safety Standards Authority of India, has been seemingly ignored, as although the said guidelines provide for compliance for time-limit for analysis of sample under clause 2(ii), to be of 5 days from the receipt of the sample in case of 'Import', however the department has flouted the said time-period as is apparent from the tabular chart incorporated herein above, wherein the samples are received by the testing center after 9 and 25 days respectively. 42. There is no reasons forthcoming as to why and in what circumstances, the second samples were drawn by the department and that too without any application by the i....
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..../petitions. Further, it is directed that since, these 'roasted areca nuts' had been imported some six months ago, the aforesaid direction for release, is subject to the condition that the importer provides for treatment of these roasted areca nuts by 'Gamma Irradiation process', wherein the moulds and insect's in nuts can be sterilized/ treated as per the proposition of treatment laid down by the Bhaba Atomic research Centre, Trombay, Mumbai, to the compete satisfaction of the authority. 17.4 I am in respectful agreement with the view expressed in the aforesaid judgments and consequently, I am of the opinion that the subject imported goods are roasted areca nuts which merit classification under Chapter 20 for the following additional reasons: * Both the 1st and 2nd test reports of CRCL would conclusively establish that the goods are roasted areca nuts carrying a moisture content of 5.9%; * The goods are also different from raw areca nuts as is forthcoming from the CRCL reports which also mention that it is 'other than' dried which would mean that the moisture content has been brought down by a process of intense heating and not just drying w....
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....the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section]; (c) in the case of any other goods, on the date of payment of duty : Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft or the vehicle by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be. The provisions of this section shall not apply to baggage and goods imported by post." (emphasis supplied) 17. Section 12 specifies that the rates of duty on goods imported and exported are those which are provided in the Customs Tariff Act or in any other law. Section 12 does not indicate when the duties under those enactments will come into being or force. Section 15 specifies the date with reference to which the rate of duty a....
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....l of entry is deemed to have been presented on the date of the entry inwards or the arrival of the goods. Hence even where the bill of entry has been presented before the date of the entry inwards or the arrival of the aircraft or vehicle, the rate of duty is determined with reference to the date of entry inwards or the arrival of the aircraft or vehicle. This is a consequence of the deeming fiction under the proviso, as a result of which the presentation of the bill of entry, when filed prior to the arrival of the goods, is deemed to be on the date of the entry inwards or the arrival of the aircraft or vehicle. Hence, implicit in the provisions of Section 15(1) are the dual or (as counsel before the court described them) the twin requirements of (i) the presentation of the bill of entry; and (ii) the entry inwards of the vessel or, as the case may be, the arrival of the aircraft or vehicle. 19. Section 17 provides for the assessment of duty. Section 46 provides for the entry of goods on importation. Both the provisions of Section 17 and Section 46 have undergone legislative changes by Act 8 of 2011 and by the Finance Act of 2018. By Act 8 of 2011, Section 17 was substitut....
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....bill of entry shall make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, [and such other documents relating to the imported goods as may be prescribed], (4A) The importer who presents a bill of entry shall ensure the following, namely :- (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and (c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force........." (emphasis supplied) Sub-section (1) of Section 46 requires an importer of goods to make an entry by presenting a bill of entry for home consumption or warehousing "electronically on the customs automated system" to the proper officer "in such form and manner as may be prescribed". The word 'electronically' was introduced by Act 8 of 2011 with effect from 8 April, 2011. The provision for the presentation of the bill of entry on the customs automated system and in 'such form and manner....
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....o the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the 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." (emphasis supplied) Prior to its substitution by Amending Act 8 of 2011, Section 17 contained requirements for (i) examination and testing of goods; and (ii) assessment. Section 17, as it stood prior to substitution, was in the following terms : "17. Assessment of Duty. - (1) After an importer ha....
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....ection (1) of Section 17, the importer entering imported goods under Section 46, has to 'self-assess' duty (except as otherwise envisaged in the provisions of Section 85). Under sub-section (2), the proper officer may verify the entries made under Section 46 and the self-assessment made under sub-section (1) and may examine or test the goods. The selection of goods for verification has to be primarily on the basis of risk evaluation through appropriate selection criteria. Under sub-section (4), where it is found on verification, examination or testing of goods or otherwise that the self-assessment has not been done properly the proper officer is entrusted with a power of re-assessment. Sub-section (5) requires the passing of a speaking order upon re-assessment. 21. Section 47 provides for the clearance of goods for home consumption : "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 cl....
