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Showing 141 to 160 of 40536 Records

2025 (6) TMI 775

Enhancement of value of imported goods, by recourse to rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - recovery of differential duty and penalty, in lieu of confiscation on goods that had been provisionally released earlier besides imposition of penalty u/s 112 of Customs Act, 1962 - HELD THAT:- On a perusal of the order of the lower authorities, it is found that the revision is not in compliance with rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and, instead, proceeded directly to rule 5 therein which was to be preceded by rejection of the declared value, with its own restrictive framework, and test of applicability of rule 4 therein first. The reliance placed on the data base available with attached office of the Central Board of Excise and Customs does not fulfill the requirement of rejection under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 nor is in conformity with rule 5 of the said Rules.

The impugned order, being without basis in law, is set aside to allow the appeal.
2025 (6) TMI 696

Classification of imported Wireless Access Points ( WAPs ) - to be classified under Customs Tariff Item ( CTI ) 8517 6990 as “Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network ( such as a local or wide area network )” or not - benefit of ‘nil’ rate of duty as provided for under Sl. No. 13 of Notification No. 24/2005-Cus. dated 01.03.2005 - HELD THAT:- After going through the decision of Hon’ble Delhi High Court in COMMISSIONER OF CUSTOMS AIR CHENNAI-VII COMMISSIONERATE VERSUS M/S. INGRAM MICRO INDIA PVT. LTD. [2025 (1) TMI 797 - DELHI HIGH COURT], it is found that the Appellant is right in submitting that the issue is covered by the judgement of the Hon’ble Delhi High Court in Ingram Micro’s case, where it was held that 'the phrase “MIMO and LTE Products” in Serial No. 13 (iv) of the amended Notification No. 24/2005 applies solely to products combining MIMO technology and LTE standards. The exclusion clause cannot be stretched to encompass products featuring either one of the two technologies. Accordingly, the WAPs imported by the respondent, which employ MIMO technology but not the LTE standards, are entitled to the exemption from Basic Customs Duty.'

Considering that the Revenue’s contentions in response to the points which have already been decided by the Hon’ble Delhi High Court, it is not open to consider these submissions on their merits. The Revenue’s reliance on the order of the Co-Ordinate Bench in Ingram Micro is also misplaced, in as much as it is not open to us to rely on a decision of a Bench of this Tribunal in preference to a judgement of a Hon’ble High Court, particularly when, the judgement of the Hon’ble High Court directly covers the question.

Conclusion - The Commissioner was not justified in denying the benefit of Notification No. 24/2005.

The impugned order is set aside - appeal allowed.
2025 (6) TMI 695

Misuse of Target Plus Scheme (TPS) by utilizing the license obtained under TPS against export of Ready Made garments for import of plastic granules which allegedly did not have any broad nexus with primary product exported - imported goods were for the actual use of the importer or for supporting manufacturers.

HELD THAT:- A similar issue has been considered by this Bench in the case of CC (Airport & Aircargo), Chennai Vs Sunstar Overseas Ltd. [2025 (5) TMI 670 - CESTAT CHENNAI] and after following the very same decisions, it is held that the assessee/importers therein has been correctly given the benefit of TPS and the consequent dropping of the proposed proceedings by issuing SCN has been held to be in order.

The fact that the very DGFT to whom reference was made by the Revenue to cancel/modify the license has itself accepted that the benefit has been correctly granted to the assessee– importer which indicates that the Issuing Authority was completely satisfied with the fact of the fulfilment of the conditions under TPS vis-a-vis FTP and hence, the Revenue cannot have any grievance. Moreover, we also find from the impugned order that at para 21, the Commissioner has appreciated the pleadings of the assessee about the very Department granting exemptions vide Notification 12/2012- Cus dated 17.03.2012 to the printed polybags for use in packing of readymade garments by exporters registered with Apparel Export Promotion Council (APEC) and that exemption so granted would clearly endorse that the polybags were products used in the manufacture and packing of readymade garments.

Conclusion - Imported goods under TPS must be for actual use by the importer or supporting manufacturers including job workers.

Appeals filed by Revenue are dismissed.
2025 (6) TMI 694

Upholding the re-assessment u/s 17(5) of the Customs Act, 1962 by changing the declared country of origin and consequent classification - imported 'dry dates' declared as originating from the United Arab Emirates (UAE) were in fact of Pakistan origin, based on packaging and other circumstantial evidence or not - HELD THAT:- In case of any type of assessment, besides classification and assessable value of imported goods, the country of origin is also required to be determined in accordance with the provisions of Section 14 of the Customs Act, 1962 and the Customs Tariff Act, 1975.

In the present case, it is found that the appellants had self-assessed the goods in terms of Section 17(1) ibid, by declaring the value of the imported goods as per invoice price. It is also on record that on the investigation conducted by SIIB, JNCH Customs officers in verification of such self-assessment in terms of Section 17(2) and 17(3) ibid, the appellants had submitted to the department, all the relevant documents for the supply of imported goods from the supplier’s end at United Arab Emirates, such as those specifically issued for proving the country of origin i.e., Certificate of Origin No. 21180158 dated 13.12.2021 issued by the competent authority Dubai Chamber of Commerce & Industry. These facts bring out clearly that the appellants did not confirm his acceptance for change in country of origin proposed by the proper officer of Customs for re-assessment of goods under Section 17(4) ibid. Thus, the proper officer of customs was required for passing of a speaking order on the re-assessment of imported goods under Section 17(5) ibid.

