2017 (5) TMI 929 - AT - Customs

Valuation of confiscated goods - 4247.56 carats of rough diamonds - The exporter had declared a value of ₹ 28,57,000 in the shipping bill which was re-assessed at ₹ 72,76,799 and subject to proceedings u/s 113 and 114 of CA, 1962 - case of appellant is that the adoption of the value recommended by the trade panel would, therefore, not be in consonance with the directions of the Tribunal - whether invocation of section 113 (i) of Customs Act, 1962 was appropriate? - Held that - It is admitted that there is no revenue involvement in the dispute and that no duties are liable to be collected on the declared or enhanced value. In these circumstances, the initiation of proceedings to reassess the value is, itself, questionable - It is quite clear from the findings of the original authority that an enhancement of value by customs authorities in the shipping bill or bill of entry does not carry with it the concomitant obligation to repatriate or remit the differential value from, or to, the buyer, or supplier, respectively. In the circumstances, the disallowance of exports even after imposition of redemption fine is not justified by law. There is no justifiable reason for the adjudicating authority to accept the value recommended by trade panel and there is also no finding to sustain the invoking of section 113 (i) of CA, 1962 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confiscation of rough diamonds for export, valuation dispute, compliance with Tribunal's directions, invoking section 113 of Customs Act, 1962, acceptance of trade panel's valuation, justification for confiscation.

Analysis:
The case involves a challenge to the confiscation of rough diamonds meant for export, valued at a discrepancy between the exporter's declaration and the reassessed value. The Tribunal had directed a revaluation by independent experts, leading to a trade panel determining the value at ?58.57 lakhs. However, the appellant contested the confiscation, alleging non-compliance with Tribunal's directions and disputing the application of section 113 of the Customs Act, 1962.

The Commissioner of Customs upheld the confiscation, prompting the appeal. The Tribunal noted the lack of clarity regarding the trade panel's expertise and the absence of the panel's report made available to the appellant. The Tribunal found discrepancies in the values provided and concluded that adopting the trade panel's value did not align with its directions, indicating uncertainty in the adjudicating authority's decision.

Furthermore, the Tribunal highlighted that no revenue was involved in the dispute, questioning the necessity of reassessing the value. It emphasized that confiscation provisions should align with the Customs Act's objectives and criticized the arbitrary exercise of power by the Commissioner of Customs. The Tribunal ruled that the confiscation was unjustified, as there was no ban on diamond exports and no legal basis for disallowing exports post a redemption fine.

Ultimately, the Tribunal set aside the impugned order, finding no valid grounds to uphold the confiscation. The judgment emphasizes adherence to procedural fairness, expert evaluation, and legal justifiability in customs valuation disputes, ensuring compliance with statutory provisions and preventing arbitrary exercises of power.