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TMI Blog2022 (11) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted that the appellants were importing the goods without knowing the true nature of the goods. Appellants submission that they have opted for first check, also cannot be said to be valid defence for the reason that first check is a facility to determine the exact nature of the goods, and not a facility to mis-declare. The invoice of the Chinese Supplier is not having any details to infuse any confidence. Hence in our view the appellant have deliberately misdeclared the goods. The goods were sought to be cleared on the value as per the invoice. The Bill of Entry was filed declaring the value as per invoice. To the query raised by the bench, the counsel for the appellant affirmed that the value declared on the invoice was inclusive of freight and other charges - the value declared do not have any ingredients of the transaction value and should have been outright rejected, which have been done by the authorities below. The invoice has been issued without referring to any purchase order stipulating the terms of the supply including the terms of payment. Appellant have no answer to any of these questions which are so essential to determine the validity of the transaction an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and order the goods to be classified under CTH 7104 9090. (ii) I reject the value of the impugned goods imported vide B/E no. 5520389 dated 01.11.2019 declared at Rs. 60,049 under Rule 12 of Customs Valuation Rules 2007 and re-determine the same at Rs. 11,14,752/- under Rule 5 and Rule 9 of Customs Valuation Rules, 2007 as discussed in para 17 and 18 above. (iii) I order for confiscation of goods under Bill of Entry No. 5520389 dt. 01.11.2019 having declared value of Rs. 60,049/- and re-determined value of Rs. 11,14,752/- under Section 111 (m) of the Customs Act, 1962. However, I give an option to the importer to redeem the goods on payment of redemption fine of Rs. 6,00,000/- (Rs. Six Lakhs) in lieu of confiscation under Section 125 of the Customs Act, 1962 taking into consideration the outright misdeclaration in the case. (iv) I impose penalty of Rs. 6,100 (Six thousands and one hundred) on M/s. Swastik Creation under section 112 (a) (ii) of the Customs Act, 1962 (v) I impose a penalty of Rs. 6,100 (Six thousands and one hundred) on Shri Manish Shah, proprietor of M/s. Swastik Creation u/s 112 (a) (ii) of Customs Act, 1962. (vi) i impose a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.00 66.96 10 Glass Stone Pear Oval(Size5*7,6*8 mm) 16.35 8.00 130.80 Total 103.55 830.56 2.2 During the course of examination of the consignment, RSS was forwarded to Gemological Institute of India (GII) for identification. After receiving the test report from GII, the panel member had given his report as under: I have seen the report of GII laboratory dtd. 11.11.2019. Declaration of the product as Glass Stones by importer is wrong for all the lots, based on the lab report. Lot No. 1 to 8 and 10 are cut polished synthetic Cubic Zirconia. Declared price at 8$/Ct is very low. For Customs duty purpose, it should be taken as 40 USD/Ct. Lot no, lot No. 9 is identified as Synthetic rubiesCut and Polished (round), Weighing 8.37kg. This lot for Customs duty purpose be taken as 125 USD/KG. 2.3 The goods under lot 1 to 8 and lot 10 of invoice are found to be Cubic Zirconia (cut and polished), classifiable under CTH 71049090 The goods under lot no. 9 of the invoice are fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on given by dept. as Zirconia and synthetic ruby. The ld. Lower authorities erred in holding misdeclaration of goods. The SYNTHETIC CUBIC ZIRCONIA is held similar to CUBIC ZIRCONIA and revalued as per 4 Bills of Entry. The 'CUBIC ZIRCONIA' can be synthetic as well as Natural. Also, the definition of similar goods provided under rule 2(f) of CVR, 2007 is completely overlooked for revaluing the goods under rule 5 of CVR, 2007. The adjudicating authority has simply mentioned the numbers or + bills of entry in the subject order. The Appellant declared the description correctly and the classification in 71031029 with similar rate of duty in 'SYNTHETIC RUBY' and even higher rate of duty in case of 'SYNTHETIC CUBIC ZIRCONIA'. Therefore, no mens rea to evade duty, hence no confiscation and penalty. No extra sale consideration was paid by the appellant. The adjudicating authority and appellate authority ignored these facts. Therefore, keeping in view of the legal position and the spirit of the law, the transaction values declared ought to be accepted without any loading and the baseless loading may please be set aside. Public Notice 30/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not warranted not called for under the subject conditions of first check assessment. The adjudicating authority and first appellate authority did not consider the legal and facts of the case properly. The importer is not at all involved in any forgery. Further penalty under 114AA is applicable only in case of exports so no penalty under 114AA can be imposed, as has been held in the following cases:- Interglobe Aviation Ltd. [2022 (379) ELT 235 (T- Bang)] Sri Krishna Sounds and Lightings [2019 (370) ELT 594 (T)] 3.3 Arguing for the revenue learned authorized representative while re-iterating the findings recorded in the impugned order submits: When the panel expert of GII examined the RSS it was confirmed that the goods are wrongly declared as Glass stones.. they are actually cut and polished Cubic Zirconia and Synthetic Ruby both classifiable under CTH 71049090. The Appellant in a letter dated 04.12.2019accepted and admitted the valuation done by the department and the applicable duty on the subject goods amounted to Rs 68,422/- as against the declared duty of Rs 6,772/-. Thus the differential duty was Rs 61,650/ The value of the goods de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iguous by the plain reading of it. Reliance is place on following decisions of Hon ble Apex court on the Interpretation of Statutes. Doypack Systems 9pvt) Ltd. [1988 (36) ELT 204 (SC)] Dilip Kumar and Company [2018 (361) ELT 577 (SC)] In view of the decision in case S.D. Overseas Tribunal upholding section 114AA The two case laws cited by the Ld counsel for the Appellants cannot advance the case of appellant. The two Apex court judgments on Interpretation of statutes, clearly held that the language of the legislation is more important than the discussions of any committee or noting of files or discussions but what is enacted by the parliament and mentioned in the provision and when there is no ambiguity then the plain reading and meaning shall be taken. Appeal needs to be dismissed. