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TMI Blog2019 (9) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... lized thus in the absence of laying down some period as reasonable period, there would never be conclusion of assessment and it would be at the whims and fancies of Respondent to open any assessment at any point of time. Under Customs Act, 1962 every consignment passes through scrutiny of team of Customs officers and there may be mistake on the part of customs officers in one or two cases but cannot be so in every shipping bill - Period of 5 years for all purposes is reasonable period so we hold that any notice issued under Rule 16 of Drawback Rules, 1995 beyond 5 years from the date of export is bad in the eyes of law and barred by limitation - decided in favor of petitioner. Whether re-enacted Drawback Rules, 2017 w.e.f. 1.10.2017 save Show Cause Notice dated 9.2.2018 (Annexure P-9) issued under Rule 16 of repealed Drawback Rules, 1995? - HELD THAT:- By inserting Rule 20(2) government has shown its different intention and Rule 20(2) of Drawback Rules, 2017 does not save show cause notices relating to demand of already paid duty drawback, therefore, Respondent cannot initiate or continue with show cause notice ( P-9 ) issued under Rule 16 of erstwhile Drawback Rules, 1995. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs Act, 1962 (for short 'Act, 1962 '), Section 37 of the Central Excise Act, 1944 and Section 93A of the Finance Act, 1994. As required under Section 50 of the 1962 Act, the Petitioner as and when exported goods, filed shipping bills declaring description, quantity, value, name of buyer etc. A team of Custom Officers i.e. Inspector, Superintendent and Assistant Commissioner physically verified export goods and noted on shipping bill "as per invoice and packing list" or "value reduced for the purpose of duty drawback". The goods were examined and assessed in terms of Section 17 of the 1962 Act. It would be relevant to notice that prior to 8.4.2011, there was no self assessment which was introduced by Finance Act, 2011 w.e.f 8.4.2011. The Petitioner concededly exported goods vide 10 Shipping Bills during 2010 and 2 Shipping Bills during 2012 which are subject matter of present writ petition. The Custom Officers permitted export of goods in terms of Section 51 of the Customs Act, 1962. As conceded by both parties, no separate assessment order was passed and drawback was released after export of goods. The Petitioner realized export proceeds nevertheless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eyes of law. Rules are piece of subordinate legislation and primary legislation i.e. Customs Act, 1962 has fixed outer limit of 5 years so any notice under any Rule beyond 5 years is bad in the eyes of law. The impugned notice (P-9) has been issued under Rule 16 of Drawback Rules, 1995 whereunder no limitation period has been prescribed. Gujrat High Court in the case of Padmini Exports Vs UOI 2012 (284) ELT 325 and Pratibha Syntex Ltd 2013 (287) ELT 290 has held that Section 28 of the Act, 1962 is not applicable in such cases of duty drawback, however three years period is reasonable period. Still further, as per judgment of Hon'ble Supreme Court in the case of State of Punjab versus Bhatinda District Co-Op. Milk P. Union Ltd. 2007 (217) ELT 325 revisional jurisdiction cannot be invoked after a reasonable period of limitation. There are a number of judgments under different statutes wherein Hon'ble Courts time to time have held that no action can be taken after reasonable period of limitation when no limitation period is prescribed under the statute. This Court in the case of Gupta Smelters Pvt. Ltd. versus Union of India 2019 (365) ELT 77 (P&H) has set aside show cause notice as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid by mistake or error like calculation error and excess drawback means drawback which after redetermination of entitlement of drawback is declared as excess drawback. It is settled law that demand cannot be made in the absence of prescribed mechanism which is absent in Drawback Rules, 1995. In support of his argument, Ld. Counsel cited judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise versus Larsen and Toubro 2015 (39) STR 913 and this court judgment in the case of Laqshya Media Pvt. Ltd. Vs State of Punjab and Others CWP No. 4215 of 2016. (iv) Prior to 08.04.2011, there was no self assessment and it was framed by Proper Officer under Section 17 of the Customs Act, 1962 which w.e.f. 08.04.2011 was substituted and as per substituted Section, scheme of self assessment was introduced. The Petitioner exported goods under physical supervision of the Respondent Officers who prior to April' 2011 made assessment and after April' 2011 verified self assessment and either accepted or revised declared value for the purpose of drawback. Section 14 of Act, 1962 and Rule 8 & 6 of Valuation Rules, 2007 prescribe method to determine value of export goods. Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India & Customs-Respondent No. 1 & 3 and Mr. Sunish Bindlish, Sr. Standing Counsel appearing for DRI/Respondent No. 2, on the question of limitation and maintainability of writ petition contended that no limitation period has been prescribed under Rule 16 of Drawback Rules, 1995, therefore, proceedings could be initiated within a reasonable time. It is well settled that what would be 'reasonable period' would have to be decided in the facts and circumstances of each case. In support of their contention, Ld. Counsels cited judgment of Hon'ble Supreme Court in the case of Collector of Central Excise, Jaipur Vs Raghuvar India Ltd. 2000 (118) ELT 311 (SC), Govt. of India Vs Citadel Fine Pharmaceuticals 1989 (42) ELT 515 (SC) and Karnataka High Court in the case of Gemini Dying and Printing Mills Limited Vs Commissioner of Customs, Bangalore 2017 (51) STR 255 (Kar.), Gujrat High Court in the case of Dadri Inorganic Private Limited Vs Commissioner of Customs 2010 (260) ELT 61 (Guj). Mr. Sunish Bindlish further contended that the judgments cited by counsel for the Petitioners hold that show cause notice should be adjudicated within reasonable period and do not hold that it shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, repeal of Drawback Rules, 1995 has no effect on pending cases. On the question of mechanism both the State Counsels contended that Drawback is sanctioned as some percentage of FOB Value. As per Rule 8 of the Valuation Rules, 2007 which are framed in terms of Section 14 of Act, 1962 the Proper Officer has power to reject declared value, in case he has reason to doubt the truth or accuracy of the value. The Proper Officer after rejecting value may determine value as per Rule 6 of the Valuation Rules, 2007. It clearly shows that there is complete mechanism to reject declared value and determine fresh value. In the present case, the value has been rejected under Rule 8 and show cause notice proposes to reassess value under Rule 6 of the Valuation Rules, 2007. As per Section 75(2)(ab) of the Customs Act, 1962 Central Government may specify the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub-section (1) or interest chargeable thereon. Section 14 of the Customs Act, 1962 and Valuation Rules, 2007 prescribe procedure to reject declared value and assess value of export goods. On the question of power to reassess value of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of value under Valuation Rules, 2007, still procedure has been prescribed under Section 28 of the Act, 1962 thus it is wrong to contend that there is no need of machinery under Rule 16 of the Drawback Rules, 1995. In support of his contention he relied upon judgment in case of Eternit Everest Ltd. Vs UOI 1997 (89) ELT 28 (Mad)wherein Madras High Court quashed show cause notice issued under Section 11D of the Central Excise Act, 1944 holding that no procedure has been prescribed to raise demand of duty collected in excess of duty liability. Hon'ble Supreme Court in the case of Shabina Abraham Vs CCE 2015 (232) ELT 372 (S.C) has held that in the absence of prescribed procedure duty cannot be demanded from legal heir or estate of sole proprietor in case of his death. As per Section 147 of the Income Tax Act, 1961 an Income Tax Officer may reassess already assessed income, similarly as per Section 29 of the Punjab VAT Act, 2005, Designated Officer may re-assess already assessed VAT liability, whereas Customs Officers do not carry any such power to reassess a shipping bill which has already been assessed by them. Rule 1 (3) of Valuation Rules, 2007 categorically provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the purposes of this section - (a) "rate of exchange" means the rate of exchange - (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency 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). Section 17 applicable w.e.f. 8.4.2011: SECTION 17. Assessment of duty. - (1) An importer entering any imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. Applicable prior to 8.4.2011: SECTION 17. Assessment of duty. - (1) After an importer has entered any imported goods under section 46, or an exporter has entered any export goods under section 50 the imported goods or the export goods, as the case may be, or such part thereof as may be necessary may, without undue delay, be examined and tested by the proper officer. (2) After such examination and testing, the duty, if any, leviable on such goods shall, save as otherwise provided in Section 85, be assessed. (3) For the purpose of assessing duty under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker's note, policy of insurance, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which it is in his power to produce or furnish, and thereupon the importer, exporter or such othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, if any, relating to the goods under this Act or under any other law for the time being in force. SECTION 51. Clearance of goods for exportation. (1) Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the 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 clearance and loading of the goods for exportation : Provided that such order may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria : Provided further that the Central Government may, by notification in the Official Gazette, permit certain class of exporters to make deferred payment of said duty or any charges in such manner as may be provided by rules. (2) Where the exporter fails to pay the export duty, either in full or in part, under the proviso to sub-section (1) by such due date as may be specified by rules, he shall pay interest on said duty not paid or short-paid till the date of its payment at such rate, not below five per cent. and not exceeding thirty-six pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than