9911796707
TMI Blog2021 (12) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... eenville 11 at Rs. 5,59,77,957 and Rs. 3,09,92,067 with consequent duty liability of Rs. 53,71,177 and differential duty of Rs. 4,91,352 (over and above Rs. 24,11,055 paid at the time of import) respectively under section 28 of Customs Act, 1962, besides the charging of applicable interest under section 28AB of Customs Act, 1962, and imposition of penalty of Rs. 58,62,529 under section 114A of Customs Act, 1962 are the detriments canvassed for quashing. The directors of the appellant-company, Mr Sachin Kshirsagar and Mr Nitin Kshirsagar, have also impugned the same order for wrongful imposition of penalty of Rs. 15,00,000 and Rs. 10,00,000/- under section 112 of Customs Act, 1962 consequent upon the confiscation of Nancy 3 under section 111(f) of Customs Act, 1962. 2. It is seen from the records that the assessment of Greenville 11 in bill of entry no. 914063/05.10.2009 was taken up for review in the course of investigation into the arrival of Nancy 3 and the declared value of US$ 525,000, based on documents indicating delivery at Singapore, was alleged to be incorrect for not having included the bunkering cost of US$ 74,011, manning charges of Rs. 14,05,280 and insurance premium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he vessel had been repainted and refurbished with addition of equipment and parts which was appraised at 15% of the declared value. 6. The culmination of the proceedings for redetermination of value was based on the mobilization advance paid for the conveying of Nancy 3 and the estimated cost of painting/refurbishing as well as the additional equipment installed during drydocking which were admitted to as not included in the first invoice of sale in the statements of the appellant-director who is also before us with his appeal. Likewise, the payment borne by the appellant-company for the voyage of Greenville 11 from Singapore to Mumbai towards manning cost, bunkering and insurance premium are also stated to have been admitted to in the statement of appellant-director. Several submissions were made by Learned Counsel and Learned Authorized Representative during the hearing. While the judicial pronouncements cited do espouse certain situational responses, none have dealt with facts that present themselves in the contours of the present dispute before us which, as we shall elaborate upon presently, are not of common occurrence. We are, therefore, of the considered opinion that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 of Customs Act, 1962 having been breached for justifying confiscation under section 111(f) of Customs Act, 1962. 9. It is not in dispute that Nancy 3 was declared as conveyance en route from Colombo to Singapore. It has been contended that the possession of Nancy 3 was transferred only after arrival at Mumbai which, commercially, is not an improbability and there is nothing on record to discredit such an explanation. At least, the competent authority did not consider it necessary to establish the claim as untenable even when the steamer agent requested for amendment of the manifest. Instead, the fact of non-declaration as 'goods' upon arrival was taken as conclusive intent to smuggle the vessel by attributing the request for amendment to the imminence of discovery after investigations had commenced. For 'goods' that did not arrive on their own steam, this trail of inference may not have been unwarranted; for 'conveyances' that transform as 'goods', inference does not suffice to discountenance the claim of contractual closure. That lack is irreversible. However, we may subject the inference made by the adjudicating authority to the test of rationality and probability. 10. Unlik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imated duty liability on the payment of US$ 1,020,000 effected to the seller against two invoices which was appended to the bill of entry. Hence, it would appear that full value of both invoices were declared in the entry, made under section 46 of Customs Act, 1962 and, thus, precluding any scope for suggesting, let alone alleging, that importer had misrepresented or suppressed any material fact that offers the ingredient for invoking section 114A of Customs Act, 1962. Sometimes, as soliloquized by the Bard of Avon, through the dying tongue of John of Gaunt in Richard II, 'with eager feeding food doth choke the feeder' and, in their anxiety to close any loophole that the importer could be presumed to have up the sleeve, failed to afford the appellant-company an opportunity to misrepresent the value or any relevant fact. It is only by the filing of bill of entry, as prescribed in section 46 of Customs Act, 1962, that an importer and declaration comes into existence and any thoughts, plans or inclinations in the mind of the importer before such filing is beyond the purview of section 28, and of section 114A, of Customs Act, 1962. In the absence, by intent or by fortuitousnes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, was borne by, or on behalf of, the appellant to justify inclusion in assessable value. In the statement relied upon in the impugned order, and in which it has been the admitted that US$ 1,020,000 was paid, there is no reference to the cost of drydocking having been charged from them. Furthermore, a casually determined loading as proportion of declared value is not sustainable unless permitted by Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It is not open to the customs authorities to resort to the Rules for redetermination of the value afresh without discarding the declared value. Any differential duty based on additions to declared value is permissible only within the framework of rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. In the absence of any finding on that aspect, the 'mix and match' of topping the transaction value with computed value cannot be sustained within the scheme of rules of valuation. It may not be out of place to draw the attention of customs officers to the empowerment under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, to be invoked to discard the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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