It is a fact that the packing material or the label of the packing material, that too found in part of the consignment, cannot be a reasonable basis to decide the country of origin for the online imported goods; and the packing of the imported goods is not the foolproof criteria to decide the origin of imported goods. Further, it is factually incorrect to treat the imported goods is also originating from that country of origin of packing material. The press reports published in public domain without any specific reference to the present imports cannot be taken to be a basis, when various documents such as Bill of Lading indicating the port of shipment as Jabel Ali, United Arab Emirates; commercial invoice, packing list were produced by the appellants importer showing the evidence of country of origin of imported dry dates as United Arab Emirates. Further, the Certificate of Origin issued by the Dubai Chamber of Commerce & Industry, clearly provide that the imported goods are of ‘United Arab Emirates’ origin and not of Pakistan Origin.

The evidential documents placed on record which have been issued specifically declaring that the imported goods are of ‘United Arab Emirates’ origin forms sufficient reason to conclude that the imported goods are of ‘United Arab Emirates’. Thus, there are no merits in the impugned order for upholding the order of original authority confirming that the imported goods are of Pakistan origin, without any proper support of documents for confirmation of adjudged demands and for imposition of redemption fine and penalties on the appellants importer. Further, it is not the case of Revenue that the imported goods did not comply with the Food Safety and Standards (Packaging and labelling) Regulations, 2011 and therefore the action for confiscation and penalties were proposed.

The Co-ordinate Bench of the Tribunal in the case of Doves International Vs. Commissioner of Customs, New Delhi [2018 (5) TMI 1372 - CESTAT NEW DELHI] have held that merely because of use of gunny bags showing that these bags are products on one country, cannot by itself enable that the imported goods also should be treated as though of the same country of origin to which the packaging materials belongs to.

In the case of Sukumar Mondal Vs. Collector of Customs (Preventive) [1989 (11) TMI 178 - CEGAT, CALCUTTA], the Co-ordinate Bench of the Tribunal had also held the country of origin of the imported goods cannot be decided on the basis of marks found in some of the imported goods.

Conclusion - Since there are no evidences to prove that the imported goods are of Pakistan origin and on the other hand there is substantial proof to show that the goods are of United Arab Emirates origin, it is considered appropriate to set-aside the impugned order.

The impugned order is set aside - appeal allowed.
2025 (6) TMI 693

Violation of provisions of Regulations 5, 10(1)(m) of SCMTR, 2018 and Sections 34, 39, 40, 41 of the Customs Act, 1962 - suspension of operations under Regulation 11 of SCMTR, 2018 - impugned goods covered under two shipping bills for which the LEO copy of shipping bill was not submitted - confiscation - penalty.

HELD THAT:- On perusal of Notification No.38/2018-Customs (N.T.) dated 11.05.2018 vide which the Sea Cargo Manifest and Transhipment Regulations (SCMTR), 2018, were notified by the Government, it transpires that SCMTR intends to bring about transparency, predictability of movement, advance collection of information for expeditious clearance of vessels in import/export of goods. The said SCMTR, 2018 supersedes the earlier regulations viz. Import Manifest (Vessels) Regulations, 1971 and Export Manifest (Vessels) Regulation, 1976. The new Regulations stipulate for advance notice by authorized carriers for goods arriving in or being exported out of India through gateway seaports and further movement between Customs stations. They stipulate the obligations, roles and responsibilities for the various stakeholders involved in movement of imported/export goods.

All the requirements for declaration of details including the alleged requirements under Regulation 5 ibid in the case of appellants in respect of JNCH Nhava Sheva port would be operational only when the entire SCMTR, 2018 was made fully operations for the specific port of import/export. It is an undisputed fact that the impugned two S/Bs concerning the present case are both dated 07.01.2022, for which the SCMTR, 2008 does not apply on that date as the said regulations was made operational for JNCH, Nhava Sheva port after the expiry of transitional provisions upto 30.11.2024 i.e., w.e.f. from 01.12.2024. Therefore, we are of the considered view, that the impugned order holding that the Regulations 5 and 10(1)(m) ibid have been violated by the appellants does not stand the scrutiny of law.

From plain reading of Section 41 ibid that the requirement of submission of Export General Manifest (EGM) before the departure of the vessel is primary responsibility of the person in-charge of the vessel or his agent, as may be specified through notification issued by the Central Government. Therefore, the shipping lines, NVOCC or shipping agent or such other authorised persons alone are responsible for filing the EGM within the prescribed time. The facts of the case also indicate that it is not the case of Revenue, that the EGM for vessel ‘MV Thorsky’ in respect of its voyage out of India on 09.01.2022 has not been filed. Therefore, there is no case of violation of Section 41 ibid, in the present case.

On perusal of the legal provisions of Section 113 ibid, it transpires that essential ingredients of sub-section (d), (f), (g) such as attempt to export contrary to any prohibition; loading of goods in violation of Section 33, 34; loading of export goods in a vessel without obtaining permission of proper office of customs is not present in this case. No evidence for any allegation has been made to this effect, except that the LEO copy of S/Bs have not been given before the sailing of the vessel. Therefore, the alleged violation of sub-sections (d), (f), (g) to Section 113 ibid does not stand the legal scrutiny. Consequently, imposition of penalty under Section 114(iii) ibid also does not sustain.