the reasons of collusion or any wilful mis-statement or suppression of facts,- (a) the proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, if the proper officer is of 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 subsection (1) or sub-section (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 one year shall be computed from the date of receipt of information under sub-section (5). (7) In computing the period of one year referred to in clause (a) of sub-section (1) or five years referred to in sub-section (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. (8) The proper officer shall, after allowing the concerned person an opportunity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice has been issued under sub-section (1) or sub-section (4) as the case may be, but an order determining duty under sub-section (8) has not been passed before the date on which the Finance Bill, 2015 receives the assent of the president, shall, without prejudice to the provisions of sections 135, 135A and 140, as may be applicable be deemed to be concluded, if the payment of duty, 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. SECTION 75. - Drawback on imported materials used in the manufacture of goods which are exported - (1) Where it appears to the Central Government that in respect of goods of any class or description manufactured, processed or on which any operation has been carried out in India being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under section 51 by the proper officer, or being goods entered for export by post under section 82 and in respect of which an order permitting clearance for exportation has been made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on the imported materials used in the manufacture or processing of the goods or carrying out any operation on the goods or as is specified in the rules as the average amount of duty paid on the materials of that class or description used in the manufacture or processing of export goods or carrying out any operation on export goods of that class or description either by manufacturers generally or by persons processing or carrying on any operation generally or by any particular manufacturer or particular person carrying on any process or other operation, and interest if any payable thereon; (aa) for specifying the goods in respect of which no drawback shall be allowed; (ab) for specifying the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub-section (1) or interest chargeable thereon; (b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary; (c) for requiring the manufacturer or the person carrying on any process or other operation to give access to every part of his manufactory to any officer of customs specially authorised in this behalf by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 6. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth or accuracy of the declared value after the said enquiry in consultation with the exporter. (iii) The proper officer shall have the powers to raise doubts on the declared value based on certain reasons which may include - (a) the significant variation in value at which goods of like kind and quality exported at or about the same time in comparable quantities in a comparable commercial transaction were assessed. (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the misdeclaration of goods in parameters such as description, quality, quantity, year of manufacture or production. Clause (a) and (c) of Rule 2, Rule 16 and 16 A of Drawback Rules, 1995: Rule 2 (a) "drawback" in relation to any goods manufactured in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the receipt of the said order: Provided that where a part of the sale proceeds has been realized, the amount of drawback to be recovered shall be the amount equal to that portion of the amount of drawback paid which bears the same proportion as the portion of the sale proceeds not realized bears to the total amount of sale proceeds: (3) Where the exporter fails to repay the amount under sub-rule (2) within said period of sixty days referred to in sub-rule (2), it shall be recovered in the manner laid down in rule 16. (4) Where the sale proceeds are realized by the exporter after the amount of drawback has been recovered from him under subrule (2) or sub-rule (3) and the exporter produces evidence about such realization within one year from the date of such recovery of the amount of drawback, the amount of drawback so recovered shall be repaid by the Assistant Commissioner of Customs or Deputy Commissioner of Customs to the claimant. Emphasis Supplied 6. From the perusal of above quoted Sections and Rules, scheme of Customs Act, 1962 regarding export of goods, assessment thereof and Appeal against the assessment order is discernible. At the time of export of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 16 of the Drawback Rules, 1995. 