9911796707
TMI Blog2025 (1) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange has been received on the export made by the petitioner. Therefore, in the facts of the case, the petitioner is entitled to the claim of duty drawback and in accordance with the duty drawback rules as there is no other deficiency found by the respondent authorities. So far as the issuance of the impugned show cause notice is concerned, the only reliance is placed on Section 14 of the Customs Act, 1962 read with Rule 8 of the Valuation Rules, 2007 to invoke the provisions of Section 113 (i) (ia) of the Customs Act, 1962. On perusal of Section 14 of the Customs Act, 1962, it mandates that the respondent authorities are bound to accept the transaction value and only recourse to the valuation rules can be made pursuant to Clause (iii) of the proviso if the proper officer has reason to doubt the truth or accuracy of such value. It appears that the valuation done by the valuer as per Rule 8 of the Valuation Rules, 2007 was available since July, 2018, however, no action was taken by the respondent authorities till the notice issued by this Court is served by the petitioner to the respondents. In such circumstances, in absence of any further allegations of irregularities in furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent(s) No. 6: Notice Served By DS. ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned Senior Advocate Mr. Anshin Desai for the petitioner and learned advocate Mr. Utkarsh Sharma for respondent nos.2 to 5. 2. Rule returnable forthwith. Learned advocate Mr. Utkarsh Sharma waives service of notice of Rule for respondent nos.2, 3, 4 and 5. 3. Having regard to the controversy involved, which is in a narrow compass, with the consent of learned advocates for the respective parties, this petition is taken up for hearing. 4. By this petition under Article 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs:- "(aa) This Hon'ble Court be pleased to issue a writ of mandamus or certiorari or in the nature of mandamus or certiorari or any other appropriate writ, order or direction quashing and setting aside the show cause notice dated 16th April 2019 issued by the respondents and declared the same to be null and void; (aaa) This Hon'ble Court be pleased to issue writ of mandamus or certiorari or in the nature of mandamus or certiorari or any other appropriate writ, order or direction, quashing and setting aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of para-ddd)." 5. This is a unique case, where the petitioner had a courage to level allegation against the respondent no. 6 demanding bribe of Rs. 75,000/- from the petitioner to clear the export cargo to be loaded on the ship. This Court (Coram: Hon'ble Mr. Justice S.R. Brahmbhatt and Hon'ble Mr. Justice V.B. Mayani, JJ) by order dated 03.04.2019 issued a notice made it returnable on 15.04.2019. Thereafter, it appears that the respondent issued show cause notice on 16.04.2019 to the petitioner. Therefore, the petitioner amended petition, which was allowed by order dated 07.05.2019, by passing the following order:- "Draft amendment is granted. The same shall be carried out accordingly. Learned advocate appearing for respondent no. 1 seeks time and submits that apprehension of any action pursuant to show cause notice is not correct as the show cause notice itself gives thirty days time to respond. We are of the view that as the counsel for respondent no. 1 has submitted that the very jurisdiction of issuance of show cause notice is under challenge, it would be open to the petitioner to seek time which shall be granted by the authority for filing response to the show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to shift the same on 15.06.2018. It is the case of the petitioner that respondent no. 6 thereafter did not examine the cargo on 16.06.2018 and therefore, the petitioner could not export the consignment on the vessel, which left the port on 17.06.2018. The petitioner therefore complained to respondent no.4-Deputy Commissioner of Police (Special Investigation Branch) Mundra for examination of the cargo and ultimately, on 18.06.2018, the cargo was examined by respondent nos. 5 and 6. 7.2 It is also the case of the petitioner that before the seal of the container could be opened, it was brought to the notice of the respondents that the container is damaged and the doors of the containers were tried to be opened, which was recorded in the panchnama. The petitioner has also alleged that due to such damage, 9 bags were found missing from the container. It appears that the examination continued till 19.06.2018 and ultimately, after the representation made by the petitioner dated 20.06.2018 before the CBEC and Ministry of Finance with regard to making allegations against respondent nos. 5 and 6 in writing, the respondent authorities initiated action and instructed for release the consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods are assessed finally and no dispute was raised at any point of time with respect to the valuation etc. of the consignment. It is the case of the petitioner that without considering the request and representation made by the petitioner, the duty drawback was not released. 7.7 It appears that the petitioner realized the payment towards the consignment exported. Therefore, the petitioner once again approached the respondent authorities vide letter dated 27.03.2019 along with the Export Relalization Certificate issued by the concerned bank of the petitioner, which completes the transaction value of the shipping bills in question with a request to release the duty drawback even in case of dispute of valuation, if any, as no such dispute was raised by the respondent authorities till the said date. 7.8 The petitioner thereafter preferred this petition for the release of the claim of duty drawback and other export incentives and this Court issued a notice on 03.04.2019 making it returnable on 15.04.2019 and permitted the petitioner to serve the respondents directly. It is the case of the petitioner that the petitioner served the notice issued by this Court in this petition upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner for duty drawback. It was submitted that the impugned show cause notice dated 16.04.2019 is without jurisdiction and is a counterblast to the notice issued by this Court in this petition. It was submitted that on perusal of the impugned show cause notice, it appears that, it pertains to the difference in valuation for confiscation of the exported goods as per Section 113 (i) (ia) read with Section 14 of the Customs Act, 1962. It was submitted that on perusal of the provisions of Section 14 of the Customs Act, 1962, same could not have been resorted to, more particularly when respondent authorities have carried out the valuation way back in June, 2018 they could not have waited till April, 2018 for issuance of the impugned show cause notice. It was, therefore, submitted that the show cause notice is nothing, but an attempt to harass the petitioner and to see that the petitioner is again constrained to approach the respondent authorities for adjudication of the show cause notice in order to withhold the duty drawback. 