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TMI Blog2013 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... while in some of the containers, the goods were not tallying with the Customs declaration inasmuch as the goods were already sorted, segregated and processed in the country of origin and hence they appeared to be finished goods required no further sorting, segregation, re-conditioning or re-processing. The lower authorities held that LOA had a condition that the imports and local purchase will be permitted on all items except those listed in prohibited list for import and export. However, there was no explicit mention as regards the goods permitted for DTA clearance. On the basis of examination, it appeared to the lower authorities that the importer had resorted to misdeclaration in description and quality of goods and non-declaration of parameters which is brand, grade, specification which are relevant to the value and it was revealed during the examination that correct grade of imported worn clothing though available with the importer, were not declared deliberately in the Bill of Entry at the time of import. Statements of the partners were recorded. Upon the conclusion of the investigation, a show cause notices were issued to the main importers as well as the partners of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts being already sorted/segregated were not covered by the LOA and were not required by the authorized operations and were therefore liable to be confiscated under Section 111(d) of the Customs Act, 1962. 2.3 It is sufficiently clear from Rule 29 that the Bill of Entry is not filed with the customs authority under Section 46 of the Customs Act, l962 but is filed with the Authorized officer of SEZ who has to register and assess the same under the SEZ Rules. The mere presentation of the SEZ registered/assessed Bill of Entry at the port to the customs officer itself operates as permission to transfer the goods from the port to the SEZ. Thus no act or role is attributed to the customs officer at the port for either assessment or permission to transfer the goods to the SEZ. In these circumstances it is entirely beyond the jurisdiction of the customs officer at the port to decide the issue whether the imported goods are required or not for the authorized operations and to confiscate the same under Section 111(d) of the Customs Act, 1962 on the basis that the same are not required for the authorized operations. 2.4 The Commissioner has in the impugned Order turned a blind eye to the spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 26 of the Order of the Commissioner that he has tried to justify, the enhancement of value done by him by venturing into issues of positive foreign exchange earnings by the SEZ unit, an area which is totally beyond his jurisdiction and which is the domain of the Development Commissioner. Apart from the fact that the issue of positive net foreign exchange earning is beyond his jurisdiction, the Commissioner is under a misconception that the same is to be decided with reference to the import value which he may determine under Section 14 of the Customs Act, 1962. The concept of net foreign exchange earning has nothing to do with the value determined under Section 14 of the Customs Act, 1962 and the same is decided with reference to the actual outflow and inflow of foreign exchange. It is not the case of the department in the Notice nor the finding of the Commissioner that the appellants have remitted any foreign exchange over and above the invoice value of the foreign supplier. In the absence of such a finding the re-determined value under Section 14 is of no decision of the Tribunal in the case of UOI v. Glaxo Laboratories (I) Ltd. - 1984 (17) E.L.T. 284 (Bom.). 3. ON MERITS : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorized operations. In the light of this finding the confiscation of the goods under Section 111(d) of the Customs Act, 1962 is patently erroneous and unsustainable in law. On valuation : 4.1 Without prejudice to the submissions that the Commissioner had no jurisdiction to assess the value and re-determine the same, it is submitted that even otherwise on merits the re-determination of value made by the Commissioner is untenable in law. 4.2 The contention in the Show cause notice that goods of Korean origin are of better quality and condition compared to goods of other countries of origin and that since the difference between the declared price of the imported Korean goods was not much when compared to price of goods of other countries, the transaction value was liable to be rejected is totally untenable in law. The appellants have submitted data of contemporary imports of goods of Korean origin to show that contemporary imports were at or about the same price as the Appellant's import price. The Commissioner has completely ignored this data. 4.3 The Commissioner has erred in relying on the valuation report of Accurate Appraisal Services without giving their cross-examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Entry were having non-declared goods. The main appellants herein declared the goods as per the Letter of Approval received by them, while the Customs authorities found various un-declared and un-related items like leather bags, purses, jackets, and carpets in the containers. Due to such un-declared and un-related items which were found, the lower authorities rejected the declared value and valuation was done by an independent valuer. We find that as regards items for which permission was granted to the appellant as per the LOA, they could import used worn clothing, for mutilation and reconditioning of clothes selected from old, used worn clothings. We find that strong force in the contentions raised by the ld. Counsel, the lower authority i.e. adjudicating authority could not have adjudicated the issue of requirement or whether the goods are covered by LOA or otherwise, is covered by Rule 27(2) of SEZ Rules, 2006. In the case in hand, we find that the adjudicating authority has, on inspection, come to a conclusion that the goods which were declared and covered by LOA were neatly packed and ready in all respect and hence, cannot be considered as the goods for LOA. In order to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fortified by the decision of the Tribunal in the case of Shilpa Creation Pvt. Ltd. - 2007 (220) E.L.T. 503 (Tri.-Kolkata). In view of this, we find that the goods which were found as per Letter of Approval in both the containers, could not be confiscated, nor their value could be determined by the Commissioner of Customs, Kandla as the said goods were going to SEZ and proper Bill of Entry was filed with the KASEZ authorities. 13. In view of this, the confiscation ordered by the adjudicating authority of the goods which are as per LOA is incorrect and beyond his powers to do so. Accordingly, the impugned order to that extent is set aside. 14. This takes us now to the goods which were mis-declared or un-declared i.e. the items like leather bags, purses, jackets, and carpets found in the container. In our view, these items, undisputedly, are not required and not permitted to be imported in SEZ as per the LOA granted to the appellant. The question arises here is whether the Customs authorities were correct in checking the consignment which were in the containers. In our view, on a specific intelligence, the Customs authorities, on suspicion, could inspect the consignment and on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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