7. The conceded position as emerging from the record of case is that the Petitioner exported goods which were examined by a team of Customs Officers who after being satisfied qua description of goods and value thereof permitted export of goods. The Petitioner realized export proceeds within stipulated time and accordingly Respondent released drawback. No drawback claim of the Petitioner was pending on the date of introduction of Drawback Rules, 2017. The goods were exported during 2010-2012 and investigation by DRI which culminated into impugned show cause notice dated 9.2.2018 (Annexure P-9) was initiated in December' 2012. Neither limitation period has been prescribed nor is there requirement of show cause notice and its adjudication under Rule 16 of the Drawback Rules, 1995 for recovery of drawback. Prior to 8.4.2011, there was no provision of self assessment which was introduced by Finance Act, 2011 w.e.f. 8.4.2011. No formal assessment order is framed at the time of export of goods; however, permission to export of goods is an assessment of shipping bill which can be challenged by both sides i.e. exporter and department by filing appeal. Dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of each case. The authorities appointed under Customs Act, 1962 cannot decide that what is reasonable period of limitation and it is only courts which can decide said question. Para 24 of judgment of Hon'ble Supreme Court in the case of Bhatinda District Coop. Milk (Supra) directly deals with this question which is reproduced as under: " 24. We are, however, not oblivious of the fact that ordinarily the writ court would not entertain the writ application questioning validity of a notice only, particularly, when the writ petitioner would have an effective remedy under the Act itself. This case, however, poses a different question. The Revisional Authority, being a creature of the statute, while exercising its revisional jurisdiction, would not be able to determine as to what would be the reasonable period of exercising the revisional jurisdiction in terms of Section 21(1) of the Act. The High Court, furthermore in its judgment, has referred to some binding precedents which have been operating in the field. The High Court, therefore, cannot be said to have committed any jurisdictional error in passing the impugned judgment. " This Court in the case of Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period, thus both sides are at idem that every action in the absence of prescribed period should be initiated within reasonable period and what would be reasonable period would depend upon facts and circumstances of each case. Gujrat High Court in the case of Padmini Exports Vs UOI 2012 (284) ELT 325 and Pratibha Syntex Ltd 2013 (287) ELT 290 while dealing with question of reasonable period of limitation applicable to notice issued under Rule 16 of the Drawback Rules, 1995 and applicability of Section 28 has held that Section 28 of Act, 1962 is not applicable, however three years period is reasonable period to issue show cause notice for raising demand of duty drawback. The counsels for the Respondent contended that present case is of mis-declaration of value so judgments of Gujrat High Court are not applicable. In response, Counsel for the Petitioner contended that as per Section 28 of Act, 1962 show cause notice cannot be issued beyond 5 years even in case of fraud, wilful mis-statement or suppressions of facts and in the present case prior to 8.4.2011 (10 shipping bills) assessment of shipping bills was framed by Proper Officer-Respondent and after 8.4.2011 (2 shipping bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never be conclusion of assessment and it would be at the whims and fancies of Respondent to open any assessment at any point of time. Under Customs Act, 1962 every consignment passes through scrutiny of team of Customs officers and there may be mistake on the part of customs officers in one or two cases but cannot be so in every shipping bill. If contention of DRI is accepted, no assessment would conclude till an agency investigates and opines in one or another manner. Respondents have not cited any provision which either declares that no export is complete till NOC is issued by DRI or DRI has unlimited and unguided powers over and above the Customs Officers as well Customs Act, 1962. It would be against the purport and intent of Limitation Act. Period of 5 years for all purposes is reasonable period so we hold that any notice issued under Rule 16 of Drawback Rules, 1995 beyond 5 years from the date of export is bad in the eyes of law and barred by limitation. Accordingly, we answer this question in favour of Petitioner. 11. Question No. (iii) Whether reenacted Drawback Rules, 2017 save Show Cause Notice dated 9.2.2108 (Annexure P-9) issued under Rule 16 of repealed Drawback Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule, regulation, notification or order so amended, repealed, superseded or rescinded; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceedings or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, regulation, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded. Rule 20 of Drawback Rules, 2017: 20. Repeal and saving (1) From the commencement of these rules, the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 shall cease to operate. (2) Notwithstanding such cesser of operation- (a) every application made by a manufacturer or an exporter for the determination or revision of the amount or rate of drawback in respect of goods exported before the commencement of these rules but not disposed of before such commencement shall be disposed of in accordance with the provisions of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 as if these rules had not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come into play and saved all the rights and liabilities arising out of Drawback Rules, 1995. Contention of counsel for DRI that