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....the arrival of goods, at a time not exceeding thirty days prior to their expected arrival. In tandem with the provisions of Section 46, Section 17 provides for the self-assessment of duty by the importer. Section 46(1) stipulates that the bill of entry has to be presented in the form and in the manner 'prescribed'. The expression 'prescribed' is defined in Section 2(32) to mean prescribed by regulations made under the Act. The Bill of Entry (Electronic Integrated Declaration and Paperless Processing) Regulations, 2018 have been made in pursuance of the enabling power conferred by Sections 46 and 47 and Section 157 which contains a general power to make regulations. Section 157(2)(a) was amended by the Finance Act, 2018 (Act 13 of 2018) to allow for the power to frame regulations on the form and manner of delivering or presenting inter alia a bill of entry. Regulation 2(c) of the 2018 Regulations defines the expression bill of entry in the following terms : "(c) "bill of entry" means electronic integrated declaration accepted and a unique number generated and assigned to that particular bill of entry by the Indian Customs Electronic Data Interchange System, and inc....
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....platform provided by the Central Board of Indirect Taxes and Customs. Sub-regulation (2) of Regulation 4 embodies a legal fiction. Regulation 4(2) stipulates that the bill of entry is deemed to have been filed and self-assessment completed when after the entry of the electronic integrated declaration on the customs automated system (or by data entry through a service centre) a bill of entry number is generated by the Indian Customs Electronic Data Interchange ("EDI") System. The self-assessed copy of the bill of entry may be electronically transmitted to the authorized person under the deeming fiction which is created by Regulation 4(2). Hence, the bill of entry is deemed to be filed and the self-assessment completed when the requirements of Regulation 4(2) are fulfilled namely by the (i) entry of the declaration on the customs automated system; and (ii) generation of a bill of entry number by the EDI system. Following this, the self-assessed copy of the bill of entry is electronically transmitted to the authorized person. 23. In terms of the provisions of Section 15(1)(a), in the case of goods which are entered for home consumption under Section 46, the date of presentati....
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....bmission of the bill of entry for home consumption or warehousing in an electronic format, on the customs automated system in the manner which is prescribed. The Regulations of 2018 stipulate the manner in which the bill of entry has to be presented. The deeming fiction in Regulation 4(2) specifies when presentation of the bill of entry and 'self- assessment' are complete. The rate of duty stands crystallized under Section 15(l)(a) once the deeming fiction under Regulation 4(2) comes into existence. The regulations have to be read together with the statutory provisions contained in Section 15(l)(a) and Section 46, while determining the rate of duty. G. Precedent 25. At this stage it is necessary to analyze the precedent on the subject. In Bharat Surfactants (Private) Limited v. Union of India [(1989) 4 SCC 21 = 1989 (43) E.L.T. 189 (S.C.)] ("Bharat Surfactants"), customs duty was imposed on the import of edible oil by the petitioners at the rate of 150 per cent on the basis that the import was made on the date of the inward entry, which was 31 July, 1981. The vessel arrived and registered in the Port of Bombay on 11 July, 1981 but since a berth was not available, ....
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.... to the date of the actual removal of goods from the warehouse, were made in the context of the provisions of Section 15(l)(b). In a subsequent decision in Dhiraj Lal H. Vohra v. Union of India [1993 Supp (3) SCC 453 = 1993 (66) E.L.T. 551 (S.C.)], Justice K. Ramaswamy speaking for a three judge Bench observed : "3. It is clear from a bare reading of these relevant provisions that the due date to calculate the rate of duty applicable to any imported goods shall be the rate and valuation in force, in the case of the goods entered for home consumption under Section 46, is the date on which the bill of entry in respect of such goods is presented under that section and in the case of goods cleared from a warehouse under Section 68, the date on which the goods are actually removed from the warehouse. By operation of the proviso if a bill of entry has been presented before the date of entry inwards the bill of entry shall be deemed to have been presented "on the date of such entry inwards" but would be subject to the operation of Sections 46 and 31(1) of the Act." In that case the ship had arrived at the Port of Madras on 20 February, 1989 and was ready to discharge her....
