1996 (12) TMI 62 - HC - Customs

Summary

Issues Involved:
1. Jurisdiction of Customs Authorities to endorse exports in the DEEC Book.
2. Power of Customs Authorities to determine the value of exported goods.
3. Validity of the Customs Commissioner's order regarding the FOB value and penalty.

Summary:

1. Jurisdiction of Customs Authorities to Endorse Exports in the DEEC Book:
The core issue was whether customs authorities could refuse to endorse exports in the DEEC Book Part II after the export was effected. The writ petitioner argued that customs authorities were duty-bound to make the endorsement and had no jurisdiction to question the valuation of the goods. The court held that the customs authorities are required to certify the correctness of the value of the goods under the DEEC Scheme and cannot be compelled to accept the declared value as correct.

2. Power of Customs Authorities to Determine the Value of Exported Goods:
The court examined the scope of the customs authorities' power to assess the value of goods. It was argued that the power of the customs authorities to assess the value of goods is limited to Section 14 of the Customs Act, 1962, which pertains to cases where duty is leviable. The court, however, concluded that the customs authorities' power to assess the value of goods is not limited to cases where the goods are assessable to duty. The customs authorities must follow the mode prescribed in Section 14(1) of the Act to ascertain the correct value of the goods.

3. Validity of the Customs Commissioner's Order Regarding the FOB Value and Penalty:
The Commissioner of Customs had determined the FOB value of the export consignment to be Rs. 92,000/- against the declared value of Rs. 48,46,850/- and imposed a penalty of Rs. 20 lakhs u/s 114 of the Customs Act. The court found that the order of the Commissioner could not be sustained and should be set aside and remanded for re-adjudication after observing the principles of natural justice and in accordance with law. The Commissioner must re-determine the matter from the point of the issue of the show cause notice, providing the petitioner with a reasonable opportunity of hearing.

Conclusion:
The court set aside the interim order dated 24th March 1995 and the order of the Commissioner of Customs. The matter was remanded back to the Commissioner for re-determination. The writ petition was dismissed, and there was no order as to costs. The judgment emphasized that customs authorities have the jurisdiction to determine the value of exported goods under the DEEC Scheme and must follow the procedure prescribed in Section 14(1) of the Customs Act.