Conclusion - There are no merits in the impugned order passed by the learned Commissioner of Customs (General), JNCH, Nhava Sheva in suspension of the operation of the appellants; for confiscation of export goods and consequent imposition of redemption fine and for imposition of penalties, inasmuch as there is no violation of regulations 5, 10(1)(m) of SCMTR, 2018 and legal provisions under Sections 34, 39, 40, 41, 113(d), 113(f), 113(g) ibid, and the findings in the impugned order is contrary to the facts on record.

The impugned order is set aside - appeal allowed in favour of the appellants.
2025 (6) TMI 692

Levy of penalty u/s 114 of the Customs Act, 1962 - export of CD-ROMs under Duty Entitlement Pass Book - wrongful availment of DEPB scrips - evasion of Customs Duty - reliability of statements made u/s 108 of the Customs Act - HELD THAT:- The statements made under section 108 of the Customs Act cannot be relied upon if the procedure followed under section 138B of the Customs Act is not followed. This is what was held by the Tribunal in M/s. Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441 - CESTAT NEW DELHI]. The Tribunal examined the provisions of sections 108 and 138B of the Customs Act as also the provisions of sections 14 and 9D of the Central Excise Act, 1944 and observed that 'What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.'

Except for the statement made by Pankaj Soni under section 108 of the Customs Act, there is no other evidence which has been considered by the Commissioner in the impugned order for imposing penalty upon the appellant under section 114 of the Customs Act. As this statement cannot be relied upon, the imposition of penalty upon the appellant under section 114 of the Customs Act cannot be sustained and is set aside.

Conclusion - In the present case, the goods had been exported and, therefore, the goods could not have been confiscated under section 113(d) of the Customs Act. Penalty under section 114 of the Customs Act can be levied only if the goods are held liable to confiscation under section 113 of the Customs Act. As the confiscation cannot be sustained, penalty under section 114 of the Customs Act cannot also be sustained.

The impugned order dated 31.01.2006 passed by the Commissioner in so far as it imposes penalty upon the appellant under section 114 of the Customs Act is set aside - appeal allowed.
2025 (6) TMI 691

Concessional rate of Customs Duty - Claim for nil rate of basic customs duty against the “country of origin” certificate - Denial of the benefit of Notification No. 46/2011-Cus - imports of goods and filed forty eight Bills of Entry for clearance of Cocoa Powder Low Fat imported from Malaysia - demand of differential duty in respect of eleven Bills of Entry with interest under section 28AA - extended period of limitation - confiscation of the goods and imposition of penalty - HELD THAT:- This precise issue was examined by a Division Bench of the Tribunal in Symphony International [2024 (1) TMI 988 - CESTAT AHMEDABAD]. Here also the Bill of Entry was submitted for import of Cocoa powder on 12.02.2018 and the benefit of the nil rate of basic customs duty under the Exemption Notification was availed. Subsequently, a show cause notice dated 30.05.2019 was issued to the said appellant challenging the “country of origin” certificate on the ground that the regional value content in the COCOA Beans from Ghana Origin was between 13-17 percent as against the minimum qualifying value of thirty five percent. The same letter dated 10.01.2014 sent by the department to the Malaysian Government for verification of the “country of origin” certificate was relied upon, as also the reply dated 18.03.2014 submitted by the Malaysian Government.

The Tribunal held that the appellant had provided documentary evidence in the form of the “country of origin” certificate and the onus to prove that it was fake and not correct shifted to the department but no attempt was made by the department to carry out verification with the Government of Malaysia.

The facts of the present case are similar to the facts of Symphony International and Kiara Ingredients [2024 (1) TMI 988 - CESTAT AHMEDABAD]. The exports were made much later between 17.07.2014 to 03.05.2018. No reliance could have been placed on the report submitted by the authority in Malaysia in respect of exports made by some other entity in 2011-12. This apart, even the Malaysian Government confirmed that the regional value content was thirty five percent which was stipulated in the Exemption Notification.

In respect of the present exports made between 2014 to 2018 no attempt was made by the department to verify the “country of origin” certificate issued by the designated authority of the Malaysian Government. In the absence of any verification having been conducted, for the “country of origin” certificate could not have been discarded.

The demand of differential duty for the normal period of limitation was, therefore, not justified. Interest also, therefore, could not have been charged from the appellant.

The impugned order dated 10.01.2020 passed by the Principal Commissioner is, accordingly, set aside and the appeal is allowed.
2025 (6) TMI 690

Valuation of imported goods - consignment of old and used machinery and equipment through Chennai Port under concessional EPCG scheme on high seas sale basis - Rejection of declared value - manipulation of documents - extended period of limitation - denial of benefit of EPCG license.

Whether the executive is empowered to issue such circulars which help fix the value of goods for which elaborate Valuation Rules already exist? - HELD THAT:- It is noted that while the Act and Rules confer discretion to an officer under certain circumstances, it should not result in arbitrary power being conferred on the executive in the absence of any guidance as to how that discretion should be exercised. This is all the more important when it is exercised by a large number of officers at different Customs stations and in situations that has an effect on trade / industry and the financial and economic interest of the country. Administrative Instructions/ Circulars help in achieving uniformity, predictability, removal of ambiguity, cost saving and provides a level playing field for the trade on the one hand, while putting a check on blame worthy conduct on the other.

In Sant Ram Vs State of Rajasthan, [1967 (8) TMI 117 - SUPREME COURT], a Constitution Bench of the Supreme Court has held that statutory rules cannot be amended by Executive instructions but "if the rules are silent" on any particular point, Government can fill up the gaps by issuing executive instructions, in conformity with the existing rules.