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....ed by the Act, as explained above, we see no room for any legitimate grievance of discrimination. There is also no presumption that rate of duty always goes up. It may also go down, in which case, the importer stands to gain." 26. The presentation of a bill of entry for home consumption under Section 46 is hence the definitive event with reference to which the customs' duty payable for import is determined. The duty in force on the day when the bill of entry for home consumption is presented is the duty which is applicable under Section 15(1)(a). It is in view of this principle that the entry of the vessel into territorial waters, before the presentation of the bill of entry, has been held not to fix the rate of duty where the rate of duty has undergone a change. H. Interpreting 'day' and 'date' 27. The expressions "day" and "date" have been construed in varying contexts in the precedents of this Court. The underlying feature of the decisions is that the content of those expressions is based on the context. In Raj Kumar Yadav v. Samir Kumar Mahaseth [(2005) 3 SCC 601], the limitation provided by Section 81 of the Representation of the People Act, 1951 exp....
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.... factual situation. 30. In Ahmadsahab Abdul Mulla (2) Dead by proposed Lrs. v. Bibijan [(2009) 5 SCC 462], the issue before this Court was whether the expression "date" in Article 54 of the Schedule to the Limitation Act (which prescribes the period of limitation for a suit for specific performance) is suggestive of a specific date in the calendar. The court observed : "11. The inevitable conclusion is that the expression "date fixed for the performance" is a crystallised notion. This is clear from the fact that the second part "time from which period begins to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on "when the plaintiff has notice that performance is refused". Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances." 31. The expression 'date' in Article 54 was held to be suggestive of a specified date in the calendar. In Pashupati ....
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.... Justice noted that the use of the expression 'from' may have one of two meanings namely on and after, that is including the named date, or merely after, that is excluding the named date. The Chief Justice took the view that it is necessary to look at the context and the circumstances of each case to arrive at the true construction. Having said this, the Chief Justice outlined the principles in the following extract on page 688 : "(1) that, if the named date is the beginning of a defined limited period, that, where there is a terminus ad quem as well as a terminus a quo, then prima facie the first day is excluded; (2) that, if the named date is the beginning of an indefinite period then prima facie the first day is included. I say prima facie because in my view there must be exceptions". In his view, the expression "from a named date" meant "on and after that day". Hence the date on which the notification was published in the official Gazette was held to apply to all plaints which were filed on 5 May, 1922. Justice Coutts Trotter, arrived at the same conclusion as the Chief Justice, following a different path, which he set out in the following observation....
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....se of the expression 'from' includes the first day. Nor was there any basis in principle in the submission of the Crown that the exclusion of the first day where the word "from" is used is only to be in case where there are two termini. The Learned Judge held that rules of equity and good conscience are by the Civil Courts Act to govern cases not governed by the Hindu and Mohammedan Laws. Voicing a powerful dissent, Justice Kumaraswami Sastri observed, on page 704 : "I do not think that the principles which govern, or the devices which are resorted to, by the Executive for the purpose of raising money by taxation ought to have any weight with us in determining whether the date of publication is to be included or excluded. I do not think the High Court is part of the tax gathering machinery of the Government or has any concern with the consequences to the Government of their decision on the construction of the rule. The rule, I take it, was passed by the Judges of the High Court in the exercise of the powers entrusted to them to control the administration of justice and the fees were raised because in the opinion of the Judges it was just and proper that litigants ought to ....
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....ued under the Customs Tariff Act, it will be a notification in force on that date and apply with effect from the commencement of that date. 34. The decisions to which a reference has been made earlier, have construed the expression "day" or, as the case may be, "date" in varying contexts ranging from the law governing elections, insurance and limitation. A general position in law has not been laid down that is divorced from subject, context and statute. In interpreting the statute, the court is guided by the terms of its provisions, the purpose underlying their adoption and the scheme which emerges from interrelated provisions and the nature of the provision. The court in the present case is interpreting the terms of a fiscal levy. The court here has to construe the scheme and provisions of the Customs Act and their relationship with the provisions of the Customs Tariff Act. The provision which falls for construction is Section 15(1) of which both clauses (a) and (b) use the expression "on the date". In clause (a), the rate of duty and valuation is the rate and valuation in force on the date on which a bill of entry is presented under Section 46 where goods are entered for....
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....he issuance of a notification enhancing the rate of duty under Section 8A of the Customs Tariff Act, the date on which the notification was issued will govern the rate applicable to all bills of entry, including those which were presented before the enhanced rate was notified. The submission cannot be accepted for several reasons. For one thing, it misses the significance of the expression "in force' which has been employed in the prefatory part of Section 15(1). A notification under Section 8A(1) of the Customs Tariff Act, even though it has the effect of amending the First Schedule, takes effect prospectively. Section 8A does not confer upon the notification an operation anterior to its making. In the language of the law, its operation is prospective. To accept the submission of the ASG would mean that the notification under Section 8A would have effect prior to its making, something which Parliament has not incorporated by language or intent. If, as we hold, the notification operates for the future beginning with the point of its adoption, it cannot operate to displace the rate of duty which is applicable when a bill of entry is presented for home consumption under Section 46. ....
