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TMI Blog2019 (10) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... t goods has been used which shows true intention of the legislature. The transaction value of imported and export goods is the thumb rule to determine duty payable, however declared value may be rejected and proper officer may redetermine value applying Valuation Rules, 2007. Rule 1(3) provides that Valuation Rules, 2007 are applicable to export goods and not goods which have already been taken out of India. The declared value may be accepted or reassessed and in case re-assessed value is not accepted by exporter, proper officer has to pass speaking order - Thus, as per scheme of the 1962 Act, department is not remediless and courts are bound to interpret law as such. Courts while interpreting law can neither add nor subtract any word from the plain language irrespective of consequences. It is the legislature who has to rectify, repair or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. On plain reading of Section 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign 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 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. 2.1 The Petitioner realized export proceeds nevertheless Directorate of Revenue Intelligence (DRI) initiated an investigation against the Petitioners alleging that Petitioners are fraudulently availing duty drawback by grossly overvaluing the goods in the export documents. The DRI searched various premises of the Petitioners on 26.4.2012 and concluded that Petitioners have mis-declared value of goods which were exported upto 26.4.2012. On the basis of investigation conducted by DRI, Joint C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have held that inspite of availability of alternative remedy available under 1962 Act, writ petition is maintainable in view of involvement of pure questions of law as well jurisdiction and law enunciated by Hon'ble Supreme Court and followed by this court time and again. On the question of reasonable period of limitation to issue show cause notice raising demand of duty drawback, relying upon judgment of Hon'ble Supreme Court in State of Punjab versus Bhatinda District Co-Op. Milk P. Union Ltd. 2007 (217) ELT 325 and this court in Gupta Smelters Pvt. Ltd. versus Union of India 2019 (365) ELT 77 (P&H), GPI Textiles Limited versus Union of India 2018 (362) ELT 388 (P&H), CCE Vs Hari Concast (P) Ltd. 2009 (242) E.L.T. 12, we have held that period of 5 years from the date of export/assessment is a reasonable period. While taking cue from Sections 28, 28AAA & 75 of 1962 Act and relying upon judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise versus Larsen and Toubro 2015 (39) STR 913 as well of this court(DB) in the case of CWP No.4215 of 2016 titled as Laqshya Media Pvt. Ltd. Vs State of Punjab and Others decided on 23.08.2016, we have held that mechani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law. In view of enunciation of law by Hon'ble Supreme Court, we deem it appropriate to deal with question of power of Respondent to re-assess shipping bill of goods which have already been exported out of country. 9. Contention of Petitioner is that prior to 08.04.2011, assessment was framed by Proper Officer under Section 17 of the Customs Act, 1962 and w.e.f. 08.04.2011 concept 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 1962 Act and Rule 8 & 6 of the Valuation Rules, 2007 prescribe method to determine value of export goods. Neither Section 14 nor Valuation Rules empowers Respondent to reassess value of the already exported goods. The Petitioner at the time of export of goods declared value of goods which was after physical verification assessed. The Petitioner realized export proceeds and accordingly duty drawback was released. 9.1 The goods in question have already been exported so these goods cannot be called as 'exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and to conduct necessary examination. The DRI had made thorough investigation wherein it was found that Petitioner had mis-declared value of export goods and availed drawback in excess of what he was entitled thus DRI has power to reassess value of goods already exported. Both the State Counsels in single voice contented that as per Rule 8 of Valuation Rules, 2007 which are framed in terms of Section 14 of 1962 Act, 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. 10. Before proceeding further, it would be useful to understand scheme of 1962 Act which deals with import & export of goods. Customs Act, 1962 SECTION 46 Entry of goods on importation. (1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronically [on the customs automated system] to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed: (2) ********* SECTION 47. Clearance of goods for ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification issued therefore under this Act and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. (6) Where reassessment has not been done or a speaking order has not been passed on reassessment, the proper officer may audit the assessment of the duty of the imported goods or export goods at his office or at the premises of the importer or exporter as may be expedient, in such manner as may be prescribed. Explanation.- For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be. SECTION 129D. Powers of Committee of Principal Chief Commissioner of Customs or Chief Commissioner of Customs or Principal Commissioner of Customs or Commissioner of Customs to pass certain orders. - (1) x x x x x x x x (2) The Principal Commissioner of Customs or Commissioner of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any officer of Customs subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Principal Commissioner of Customs or Commissioner of Customs in his order. (3) & (4) ****** Emphasis Supplied As per scheme of 1962 Act, at the time of import, bill of entry is filed under Section 46 of 1962 Act and at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been cleared are not "imported goods". Similarly, goods which have already been exported are no more 'export goods'. In the definition part as well in the various Sections of 1962 Act and Rules made thereunder, we find that word 'imported goods' or 'export goods' has been used which shows true intention of the legislature. 12. Value of "export goods" and "imported goods" is determined under Section 14 of the 1962 Act. Government in exercise of power conferred by Section 14 of the 1962 Act has framed Valuation Rules, 2007 which prescribe manner to determine value of "export goods" where value declared by exporter is rejected. Section 14 of 1962 Act and relevant Rules of Valuation Rules, 2007 are extracted as under: SECTION 14. Valuation of goods- (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign Exchange Management Act, 1999 (42 of 1999). Customs Valuation Rules, 2007: Rule 1. Short title, commencement and application. (1) These rules may be called the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. (2) They shall come into force on the 10th day of October' 2007. (3) They shall apply to export goods. Rule 6. Residual method. Subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods. Rule 8. Rejection of declared value. (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any export goods, he may ask the exporter of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such exporter, the proper officer still has reasonable doubt about the truth or accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, Rule 16 and 16 A of Drawback Rules, 1995: Rule 2 (a) "drawback" in relation to any goods manufactured in India and exported, means the rebate of duty or tax, as the case may be, chargeable on any imported materials or excisable materials used or taxable services used as input services in the manufactured of such goods; Rule 2 (c) "export" with its grammatical variations and cognate expressions, means taking out of India to a place outside India or taking out from a place in Domestic Traffic Area (DTA) to a special economic zone and includes loading of provisions or store or equipment for use on board a vessel or aircraft proceeding to a foreign port; Rule 16. Repayment of erroneous or excess payment of drawback and interest. - Where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of Section 142 of the Customs Act, 1962 (52 of 1962). Emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder: "128. Appeals to [Commissioner (Appeals)]. - - - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order: [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India 2009 (240) ELT 490 (Bom.) = 2009-TIOL-317-HC-MUM-CUS though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra). 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verify different particulars including value declared by an exporter. The declared value may be accepted or reassessed and in case re-assessed value is not accepted by exporter, proper officer has to pass speaking order. Thus, as per scheme of the 1962 Act, department is not remediless and courts are bound to interpret law as such. Courts while interpreting law can neither add nor subtract any word from the plain language irrespective of consequences. It is the legislature who has to rectify, repair or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. On plain reading of Section 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of 'export goods' as defined under Section 2(19) of 1962 Act, thus Respondent cannot invoke Rule 6 & 8 of Valuation Rules, 2007. In view of judgment of Hon'ble Supreme Court in the case of ITC Vs CCE (Supra), we find that shipping bill either self assessed or assessed by proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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