investigation was pending on the date of repeal of Drawback Rules, 1995 so claim of Petitioner was pending thus Rule 20(2)(b) of Drawback Rules, 2017 saves their action is absolutely mis-conceived because it is conceded position that no drawback claim was pending even at the time of initiation of investigation in 2012 rather DRI initiated investigation qua drawback released prior to December' 2012. It is clear from the bare reading of Rule 20(2)(b) of Drawback Rules, 2017 that it saves any claim which is pending with respect to goods exported prior to 1.10.2017 and in the present case no claim was pending on 1.10.2017. Further contention of the counsel for Customs that Valuation Rules, 2007 are till date existing and demand is based on Valuation Rules seems to be attractive but does not serve their purpose. Drawback Rules, 1995 or even Drawback Rules, 2017 were/are neither subject to nor subservient of Valuation Rules, 2007. Drawback Rules are independent and for the sake of determination of quantum of drawback, value of export goods is relevant, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, who would have had jurisdiction to entertain such application etc. under the new Act. It is, thus, clear that while enacting Section 61 of the VAT Act, a different intention has been expressed by the Legislature. Thus, the effect of the aforesaid repealing clause clearly excludes operation of section 4 of the General Clauses Act. Therefore, that section cannot come to the rescue of the state for defending the action taken by respondent No. 2. " " 11. The legislature, in its wisdom having noticed the limitation and constraints under Section 61of the Act of 2003, made necessary amendments to the same by Act No. 3 of 2010 on 02.04.2010. Any interpretation saving the revisional power under Section 40 of the Act of 1973, without any proceedings pending on the relevant date, by resort to Section 4 of the Punjab General Clauses Act, 1858 would render the amendment redundant, and an exercise in futility, something which the legislature never intended to do. Such an incongruous interpretation leading to absurdity has to be avoided. " Applying the afore quoted judgments, we find that by inserting Rule 20(2) government has shown its different intention and Rule 20(2) of Drawback R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... percentage of CIF/FOB Value is raised under Section 28 of the Act, 1962 which is a complete code in itself whereas Rule 16 of Drawback Rules, 1995 does not provide any such mechanism so contention of Respondent that Valuation Rules, 2007 provide a complete mechanism for Rule 16 of Duty Drawback Rules, 1995 is fallacious. Counsels for the Respondents heavily relied upon Section 75(2) (ab) of Act, 1962. Rather, we find that Section 75(2) (ab) of Act, 1962 supports case of Petitioner because it provides that Central Govt. may specify procedure for recovery whereas no procedure for recovery except where export proceeds are not realized, has been prescribed under Drawback Rules, 1995. From the reading of Section 28 of Act, 1962 we find that it provides complete mechanism in case duty or interest is not levied or short levied or erroneously refunded. The demand of duty may be on account of mis-declaration of value or description or quantity or classification but in every case notice is issued under Section 28 of Act, 1962 and procedure prescribed therein is followed. Admittedly, the impugned notice has been issued under Rule 16 of the Drawback Rules, 1995 and not Section 28 of Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India so value can be re-determined after taking goods out of India. Phrase 'export' as well 'export goods' are defined under Section 2(18) and 2(19) of the Customs Act, 1962 respectively and under Drawback Rules, 1995 which are framed under Customs Act, 1962 phrase 'export' has been defined. The definition of 'export' is same under the Act as well Rules except under Drawback Rules "supply to Special Economic Zone" and "supply of store for use on board a vessel or aircraft" is also taken care of, however qua export of goods out of country, definition is same. Rule 1(3) of Valuation Rules, 2007 categorically holds that these rules are applicable to 'export goods'. Further, Rule 6 & 8 of Valuation Rules, 2007 use phrase 'export goods'. Drawback Rules, 1995 use phrase 'export' and not 'export goods'. Thus, we are bound to give actual effect to both the phrases. Counsels for the Respondents are relying upon Valuation Rules, 2007 where word used is 'export goods' so they cannot borrow definition of 'export' to suggest that Rule 6 and 8 are applicable not only to 'export goods' but also goods which had already been assessed by Customs and exported out of India. Mec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of this Act or the rules made or notifications issued thereunder. Explanation 2.