With effect from 08.04.2011 Self-Assessment has become the norm of assessment of Customs duty in respect of imported / export goods. Thus the discovery of this value is facilitated by Boards circular and happens as a collaborative process by the importer giving all the factual information available with him and facilitating inspection of the goods and the Chartered Engineer appraising the goods based on recogonised methods of appraisement with the help of information provided by the importer. This appraised value can then along with other inclusions like freight, insurance etc. be declared by the importer in the Bill of Entry, if he finds the same to be truthful and representing the value in line with the Rules. The proper officer would then evaluate the evidence put forth by the importer and after giving due consideration to factors such as depreciation, refurbishment or reconditioning (if any), and condition of the goods, determine whether the declared value conforms to the provisions in the Act and Rules.

However, in this case, there is no requirement to draw on the ‘implied powers’ of an authority, since section 28 of CA 1962 can be pressed into action in such a situation as has been done in this case. Hence we do not find any merit in the appellants contention of non-mention of the rejection of appraised value in the Rules.

Manipulation of documents by BVPIL leading to the issue of a false valuation certificate by the C.E. - Suppression of correct payments made towards various expenses incurred in Australia etc. which should have formed a part of the declared value - HELD THAT:- Section 2(h) of the Indian Contract Act, 1872, as it then stood, states that ‘An agreement enforceable by law is a contract.’ Insurance contracts are special contracts. The principle of uberrimae fidei, meaning "utmost good faith," operates in insurance contracts. This is a fundamental legal doctrine, requiring both parties to act with complete honesty and transparency. They are based on the general principles of full disclosure. Thus, a proposer is under a duty to truthfully disclose to the insurer all material facts as are within his knowledge.

Further, the obligation to declare the transaction value is on the importer, who in this case has statedly got the goods free of cost, and the basic facts are within his special knowledge. When this value is challenged by revenue the burden of proof in establishing the allegations is on revenue. Once revenue has been able to create a high degree of probability discrediting the assessment certificate the onus of proof shifts onto the appellant. It is then for the appellant to discharge his onus. Thus while the burden of proof never shifts the onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence.

The C.E. Certificate produced by the appellant was found to be not reliable and has been discredited by revenue in such a situation the onus of proof shifts back to the appellant to defend the value declared in the Bill of Entry and refute the alternate value sought to be adopted by revenue. In the absence of the same revenue is understood to have discharged its burden of proof, in terms of the value alleged in the SCN, especially in a scenario when all the facts are in the special knowledge of the importer. Hence the value of the impugned goods declared by the appellant in an insurance contract can be accepted as the value of the goods ex-works, for Customs purposes in the peculiar circumstances of this case.

What other elements would have to be added to this value to arrive at the transaction value in terms of CA 62? - HELD THAT:- Any value that is ascertained as per the Customs Act and Rules framed there under must include in addition to the price, all costs incurred towards the transport of the imported goods to the place of importation. Loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation and the cost of insurance - The value of the goods based on the documents submitted by the appellant themselves has been correctly determined in the impugned order, as per the facts of the case.

Whether extended period under Section 28(4) of the Customs Act can be invoked in cases of "first check"? - HELD THAT:- "First check" assessments, involve a preliminary assessment of goods based on the information provided in the Bill of Entry and related documents provided by the importer when called for by the department or otherwise. As per section 46(4) of the Customs Act 1962, the importer while presenting a bill of entry shall at the foot thereof make and subscribe to a declaration as to the truth of the contents of such bill of entry. If even after a "first check" assessment, it's discovered that the importer made a willful misstatement or suppressed facts to obtain a lower duty or other benefits, Section 28(4) of the Customs Act can be invoked to issue a show cause notice for the extended period. When facts are concealed and not fully disclosed it amounts to suppression. Deliberate concealment or willful nondisclosure, amounts to suppression of information.

Apart from the false C. E. Certificate produced for valuing the goods, Shri T. S. Sarma in his statement, a summary of which is extracted in the para above, was not able to explain, when there was no change in the purchase order dated 02.04.2012 raised on M/s Boxco logistics India private limited by M/s MASPL how the consignee was changed to MAPL and the shipment effected in the name of MAPL when the shipment was necessarily to be done in the name of the entity raising the purchase order, or why the freight amount was paid by MAPL - Having not discharged the onus of proof of not having committed a blame worthy conduct, revenue has succeeded in over all establishing fraud and thus have rightly invoked section 28(4) of the Customs Act 1962 for demanding duty. In the circumstances the penalty imposed on Shri T. S. Sarma under section 112(a) of CA 1962 also cannot be faulted. The amount is also not shocking to the conscience so as to interfere with the quantum imposed.

Whether benefit of EPCG license can be denied without its cancellation by the DGFT, the issuing authority? - HELD THAT:- The EPCG scheme does not adopt the valuation of goods done as per section 14 of the Customs Act 1962, for issue of authorisation under the EPCG scheme. The option available to the Customs authorities was to take up the issue of the fraudulent value noticed by them with the DGFT for cancellation of authorisation issued under the EPCG scheme and if the recommendation was accepted and the cancellation was done, the notification benefit could have been denied. This is not to say that the importer is absolved of his blame worthy conduct as far as the Customs Act is concerned. Action for all statutory violations of the Customs Act, 1962 cannot be faulted. Further, the licensing authority is at liberty to examine the issue on merits and take appropriate action against the appellant in accordance with the law, if necessary.