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....light of the judgment of the Apex Court supra, no reliance can be placed upon the said notifications which purport to prohibit the import of roasted areca nuts below a particular value by the respondents whose contention in this regard also cannot be accepted. 18.2 Insofar as the question/issue of valuation is concerned, learned Senior Counsel for the petitioner is also correct in his submission that this aspect is covered by the provisions contained in Section 14 of the Customs At as held by the Apex Court in the case of Century Metal Recycling India Pvt.Ltd vs UOI - 2019 (367) ELT 3, wherein it was held as under: "6. We would begin by reproducing Section 14 of the Act and Rules 3 and 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 ('the 2007 Rules', for short) which read as under : "Section 14 : Valuation of Goods. (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for....
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....urrency or foreign currency into Indian currency; (b) "foreign currency" and "Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). xx xx xx Rules Rule 3. Determination of the method valuation : (1) Subject to Rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of Rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted : Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by th....
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.... officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation. - (1) For the removal of doubts, it is hereby declared that : - (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with Rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers. (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 a....
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....ue of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision. Section 14(1) is a deeming provision as it talks of 'deemed value' of such goods. Therefore, normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs to be followed by the Assessing Officer. This principle of arriving at transaction value to be the assessable value applies. This is also the effect of Rule 3(1) and Rule 4(1) of the Customs Valuation Rules, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4(2). As per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the tr....
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.... by the Board under Section 14(2) of the Act, then notwithstanding the transactional value of the imported goods under sub-section (1) to Section 14 of the Act, as per sub-section (2) to Section 14 of the Act the customs duty is payable as per the tariff value so fixed. In the present case, the Board has not considered it necessary and expedient to issue a notification under Section 14(2) of the Act to fix a tariff for the imported aluminium waste. 11. The second proviso to Section 14(1) deals with different situations, enumerated under the three clauses; (i) when buyers and sellers are deemed to be related; (ii) when there is no sale, or buyers and sellers are related or the price is not the sole consideration for sale, etc. and (iii) where the proper officer has reason to doubt the truth or accuracy of such value. When the conditions specified in the second proviso are satisfied, the transactional value for the purpose of charging of Customs duty is to be made as per rules framed in this behalf. 12. Rules 3 and 12 of the 2007 Rules i.e. Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 were enacted and enforced with effect from 10th Octobe....
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....le 12, which as noticed above enjoys primacy and pivotal position, applies where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods. It envisages a two-step verification and examination exercise. At the first instance, the proper officer must ask and call upon the importer to furnish further information including documents to justify the declared transactional value. The proper officer may thereafter accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on 'certain reasons' raise doubts about the truth or accuracy of declared value. 'Certain reasons' would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involvi....
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....can raise doubts as to the truth or accuracy of the declared value on 'certain reasons' which could include the grounds specified in clauses (a) to (f) in clause (iii) of the Explanation. (g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the 'reason t....
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.... and clause (iii) of Explanation to the 2007 Rules, the doubt must be reasonable and based on 'certain reasons'. The proper officer must record 'certain reasons' specified in (a) to (f) or similar grounds in writing at the second stage before he proceeds to discard the declared value and decides to determine the same by proceeding sequentially in accordance with Rules 4 to 9 of the 2007 Rules. It refers to a doubt which the proper officer possesses even after the importer has been asked to furnish further information including documents and evidence during the preliminary enquiry to clear his doubt about the truth and accuracy of the value declared. Therefore, there has to be a preliminary enquiry by the proper officer in which the importer must be given an opportunity for clarification of the doubts of the officer by furnishing of documents and evidence as to the accuracy or truth of the value declared. It is only in case where the doubt of the proper officer persists after conducting examination of information including documents or on account of non-furnishing of information that the procedure for further investigation and determination of value in terms of Rules 4 to 9 would co....