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 In the impugned order Commissioner (Appeal) has observed as follows: 12.1 I have carefully gone through the Order-in-Original as well as the grounds of appeal of the appellant. First I take up the issue of jurisdiction raised by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly placed by the appellant on the Canon India case law in the present matter. The Additional Commissioner having jurisdiction over PCCCC cannot be deprived of the jurisdiction and is well within his rights and duties to adjudicate the cases pertaining to PCCCC. 12.4 Secondly I observe that the appellant in his grounds of appeal has time and again raked up the issue of first check assessment and examination. By virtue of first check he claims that the misdeclaration of description and value should be absolved of. In this regard I would like to state that in general cases, where there is not much difference between the declaration of goods and the actual god argument is sustainable as its factually correct that APSC has first check mandatory for all consignments but it is also to be noted that in spite of first check being in practice, there is no dearth of such cases where importer or exporter has tried to misdeclare by counting on their luck or the reasons best known to them. I also feel that correct declaration should be the priority of the importer/ exporter in the regime of self-assessment and faceless assessment. In the self assessment regime, the onus is upon the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared in the bill of entry. I find that Adjudicating authority has given detailed reasoning for rejection of such declared value and I find myself in agreement of such reasoning. Therefore, I hold that the declared assessable value (Transaction Value) of the imported goods is liable for rejection under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, Since, the declared value is liable for rejection and is accordingly rejected and therefore the Adjudicating Authority has rightly proceeded to re-determine the value as per Customs Valuation Rules, 2007. I observe that on the basis of test report, the panel had suggested the value of synthetic cubic zirconia at USD 40 per carat and the value of synthetic ruby at USD 125 per carat. Contemporaneous import data of Cubic Zirconia is available in NIDB database as discussed in table Il of the Orderin-Original. I find that in absence of data of identical import goods, the value of the goods under Lots No. 1 to 8 and lot no. 10 i.e. Cubic Zirconia cannot be re-determined under Rules 4 of CVR, 2007. However, data of similar goods for goods under lots no. 1 to 8 and lot no. 10 is available on NIDB datab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / are liable for confiscation under Section 111(m) of the Customs Act, 1962. 12.11 I also hold that in view of their above acts of omissions and commission which have rendered the impugned goods liable for confiscation under section111(m)of the Customs Act, 1962, the importer is liable for penalty under Section 112 (a) of the Customs Act, 1962 and as there is clearly evident gross mis declaration on the part of importer and specifically Shri Manish Shah who is the proprietor of M/s. Swastik creation and gross mis-declaration of this extent cannot be without active involvement of concerned responsible person who in this case is Shri Manish Shah and therefore Shri Manish Shah is liable for penal action under section 112 (a) and/or 112 (b) and Section 114AA of the Customs Act, 1962 for violations and misdeclarations as referred above. 13. Now I will deal with the quantum of redemption fine and penalty. I observe that the re-determined assessable value as per Adjudicating Authority is Rs. 11,14,752. Thus the applicable duty on the subject goods comes to Rs. 68,422/ as against the self assessed duty of Rs. 6,772/. Thus the differential duty was calculated to Rs. 61,650/ under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Since, the declared value is liable for rejection and is accordingly rejected and therefore I proceed to re-determine the value as per Customs Valuation Rules, 2007. I find that on the basis of test report the panel had suggested the value of synthetic cubic zirconia at USD 40 per carat and the value of synthetic ruby at USD 125 per carat. I find that contemporaneous import data of Cubic Zirconia is available in NIDB database as discussed in table II above. I find that in absence of data of identical import goods, the value of the goods under Lots No. 1 to 8 and lot no. 10 i.e. Cubic Zirconia cannot be re-determined under Rules 4 of CVR, 2007. However, data of similar goods for goods under lots no. 1 to 8 and lot no. 10 is available on NIDB database. I find that contemporaneous import data of synthetic cubic zirconia shows that the similar goods are being imported at a minimum price of Rs. 10,917 (USD 151) per kilogram as shown in the table 11 above at the same quantity level. Therefore, I hold that the value of goods under Lots No. 1 to 8 and lot no. 10 i.e. Synthetic Cubic Zirconia is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 