As a principle, goods which are liable for confiscation but not available cannot be redeemed, unless the importer has undertaken to produce the goods as per the condition of the bond executed by him. Hence with regard to the confiscation and redemption of the goods on payment of a fine, it is found that although the goods were cleared on execution of a bond, it was executed in terms of notification No. 103/2009-Cus dated 11.9.2009, for binding the importer to comply with all the conditions of the notification as well as to fulfill export obligation on FOB basis equivalent to eight times the duty saved on the goods imported as may be specified on the authorization, or for such higher sum as may be fixed or endorsed by the Licensing. Not for any blameworthy conduct under the Customs Act. None of these reasons are mentioned in the SCN and are not relevant in the present case. It is earlier found the impugned goods eligible for exemption under notification No. 103/2009-Cus, and hence the goods are not liable for confiscation in terms of the bond.

Conclusion - The duty needs to be reworked out and demanded by allowing the benefit of Notification No. 103/2009-Cus dated 11.9.2009. Accordingly interest and statutory penalty imposed under section 114A on M/s Mahindra Aerostructures Pvt Ltd also may be reworked out and informed to the appellant for payment. Confiscation of the impugned goods and imposition of redemption fine is also set aside. Since a penalty has been imposed under section 114AA on M/s Mahindra Aerostructures Pvt Ltd, we feel that a penalty under the same section 114AA on Shri T. S. Sarma needs to be deleted, considering that he was an employee of the company that has already been penalised on the said count. However since the goods were liable for confiscation under section 111(m) the penalty on him under section 112(a) sustains. Any leniency shown in varying the penalties imposed on M/s Mahindra Aerostructures Pvt Ltd under section 114AA, would lack a deterrent effect and encourage others to violate statutory regulations with impunity which may have serious consequence’s affecting revenue.

Appeal disposed off.
2025 (6) TMI 616

Seizure of the consignments of buffalo meat, which were proposed to be exported to a foreign country - misdeclaration by the consignor - goods prohibited to be exported - HELD THAT:- It is ordered that, the competent officer of the Customs, shall ensure that, the adjudication process is completed, by following the statutory procedure contemplated in this regard, including hearing of the affected parties, as expeditiously as possible, at any rate within a period of two months from the date of receipt of a copy of this judgment. As regards the disposal of the articles is concerned, it is ordered that, the same shall be completed, by following the procedure, within a period of one month from the date of receipt of a copy of this judgment.

Petition disposed off.
2025 (6) TMI 615

Absolute confiscation - levy of penalty - smuggling of gold - reason to believe that the gold was smuggled gold or not - discharge of onus as required under section 123 of Customs Act, 1962 - HELD THAT:- There is no doubt that Section 123 applies to gold and manufactures thereof because the section itself says so. If gold is seized under the reasonable belief that it is smuggled gold, then the burden of proving that it is not smuggled rests on the person from whom the gold was seized. On the other hand, if there is no reasonable belief that the gold was smuggled gold, then it is for the Revenue to prove that the gold was smuggled gold.

In this case, the search was conducted on the basis of specific intelligence. When searched, the appellant had six cut pieces of foreign marked gold. When the appellant was asked on 11.4.2018, he said that he had no documents whatsoever, let alone, any duty paid documents for the seized gold. He said that he had purchased the gold without any invoices or bills from traders who had come to his shop.

In his statement recorded the next day on 12.4.2018, he again reiterated that he had no documents for the seized gold. This gave the officers reasonable belief that the six foreign marked pieces of gold were smuggled gold. When they are seized, the burden of proof shifted to the appellant from who they were seized to prove that they were not smuggled - In another statement recorded on 9.8.2018 (almost after four months), the appellant again reiterated that he had bought the gold pieces without any invoices or documents and had no documents to show their licit possession.

Whether the appellant has, by producing the invoice discharged this burden placed on him under section 123 or not? - HELD THAT:- The burden which is required to be discharged is that the seized gold was not smuggled. If gold is imported legally, there will be duty paying documents. Even if the gold so imported is further sold, copies of the duty paid documents will be available. The appellant did not produce, even before us, any duty paying documents which could possibly be seen as documents pertaining to the seized gold. What is produced is an invoice for 3080 grams of gold bars which does not even say that it pertains to imported gold or indicates any bill of entry number under which the gold was imported. The description of the goods is “Gold Bar 99.50%” and the quantity is ‘3080 grams’. Neither the description of the goods nor the quantity matches with the gold that was seized.

It is noted that this invoice cannot pertain to the seized gold because in three different statements- the third of which was recorded almost four months after the seizure, the appellant consistently stated that he had bought the seized gold without any invoices or bills from traders who came to his shop. The invoice that is produced is, at best, an after-thought but it also does not correspond to the seized gold either in terms of description or in the quantity. In this factual matrix, it is convinced that the appellant failed to discharge its onus of proving that the seized gold was not smuggled gold - As the gold as was initially presumed to be smuggled gold is hereby held as smuggled gold. Its confiscation under section 111 of the Act must be upheld.

The total value of the 2.946.80 grams of the seized gold (as assessed at the relevant time) was Rs. 83,76,464/-. Therefore, the penalty of Rs. 10,00,000/- imposed on the appellant under section 112(b) (i) of the Act is fair and proper and calls for no interference.

Conclusion - i) The appellant failed to discharge its onus of proving that the seized gold was not smuggled gold. ii) As the gold as was initially presumed to be smuggled gold is hereby held as smuggled gold. Its confiscation under section 111 of the Act must be upheld. iii) The penalty of Rs. 10,00,000/- imposed on the appellant under section 112(b)(i) of the Act is fair and proper and calls for no interference.