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....ect goods warrant interference by this Court in the present petitions. 19.1 A perusal of the material on record will indicate that the impugned SCN and proposed duty demand and confiscation are clearly premature having been done on 17.12.2024, particularly when even according to the respondents themselves, the provisional assessment was resorted to only on 23.5.2025; even assuming that provisional assessment was done on the day of import i.e., on 6.9.2024, show cause notices under Section 28 or Section 124 could not have been issued unless the assessments were finalised in the light of the judgment of the Apex Court in the case of CC vs Canon India Pvt.Ltd - 2024 (11) TMI 391 (SC) wherein it was held as under: "iv. Scheme of Sections 17 and 28 of the Act, 1962 95. Section 17 read with Sections 46 and 47 of the Act, 1962 deals with the assessment and re-assessment at the first instance that is, upon entry of the consignments and clearance of bill(s) of entry. The amendment to Section 17 introduces the process of self-assessment and subsequent re-assessment upon verification by the proper officer, if so required, for undertaking a check at the first instance. ....
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.... the amount of interest which has not been so paid or part-paid. ^3 [Provided that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred.] (2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information shall not serve any notice under clause (a) of that sub-section in respect of the duty or interest so paid or any penalty leviable under the provisions of this Act or the rules made there under in respect of such duty or interest. ^4 [Provided that where notice under clause (a) of sub-section (1) has been served and the proper officer is of the opinion that the amount of duty along with interest payable thereon under section 28AA or the amount of interest, as the case may be, as specified in the notice, has been paid in full within thirty days from the date of receipt of the notice, no penalty shall be levied and the proceedings against such person or other persons to whom the said notice is served under clause (a) of sub-section (1) shall be deemed ....
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....f the-opinion- (i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) or subsection (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or (ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable, then the proper officer shall proceed to issue the notice as provided for in clause (a) of sub-section (1) in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of 15[two years] shall be computed from the date of receipt of information under sub-section (5). (7) In computing the period of 16[two years] referred to in clause (a) of sub-section (1) or five years referred to in subsection (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded. ^19 [(7A) Save as otherwise provided in clause (a) of subsection (1) or in sub-se....
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....ction (8) and in such case, the time specified in sub-section (9) shall apply not from the date of notice, but from the date when such reason ceases to exist.] (10) Where an order determining the duty is passed by the proper officer under this section, the person liable to pay the said duty shall pay the amount so determined along with the interest due on such amount whether or not the amount of interest is specified separately. ^23 [(10A) Notwithstanding anything contained in this Act, where an order for refund under sub-section (2) of section 27 is modified in any appeal and the amount of refund so determined is less than the amount refunded under said subsection, the excess amount so refunded shall be recovered along with interest thereon at the rate fixed by the Central Government under section 28AA, from the date of refund up to the date of recovery, as a sum due to the Government. (10B) A notice issued under sub-section (4) shall be deemed to have been issued under sub-section (1), if such notice demanding duty is held not sustainable in any proceeding under this Act, including at any stage of appeal, for the reason that the charges of collusion or ....
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....ty, interest and penalty under the proviso to sub-section (2) or under sub-section (5), as the case may be, is made in full within thirty days from the date on which such assent is received.] ^25 [Explanation 4.-For the removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or in any other provision of this Act or the rules or regulations made thereunder, or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, short-payment or erroneous refund, prior to the 29th day of March, 2018, being the date of commencement of the Finance Act, 2018 (13 of 2018.), such notice shall continue to be governed by the provisions of section 28 as it stood immediately before such date.] 19.3 So also, Section 124 of the Customs Act, reads as under: SECTION 124. Issue of show cause notice before confiscation of goods, etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person - (a) is given a notice ....
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....scation on the subject goods imported by the petitioner and all further proceedings pursuant thereto including confiscation of the subject goods deserve to be quashed by directing the respondents to release the subject goods in favour of the petitioner within a stipulated time frame by issuing certain directions in this regard. Accordingly, Point No.(iv) is also answered in favour of the petitioner. 20. In the result, I pass the following: ORDER (i) W.P.No. 33823/2024 is hereby allowed. (ii) The impugned seizure memorandum at Annexure-D dated 06.12.2024 is hereby quashed. (iii) W.P.No.17776/2025 is hereby allowed. (iv) The impugned communication at Annexure-A dated 23.05.2025 is hereby quashed. (v) W.P.No.24075/2025 is hereby allowed. (vi) The impugned show cause notice at Annexure - B dated 17.12.2024 is hereby quashed. (vii) The respondents are hereby directed to release the subject imported goods in favour of the petitioner within a period of 7 days from the date of receipt of a copy of this order by adopting the classification and valuation adopted by the petitioner and as the petitioner - importer has alre....