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TMI Blog1987 (2) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... sdeclaration of value entailing confiscation of the imported goods under Section 111(d) (m) and levy of penalties under Sections 112 and 117 of the Act? If so what should be the penalties? 2. The facts, in so far material, are - (a) the appellant had entered into two agreements - the first executed on 27-3-1973 for supply of technical know-how, engineering, and documentation for operational facilities and the second executed a little later for technical services with M/s. General Tire International Company, Ohio, United States; (b) the aforesaid agreements (which overlap to a certain extent), inter alia, provided for payment of U.S. Dollars 3% on the F.O.B. value of such equipment or machinery purchased- with the aid, advice and supervision of M/s. General Tire International Company; (c) the Appellant registered in 1976 contracts for availing of the benefit of assessment of the goods to be imported pursuant thereto of the Project Imports (Registration of Contract) Regulations, 1965. A number of imports had taken place and Bills of Entry in respect of such imports were duly assessed to duty on the basis of their invoice values; (d) no mention was, however, made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its exercise and would fall under sub-section (3) of Section 131. This, however, is not a case of an erroneous refund. (c) (i) It will, however, be observed that while, in terms of subsection (3) of the erstwhile Section 131 of the Act, the Central Government may, of its own motion, modify or annul any order under Section 128 (which provides for an appeal to the Board against an order in adjudication by the Collector), sub-section (5) prescribes for the issue of a notice to show cause within the time limit specified in Section 28, where the Central Government is of opinion that any duty of Customs has not been levied or has been short levied . (ii) Although not specified, a notice has yet to be issued as a prelude to any action proposed under sub-section (3), so that the action ultimately taken in modification or annulment of the order of the Board is not violative of the principles of natural justice. (iii) The mere citation of sub-section (3) in the notice to show cause is not conclusive on the issue as to whether it is more properly one issued under sub-section (5). (iv) Even so, a condition precedent for the issue of a notice under sub-section (5) is the opinion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(2) of the Central Excises Act be lost sight of. While, the limitation prescribed for commencement of revision proceedings in an ordinary case of illegality, incorrectness or impropriety was a period of one year from the date of the decision or order, the notice to be issued in terms of the third proviso is to be given within the time limit specified in Section 11A of the Central Excises Act . This being so, it cannot be that both the second and third provisos apply to the same set of facts and every time an illegal, incorrect or improper order is sought to be revised, it is also a case where a non-levy or short levy is also involved as could be inferred from a history of the case or material other than the notice itself. Such a construction would render one of the provisos nugatory; (iv) when one speaks of a period of limitation or time limit specified what is meant is the actual period of time reckoned from a date or time specified when it commences to run. A period of time without specifying when it commences is meaningless. The time limit specified in Section 11A accordingly comprehends the relevant date as well as for the commencement of that period. In Section 11A it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one is not to take into account the end result of the exercise of that jurisdiction. The conditions prescribed for the exercise of one or the other of the jurisdictions cannot be jettisoned just because of the end result of the exercise thereof which may turn out to be identical partly with the condition precedent for the exercise of one of the jurisdictions. Jurisdiction depends for its exercise on the assumption of the existence of certain facts and circumstances prior to its invocation. In the course of its exercise, it may also so happen that the facts and circumstances assumed to exist are found, in fact, never to have existed. That by itself does not mean and imply that the jurisdiction could neither have been invoked or exercised. If such be the case, no jurisdiction can ever be invoked or exercised. The end result can, therefore, not be confused with the assumption underlying the invocation of jurisdiction or the condition precedent for the exercise thereof. (e) (i) Reverting to the facts of this case, for the reasons stated supra, we have, necessarily, to hold that the jurisdiction that was expressly invoked in terms of sub-section (3) is not to be confused with the juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mally available for sale in the course of international trade . The evidence is all to the contrary. The assessable value cannot, in the circumstances be determined under Section 14(1)(a). Seeing that the imported goods were machinery made to specification and not off the shelf, the assessable value of the imports could be only determined under Rule 8 of the Customs Valuation Rules and no other. That Rule provides for the determination of assessable value by best judgment. Such a determination cannot be arbitrary but should take all relevant factors into account. The commission payable or paid to M/s. General Tyre is not an irrelevant factor in any such determination. Nor is it seriously contested that the commission was disclosed at any stage of the proceedings before the assessment of the various imports to duty. We, therefore, find, in the ciccumstances, that the order of the Board is not correct. It is, therefore, set aside. 5. However, we find from the order of the Collector that while refraining from confiscation of the goods imported, he levies two penalties - one of Rs. 1,000/- under Section 46(4) of the Act and the other in a sum of Rs. 50,000/- under Section 112 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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