Appeal dismissed.
2025 (6) TMI 614

Jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue SCN - exemption from Anti-Dumping Duty - goods were manufactured in China and exported via Singapore - suppression of facts or not - extended period of limitation.

Jurisdiction of the DRI to issue SCN first - HELD THAT:- Snce a SCN issued without proper jurisdiction would be a nullity and the issue on merits would not survive. The Hon’ble Supreme Court in its judgment on the review petition in the case of COMMISSIONER OF CUSTOMS Vs M/S CANON INDIA PVT. LTD. [2024 (11) TMI 391 - SUPREME COURT (LB)], held that the officers of Directorate of Revenue Intelligence, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence and Commissionerates of Central Excise and other similarly situated officers are proper officers for the purposes of Section 28 and are competent to issue show cause notice thereunder. Hence the plea raised by the appellant stating that the officers of the DRI are incompetent to exercise the powers under section 28 of the Customs Act, 1962, fails.

The quoting of ‘section 28(1)’ instead of ‘proviso to section 28(1)’, is an inadvertent error in the Show Cause Notice. A reading of the SCN as a whole clearly brings out the mens rea involved in attempting to evade duty. The statement of Shri B. Kirthi Kumar, CEO of Shanti Rayons India (P) Ltd on 27.11.2009, indicates that the appellant was aware that anti-dumping duty, at a higher rate was applicable for the goods produced by M/s Yibin Hiest Fibre Limited Corporation, China, and exported to them by a Singapore firm. Section 58 of the Indian Evidence Act, 1872 as it stood at the relevant time, states that a fact does not need to be proved in any proceeding if the parties or their agents admit it, or if it is admitted by writing under their hands before the hearing, or if it is deemed to have been admitted by their pleadings under any rule of pleading in force at the time. The principle behind this section is that a court only decides disputed facts, so facts that are not in dispute need not be proved.

Retraction of statements - HELD THAT:- The appellant has not pleaded that the statement was retracted. Even in the case of retraction, it is for the person who claims retraction to prove that the statement was made under force, duress, coercion etc. [See K.P Abudul Majeed Vs. Commissioner of Customs [2014 (7) TMI 730 - KERALA HIGH COURT]; Surjeet Singh Chhabra Vs. UOI [1996 (10) TMI 106 - SUPREME COURT]; K.I. Pavuny Vs. Assistant Collector (HQ), Cochin [1997 (2) TMI 97 - SUPREME COURT] Further as observed by the Hon’ble Apex Court in Avadh Kishore Das Vs Ram Gopal and Ors. [1978 (12) TMI 185 - SUPREME COURT], Section 31 of the Indian Evidence Act, 1872 establishes that evidentiary admissions, while not conclusive proof, create an estoppel and shift the burden of proof. Unless shown incorrect, they serve as effective proof of the facts admitted.

Suppression of facts - HELD THAT:- The Hon’ble Gujarat High Court in Trafigura India [2023 (12) TMI 196 - GUJARAT HIGH COURT], held that suppression can take the form of suggesting wrong facts to obtain some advantage, which may not be available upon the disclosure of correct and genuine facts. Hence suppression may manifest itself in misrepresentation also.

The appellant being aware of the statement by the CEO of the company given during an investigation carried out by DRI, knew that the ground of suppression was involved and that the goods had also been seized and released on a bond. They also paid the differential anti-dumping duty involved before the issue of SCN and have not challenged the conclusion in the impugned order that the rate of ADD is correctly payable under Sl. No.25 of the notification 81/2009 Cus dated 13.07.2009. Section 114A invoked in the SCN also pertains to a case of willful mis-statement or suppression of facts etc. and supports the view that the non-citing of ‘proviso to’ before ‘section 28(1)’, was an inadvertent error. Hence no prejudice was caused to the appellant and the mere fact that the sub section was not expressly mentioned in the SCN would not vitiate the notice.

Confiscation - redemption fine - HELD THAT:- This is a case where the goods were released to the appellant on the execution of a bond. It is found that the Hon’ble Apex Court in M/s. Weston Components Ltd. v. Commissioner of Customs, New Delhi [2000 (1) TMI 45 - SC ORDER], took the view that redemption fine can be imposed even in the absence of the goods as the goods were released to the appellant on an application made by it and on the appellant executing a bond. Since the goods were released on a bond the position is as if the goods were available. Hence there is no legal infirmity in the confiscation and redemption fine imposed by the Original Authority.

Conclusion - i) The plea raised by the appellant stating that the officers of the DRI are incompetent to exercise the powers under section 28 of the Customs Act, 1962, fails. ii) No prejudice was caused to the appellant and the mere fact that the sub section was not expressly mentioned in the SCN would not vitiate the notice. iii) Since the goods were released on a bond the position is as if the goods were available. Hence there is no legal infirmity in the confiscation and redemption fine imposed by the Original Authority.

The lower authority has taken a view which is reasonable, legal and proper and hence the impugned order upheld and the appeal rejected - The appeal is disposed of accordingly.
2025 (6) TMI 613

Levy of penalty u/s 114 and 112 of the Customs Act, 1962 - export of CD-ROMs under Duty Entitlement Pass Book [DEPB] Scheme - overvaluation of goods to wrongly avail DEPB scrips - evasion of customs duty - reliability upon the statements made by the appellant and other persons under section 108 of the Customs Act - HELD THAT:- A perusal of the impugned order, so far as it relates to the appellant, shows that it has placed reliance upon the statements made by the appellant and other persons under section 108 of the Customs Act that he was involved in the export of CD-ROMs to confer undue benefit upon Sundram Exports and Netcompware.

