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TMI Blog2025 (1) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the reassessment or the shipping bills produced at Annexure I, done by the respondents and declare the same to be null and void; (aaaa) This Honourable 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 document / action of the Respondents-produced at "Annexure L" and declare the same to be null and void; (b) This Honourable Court be pleased to issue a writ of mandamus or in the nature of mandamus or any other appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 cause notice any day after next date of hearing. Put up on 20/06/2019. Notice to respondent no. 7 returnable on 20/06/2019." 6. It appears that during the pendency of the petition, respondent authorities have passed the reassessment order of the shipping bills filed by the petitioner and therefore, the petitioner again amended the petition, which was granted by this Court vide order dated 01.08.2024. In the interregnum period, the respondent authorities were directed not to proceed with the hearing of the show cause notice and the petitioner was directed to appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 consignment and upon such instructions, the consignment for export was released on 22.06.2018 after conducting final assessment under Section 17 of the Customs Act, 1962 and Let Export Order was issued in favour of the petitioner. The petitioner was required to file fresh shipping bills after the amendment was granted and accordingly, the petitioner filed shipping bills Nos. 5691337 and 5690694 dated 20.06.2018. 7.3 During the course of hearing, learned advocate Mr. Utkarsh Sharma submitted that the vigilance inquiry initiated against the respondent nos. 5 and 6 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 the respondent nos.2 to 6 directly on 11.04.2019. The respondents did not remain present on 15.04.2019 and respondent no. 7 thereafter issued a show cause notice dated 16.04.2019, which is challenged as per the amendment permitted to be carried out by the petitioner contending that such show cause notice is without jurisdiction de hors the valuation rule, ignoring the valuation accepted by the department and ignoring the decision of the Hon'ble Supreme Court in such cases. 8. Learned Senior Advocate Mr. Anshin Desai for the petitioner submitted that the respondent au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articularly 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-in-reply filed on behalf of the respondents to contend that the goods in question were provisionally released and the shipping bills were assessed provisionally for valuation purpose. Reliance was also placed on the screenshot taken from the Indian Customs EDI System (ICES). It was, therefore, submitted that there was no final assessment of the shipping bills as contended by the petitioner, and therefore the impugned show cause notice is issued in accordance with law as there was a vast difference between the valuation of the goods exported by the petitioner. Referri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 that goods have been permitted to be exported on final assessment made by the respondent authorities on 21.06.2018 and thereafter, the Manifest was also filed by the petitioner. The petitioner also furnished the Export Realization Certificate from the concerned bank to the effect that the foreign 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. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 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 goods as per Section 14 of the Customs Act, 1962 has held that assessable value has to be arrived at on basis of price which is actually paid, which is the basic principle enshrined in the provisions of Section 14 of the Customs Act, 1962. The Hon'ble Supreme Court has held as under:- "(7) This argument may seem to be attractive, but only when there is a cursory look at the aforesaid observations of the Tribunal that the Assessing Officer did not examine the evidence available with the Department which was necessitated for such a purpose. However, the observations of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. Thus, Rule 5 allows for the transaction value to be determined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7-A. When value of the imported goods cannot be determined under any of these provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 effect of Rule 3(1) and Rule 4 (1) of the Customs Valuation Rules, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4 (2). As per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it is incumbent upon the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 undervaluation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving undervaluation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts' proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of undervaluati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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