11. On the other hand, learned advocate Mr. Utkarsh Sharma appearing for respondent nos.2 to 5 referred to and relied upon the averments made in the affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the facts of the case, it appears that the respondent authorities have adopted an approach coloured with vengeance against the petitioner as the petitioner had made allegations against respondent nos. 5 and 6 for demanding Rs. 75,000/- for clearance of the goods for export. 15. On perusal of the sequence of events, which has compelled the petitioner to approach to this Court by filing this petition in the month of March, 2019 and subsequent action taken by the respondent authorities by issuing the show cause notice dated 16.04.2019 on service of the notice dated 03.04.2019 issued by this Court, it is apparent that the respondent authorities have adopted an arbitrary and capricious approach in dealing with the issue of claim of the duty drawback and have been annoyed by the petitioner's action of allegation of demand Rs. 75,000/- for clearance of the goods consignment by the respondent no. 6 and the action of the petitioner to approach to this Court for claim of the duty drawback by issuing the impugned show cause notice after a gap of 9 months on service of the notice issued by this Court. 16. Considering the merits of the case of the petitioner, it is not in dispute that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the facts of the case, there is nothing on record to show that the goods, which were exported by the petitioner, the petitioner has failed to provide information, which do not correspond in material particular with the exported goods and the information has nothing to do with the valuation of the goods for the purpose of claim of the drawback. The petitioner has filed the shipping bills on the EDI system on 20.06.2018, which were assessed by the respondent authorities, manifest was also filed by the petitioner and Export Realization Certificate is also furnished. In such circumstances, the contention raised by the respondent authorities that the goods were provisionally assessed, which were tried to be justified by the screenshot appearing on the EDI system is nothing but an eye wash so as to see that the petitioner is again relegated back to the respondent authorities for adjudication of the show cause notice, which is apparently issued without jurisdiction. 18. The Hon'ble Supreme Court in the case of Commissioner of Central Excise and Service Tax, Noida vs. M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd., reported in AIR 2019 SC 203, while considering valuation of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his behalf. xxx xxx xxx 9. These exceptions are in expansion and explicatory of the special circumstances in Section 14 (1) quoted earlier. It follows that unless the price actually paid for the particular transaction falls within the exceptions, the Customs Authorities are bound to assess the duty on the transaction value. xxx xxx xxx 12. Rule 4 (1) speaks of the transaction value. Utilisation of the definite article indicates that what should be accepted as the value for the purpose of assessment to customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4 (2). "Payable" in the context of the language of Rule 4 (1) must, therefore, be read as referring to "the particular transaction" and pay ability in respect of the transaction envisages a situation where payment of price may be deferred. xxx xxx xxx 13. That Rule 4 is limited to the transaction in question is also supported by the provisions of the other rules each of which provide for alternate modes of valuation and allow evidence of value of goods other than those under assessment to be the basis of the assessable value. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is nothing to show that the same would not have been offered to anyone else wishing to buy the old stock, there is no reason why the declared value in question was not accepted under Rule 4 (1)." (9) To the same effect, are other judgments, reiterating the aforesaid principle, such as, Commissioner of Customs, Calcutta vs. South India Television (P) Ltd. (2007) 6 SCC 373, Chaudhary Ship Breakers vs. Commissioner of Customs, Ahmedabad, (2010) 10 SCC 576 and Commissioner of Customs, Vishakhapatnam vs. Aggarwal Industries Ltd., (2012) 1 SCC 186. (10) The law, thus, is clear. As per Sections 14 (1) and 14(1-A), the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision. Section 14 (1) is a deeming provision as it talks of 'deemed value' of such goods. Therefore, normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs to be followed by the Assessing Officer. This principle of arriving at transaction value to be the assessable value applies. That is also the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declared in the bill of entry is the value referred to above and not merely the invoice price. xxx xxx xxx 12. However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1-A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Undervaluation has to be proved. If the charge of undervaluation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege undervaluation, it must make detailed inquiries, collect material and also adequate evidence. When ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