The statements made under section 108 of the Customs Act cannot be relied upon if the procedure followed under section 138B of the Customs Act is not followed. This is what was held by the Tribunal in M/s. Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441 - CESTAT NEW DELHI] . The Tribunal examined the provisions of sections 108 and 138B of the Customs Act as also the provisions of sections 14 and 9D of the Central Excise Act, 1944 and observed 'What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.'

Except for the statements made under section 108 of the Customs Act, there is no other evidence which has been considered by the Commissioner in the impugned order for imposing penalty upon the appellant under sections 114 and 112 of the Customs Act. As these statements cannot be relied upon, the imposition of penalty upon the appellant under sections 114 and 112 of the Customs Act cannot be sustained and is set aside.

In the present case, the goods had been exported and, therefore, the goods could not have been confiscated under section 113(d) of the Customs Act. Penalty under section 114 of the Customs Act can be levied only if the goods are held liable to confiscation under section 113 of the Customs Act. As the confiscation cannot be sustained, penalty under section 114 of the Customs Act cannot also be sustained.

Conclusion - i) The statements made under section 108 of the Customs Act cannot be relied upon if the procedure followed under section 138B of the Customs Act is not followed. ii) The impugned order dated 31.01.2006 passed by the Commissioner in so far as it imposes penalty upon the appellant under sections 114 and 112 of the Customs Act is set aside.

Appeal allowed.
2025 (6) TMI 612

Assessments of imported Petroleum Crude Oil consignments - quantity to be assessed shall be as per the Ship Ullage Quantity at the port of discharge as referred to in the surveyor report or as per the bill of lading quantity? - delay in finalizing the provisional assessment.

Assessments of imported Petroleum Crude Oil consignments - quantity to be assessed shall be as per the Ship Ullage Quantity at the port of discharge as referred to in the surveyor report or as per the bill of lading quantity? - HELD THAT:- The matter has been covered vide final order No. 12380/2023 dated 21.10.2023 wherein this Tribunal relying upon the decision of Hon’ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd. vs CCE [2015 (9) TMI 245 - SUPREME COURT] had upheld the decision of Commissioner (Appeals). While dismissing appeals of the present appellant, it held that assessment has to be done at ship ullage surveyor report at the port of discharge and had dismissed the appeal filed by the appellants. There is no reason to depart from the earlier decision of this Tribunal which is in favour of Revenue. Thus, as per this decision as far as merits is concerned even for the impugned period, the issue will be decided on the basis that it is the ullage quantity at the discharge port and not the bill of lading quantity that will be the decisive factor.

Whether there was delay in finalizing the provisional assessment, as has been stated by the appellant? - HELD THAT:- Regulation 5 of the said Regulation stipulates a time of 2 months from the date of test reports. There is a force in the arguments of delay advanced by the learned advocate. The learned Adjudicating authority has relied upon the decision of Shakti Beverages which is not beyond the High Court’s decision in Bihar Foundry [2024 (3) TMI 371 - JHARKHAND HIGH COURT]] and the fact that the Customs (Finalization of Provisional Assessment) Regulations, 2018 have come into existence on the date when assessments were finalized. Also that the decision of the Hon’ble High Court in the matter of Bihar Foundry was not looked into in details by the learned adjudicating authority.

Further, it is found that the question of delay is always a question of fact and has to be looked into from the prism of as to whether any delay was attributed to the party also or was exclusively on the part of the department. In the later case, the appellants cannot be allowed to take the benefit of delay which is attributed to them. However, while there are prima facie delay has taken place but it is not forth coming whether it was exclusively due to inaction of the department or was contributed to some extent or the other, by the party also. This question of fact needs redetermination.

Conclusion - i) The assessments finalized after 16 years raise serious concerns of unreasonable delay and prejudice, requiring remand for fresh factual determination of delay attribution and prejudice. ii) The assessment of bulk liquid cargo quantity must be based on actual quantity received (shore tank quantity) and not merely on ship's ullage quantity; marginal variations within tolerance limits do not attract additional duty. iii) The principle of constructive res judicata does not bar fresh proceedings on provisional assessment issues distinct from those adjudicated earlier on demurrage charges.

Matter remanded back to the adjudicating authority to look into the matter afresh with all its factual matrix to arrive at the question of delay and to whom it was attributable - Appeals are partly allowed as conditional remand.
2025 (6) TMI 611

Demand of differential duty - assessment at rate of duty corresponding to tariff item 844 3250 of First Schedule to Customs Tariff Act, 1975 and substitution with rate corresponding to tariff item 8443 3910 of First Schedule to Customs Tariff Act, 1975 - HELD THAT:- In the Harmonized System of Nomenclature (HSN), printers intended for computers were, by notes in chapter 84, attached to ‘automatic data processing machines’ as these were solely intended for such use and not elsewhere. Inkjet technology changed all that and such acknowledgment in Harmonized System of Nomenclature (HSN) of 2002 was carried into Harmonized System of Nomenclature (HSN) of 2007 as tariff line for ‘inkjet printing machines’; at the same time, the same product – used with computers as ‘output’ or printers – was placed in the preceding sub-heading. The wisdom of that placement is best appreciated from note 5 in chapter 84 of First Schedule to Customs Tariff Act, 1975 which engages when imported as ‘system’ and not independently.