04.12.2019 of the Appellant whereby the appellant have agreed to revised classification and value as determined by the Customs for the impugned goods which is based on the NIDB for the goods mentioned in lot 1 to 8 and lot 10, and on the basis of the report given by the panel expert in respect of the goods mentioned at lot No 9. Tribunal has in the case of Hanuman Prasad and Sons [2021-TIOL-36-CESTAT-DEL] in similar circumstances has held as follows: 30. The very fact that the importers had agreed for enhancement of the declared value in the letters submitted by them to the assessing authority, itself implies that the importers had not accepted the value declared by them in the Bills of Entry. The value declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the importers had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under rule 3(1) for the reason that the declared value h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is consented, the violation of principles of natural justice cannot be alleged. In the present case, while value can be challenged but such a challenge would be of no avail as with the goods not being available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per his consent suffered from fatal infirmity and such onus has not been discharged. Further, valuation of such goods requires their physical inspection and so reassessment of value in the absence of goods will not be possible. The case of Eicher Tractors v. Union of India (supra) cited by the appellant is not relevant here as in that case there was no evidence that the assessee had consented to enhancement of value. [emphasis supplied] 32. In Vikas Spinners, the Tribunal dealing with a similar situation, observed as under : 7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrary to the claim by the learned Counsel. [emphasis supplied] 34. In BNK Intrade (P) Ltd. vs Commissioner of Customs, Chennai [2002 (140) ELT 158 (Tri.-Del)] , the Tribunal observed as follows : 2 .. It is also to be noted that the importer had also agreed for enhancement of the price based on contemporaneous prices available with the Department. We, therefore, find no merit in the contention raised in the appeal challenging the valuation and seeking the refund of the differential duty paid by the appellants on enhancement. 35. The following position emerges from the aforesaid decisions of the Tribunal: (i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation; (ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and (iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submission that they have opted for first check, also cannot be said to be valid defence for the reason that first check is a facility to determine the exact nature of the goods, and not a facility to mis-declare. The invoice of the Chinese Supplier is not having any details to infuse any confidence. Hence in our view the appellant have deliberately misdeclared the goods. 4.6 The goods were sought to be cleared on the value as per the invoice. The Bill of Entry was filed declaring the value as per invoice. To the query raised by the bench, the counsel for the appellant affirmed that the value declared on the invoice was inclusive of freight and other charges. That being so, the Chinese supplier has supplied the goods by declaring the value of goods which would not even be commensurate the air freight charges for transportation of this consignment from China to Mumbai. The value declared do not have any ingredients of the transaction value and should have been outright rejected, which have been done by the authorities below. The invoice has been issued without referring to any purchase order stipulating the terms of the supply including the terms of payment. Appellant have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 114AA. It is seen stated that as per the Taxation Laws (Amendment) Bill, 2005, introduced in Lok Sabha on 12-5-2005, the Standing Committee has examined the necessity for introducing a new Section 114AA. The said Section was proposed to be introduced consequent to the detection of several cases of fraudulent exports where the exports were shown only on paper and no goods crossed the Indian border. The said Section envisages enhanced penalty of five times of the value of the goods. The Commissioner (Appeals) has analyzed the object and the purpose of this Section and has held that in view of the rationale behind the introduction of Section 114AA of the Customs Act and the fact that penalty has already been imposed under Section 112(a), the appellate authority has found that the penalty under Section 114AA is excessive and requires to be set aside. Thus, the penalty under Section 114AA is not set aside merely for the reason that penalty under Section 112(a) is imposed. After considering the ingredients of Section 114AA and the rationale behind the introduction of Section 114AA, the Commissioner (Appeals) has set aside the penalty under Section 114AA. 7. On appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the case in favour of the appellant. No such discount applied in this case. In the case of Bharat Marketing, the allegation of under valuation was only based on NIDB data. In the case of Polyglass Acrylic [(2016) 13 SCC 740], the Tribunal recorded that the Department has not relied upon any contemporaneous import of similar or identical goods to justify the enhancement. None of these cases will come to the aid of the appellant because in the present case there were contemporaneous data as well as manufacturer s price list and the appellant was questioned about the difference and its submission is that it had imported inferior quality goods with short shelf life and hence the goods were sold cheap by the overseas supplier. Neither the bill of entry nor its supporting documents supported this assertion. Further, such goods could not have been imported with a short shelf life and of inferior quality without obtaining a no objection certificate in the FSSAI which has not been done in this case. The cases of Agarwal Industries [2005 SCC OnLine CESTAT 719], Oswal Fats Oils [2007 SCC OnLine CESTAT 2905] and J.D. Orgochem Ltd. [(2008) 16 SCC 576] were relied upon by the appellant to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to every textile undertaking shall stand transferred to and shall vest in the Central Government . Section 4 says that Section 3 shall be deemed to include all assets, leaseholds, powers, authorities, privileges and all properties, movable and immovable... pertaining to the textile undertakings and all other rights and interests in or arising out of such property . 