- The provisions of this sub-section shall apply to any utilisation of instrument so obtained by the person referred to in this sub-section on or after the date on which the Finance Bill, 2012 receives the assent of the President, whether or not such instrument is issued to him prior to the date of the assent. (2) Where the duty becomes recoverable in accordance with the provisions of sub-section (1), the person from whom such duty is to be recovered, shall, in addition to such duty, be liable to pay interest at the rate fixed by the Central Government under section 28AA and the amount of such interest shall be calculated for the period beginning from the date of utilisation of the instrument till the date of recovery of such duty. (3) For the purposes of recovery under sub-section (2), the proper officer shall serve notice on the person to whom the instrument was issued requiring him to show cause, within a period of thirty days from the date of receipt of the notice, as to why the amount specified in the notice (excluding the interest) should not be recovered from him, and afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As contended by counsels for Respondents, Rule 6 & 8 of Valuation Rules, 2007 prescribe for rejection of declared value and manner of determination of value at the end of Proper Officer. Prior to 8.4.2011, there was no self assessment and it was made by proper officer and even after 8.4.2011, the proper officer continues to examine goods and either accepts declared value or revises it. In the case in hand, prior to 8.4.2011, assessment was made by Respondent/Customs authorities and w.e.f. 8.4.2011 the value declared by Petitioner was scrutinized and either accepted as such or reduced for the purpose of drawback. The Valuation Rules, 2007 prescribe manner to determine value in case declared value is rejected, however, power to assess or re-assess is embodied in Section 17 read with 51 of Act, 1962. In the absence of specific power under Customs Act, 1962 like power vested under Section 147 of the Income Tax Act or Section 29 of Punjab VAT Act, Customs Officers or DRI officers exercising power of Customs Officer have no authority in law to reject and redetermine value which they assessed at the time of export of goods. The Valuation Rules, 2007 are not substitute of redeterminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed manner. 26. We have already seen that Rule 2(A) framed pursuant to this power has followed the second Gannon Dunkerley case in segregating the 'service' component of a works contract from the 'goods' component. It begins by working downwards from the gross amount charged for the entire works contract and minusing from it the value of the property in goods transferred in the execution of such works contract. This is done by adopting the value that is adopted for the purpose of payment of VAT. The rule goes on to say that the service component of the works contract is to include the eight elements laid down in the second Gannon Dunkerley case including apportionment of the cost of establishment, other expenses and profit earned by the service provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are not looked into for any reason) by determining in different works contracts how much shall be the percentage of the total amount charged for the works contract, attributable to the service element in such contracts. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions for proceeding against a dead person's legal heirs, such as are contained in the Income Tax Act. Obviously, therefore, duty and other sums do not become "payable" without such machinery provisions. Further, Section 11 deals with modes of recovery of tax payable and does not deal with the subject matter at hand - namely machinery provisions for assessment in the hands of the estate of a dead person and, therefore, does not have much bearing on the matter in issue in the present case. The argument, therefore, as to the insertion of the proviso to Section 11 by an Amendment Act of 2004 so as to provide that if a person from whom some recoveries are due transfers his business to another person, then the excisable goods in the possession of the transferee can also be attached and sold again leads us nowhere. In fact learned counsel for the appellants also relied on this proviso to argue that the Legislature's need to add the proviso shows that nothing can be read into the Central Excises and Salt Act by implication. As has been stated above, Section 11 deals with an entirely different situation and the addition of the proviso therein is not of much significance as far as the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of this Court. This Court in C.A. Abraham v. Income-tax Officer, Kottayam, speaking through Shah, J., held that S. 44 of the Income-tax Act set up a machinery for assessing the tax liability of firms which have discontinued their business. This was followed by this Court again in Commissioner of Income-tax, Madras v. S.V. AngidiChettiar. These two decisions are of no help to the Revenue in the present case. Indeed, in a sense they are against it. The Income-tax Act contains an express provision for assessing a dissolved firm. Indeed, but for that provision no assessment could be made under that Act on dissolved firms. For the foregoing reasons we hold that the High Court was right in holding that the assessment order on the dissolved firm could not be supported under the provisions of the Act. The High Court has given a correct answer to the question propounded for its decision." (at page 464) 21. This judgment is a complete answer to the contention of learned counsel for the revenue inasmuch as on a parity of reasoning, sales tax is not a personal tax but a tax on the sale of goods. Nevertheless, this Court held that in the absence of any machinery provisions to assess a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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