38. Francis Bennion in Statutory Interpretation 1984 Edition page 526 para 238 states that Hansard reports, and other reports of parliamentary proceedings on the Bill which became the Act in question, are of obvious relevance to its meaning. They are often of doubtful reliability however, (emphasis supplied). The documents in question which are sought for do not relate to the enacting history or any past enactment or the present enactment. The notings made in various Departments at various levels by the officers namely, the Under Secretary, Deputy Secretary, Joint Secretary, Secretary etc., whatever their view might be, is not the view of the Cabinet. The ultimate decision is taken by the Cabinet. So the notings cannot and are not guides as to what decision the Cabinet took. See for example the Task ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Court reiterated that the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill could certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation was enacted. It has been reiterated that interpretation of a statute being a exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. See in this connection the observations of this Court in Chern Taong Shang Another etc. v. Commander S.D. Baijat Others (J.T. 19881 S.C. 202). The documents now sought for by the petitioner do not fall within this category. It is neither the object and scheme of the enactment nor the language used therein, that is sought for in the instant case. It is certainly relevant to know the mischief that was intended to be remedied. But in the documents in question which the petitioner is seeking no such correlation has been established. These are, therefore, not relevant. We reiterate that no officer of the Department can speak for the Parliament even after the Act has been passed. This Court has to interpret the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true meaning of what they said. - See in this connection the discussion in Cross Statutory Interpretation - 2nd Edition, pages 20-30. 56. The words in the statute must, prima facie, be given its ordinary meaning. Where the grammatical construction is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary. Nothing has been shown to warrant that literal construction should not be given effect to See Chandravarkar S.R. Rao v. Asha Lata (1986 4 S.C.C. 447 at page 476), approving 44 Halsbury s Laws of England, 4th Ed. paragraph 856 at page 552. Nokes v. Doncaster Amalgamated Colliery Limited (1940 Appeal Cases W14 at 1022). It must be emphasised that interpretation must be in consonance with the Directive Principles of State Policy in Article 39(b) and (c) of the Constitution. 57. It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agency to apply the law, are essentially questions to which answers can be sought only by knowing the intention of the legislation. Apart from the general principles of interpretation of statutes, there are certain internal aids and external aids which are tools for interpreting the statutes. 17 . The long title, the preamble, the heading, the marginal note, punctuation, illustrations, definitions or dictionary clause, a proviso to a section, explanation, examples, a schedule to the Act etc., are internal aids to construction. The external aids to construction are Parliamentary debates, history leading to the legislation, other statutes which have a bearing, dictionaries, thesaurus. 18 . It is well accepted that a statute must be construed according to the intention of the Legislature and the Courts should act upon the true intention of the legislation while applying law and while interpreting law. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the Legislature. In this connection, the following observations made by this Court in District Mining Officer v. Tata Iron and Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that if the words used are capable of one construction only then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been enacted by the legislature. Accordingly we do not find any merits in the submissions made by the appellant relying on these decisions. 4.11 Hon ble Supreme Court has in case of Balkrishna Chhaganlal Soni [1983 (13) ELT 1527 (SC)]while considering the cases of white collared criminals have observed as followed: 19 . The penal strategy must be formed by social circumstances, individual factors and the character of the crime. India has been facing an economic crisis and gold smuggling has had a disastrous impact on the State s efforts to stabilize the country s economy. Smugglers, hoarders, adulterators and others of their ilk have been busy in their under-world because the legal hardware has not been able to halt the invisible economic aggressor inside. The ineffectiveness of prosecutions in arresting the wave of white-collar crime must disturb the judges conscience. While we agree that penal treatment should be tailored to the individual, in the extreme category of professional economic offenders, incarceration is peculiarly potent. When all is said and done, the offences for which the appellant has been convicted are typical of respectable racketeers who, tempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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