The placement of ‘inkjet printers’ in tariff item 8443 3910 of First Schedule to Customs Tariff Act, 1975 cannot be faulted. The placement of impugned goods in tariff item 844 3250 of First Schedule to Customs Tariff Act, 1975 is also not devoid of merit. This it can safely be said that in the absence of distinction afforded by the Explanatory Notes. In such circumstances, the ‘tie breaker’ of later entry comes into play; accordingly, the tariff item declared in the bill of entry must be disfavoured.

As the distinction is drawn on the ‘tie breaker’ of happenstance, it cannot be asserted that appellant had misdeclared the goods. Consequently, confiscation under section 111 of Customs Act, 1962 and penalty under section 112 of Customs Act, 1962 does not merit confirmation.

Appeal allowed.
2025 (6) TMI 610

Classification of goods imported by the appellants - to be classified under Customs Tariff Heading (CTI) 2710 1990 described as ‘Mineral Spirit’ as claimed by the appellants; or, is it classifiable under CTI 2710 1930 described as ‘High Speed Diesel Oil (HSD)’ as determined in the impugned order? - appropriate valuation of goods - whether the restrictions/ conditions for import as per ITC-HS of the FTP are applicable on the impugned goods? - HELD THAT:- BIS have prescribed Indian Standard for ‘Mineral Spirit’ as IS 1745:1978 and the same provides for 9 parameters. Once all parameters are fulfilled, the product can be called as ‘Mineral Spirit’. Similarly, BIS have also prescribed Indian Standard for HSD as IS 1460:2005 providing for 21 parameters to be tested. Once all the parameters are tested and found as per the prescribed standards, the product can be classified as HSD.

On comparison of the legal requirement as per supplementary note (e) and BIS standards, and the test report given by the Customs laboratory, it is quite clear that firstly all the 21 test parameters which are required to be done for establishing the fact that a product is ‘Diesel Oil/ HSD’ have not been tested and reported by the Customs Laboratory. Further, one of the determining parameter i.e., distillation percentage recovered at 360˚C minimum at 95% has not been fulfilled, as test report dated 16.05.2018 state that it is only 90% - on the basis of test report provided by the Customs Laboratory alone, the impugned order revising the classification of impugned goods, confirming the adjudged demands and consequent confiscation of imported goods, imposition of penalty on the appellants is not legally sustainable.

The Hon’ble Supreme Court of India, in an identical set of facts, in Gastrade International Vs. Commissioner of Customs, Kandla [2025 (4) TMI 23 - SUPREME COURT] have held that since oil in question does not fully satisfy the specifications of HSD in terms of IS 1460:2005, the correct test to determine the classification of imported goods being most akin to HSD or not, have not been applied.

Conclusion - The impugned order revising the classification of imported goods under CTI 2710 1930 and confirmation of adjudged demands, confiscation of goods and imposition of penalties on the appellants does not stand the scrutiny of law.

The impugned order dated 09.11.2020 passed by the learned adjudicating authority is set aside - Appeal allowed.
2025 (6) TMI 609

Valuation - Short payment of duty by not including 20% of the value for transportation charges and 1.125% of the value on account of insurance charges in the assessable value - HELD THAT:- The issue which is to be decided by us is whether the transportation charges in terms of Rule 10(b) of the Valuation Rules, 2007, are to be includable in the assessable value or not. The said issue has been examined by the Larger Bench of this Tribunal in the assessee’s own case M/S JET AIRWAYS (INDIA) LIMITED VERSUS COMMISSIONER OF CUSTOMS (I) (AIRPORT), MUMBAI [2021 (5) TMI 908 - CESTAT MUMBAI (LB)], wherein this Tribunal has held that 'ATF which is filled in the fuel tank of the aircraft is actually required to fly the aircraft and is a consumable for the airlines. It cannot, in such circumstances, be urged that ATF is being transported through the aircraft. A different situation would, however, arise if an oil company specifically imports ATF in large containers/tanker as “goods” or as cargo, for the purpose of selling the same to airlines. There can be no doubt that in such a situation the cost of transportation for import of ATF would have to be included in the transaction value for the purpose of determining the customs duty liability.'

As the issue has already been settled by the Larger Bench of this Tribunal in Jet Airways India Ltd, therefore, it is held that the transportation cost is not to be included in the value of remnant ATF for determining the assessable value in this case.

Conclusion - The transportation cost element is not includable in the customs valuation of remnant ATF carried in aircraft tanks for consumption by airlines, distinguishing it from ATF imported as cargo.

Appeal allowed.
2025 (6) TMI 608

Classification of the goods pertaining to provisionally assessed BE’s has been done without the authority of law - Correctness in not confiscating and imposing a redemption fine in respect of the impugned goods provisionally assessed - eligibility for benefit of concessional rate of BCD, based on the COO Certificate as per a Bilateral Free-Trade Agreements (FTA), even after re-classification - redetermination of classification of Oil Control Valve (OCV) Assembly - re-determination of classification of the other 13 imported items - imported PIO AVN Audio is appropriately classifiable under CTH 8526 9190 and is eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01.06.2011, instead of claimed Serial No.1390 (I) - re-determination of classification of the imported Computer & Bracket Assembly / Electronic Control Unit (ECU) - “relevant date” as defined under Section 28 of CA 1962, is the date of clearance of the imported ECU or not - suppression of facts or wilful misstatement of facts or not - invocation of extended period of limitation.

Whether the classification of the goods pertaining to provisionally assessed BE’s has been done without the authority of law? - HELD THAT:- The classification of goods under the Customs Tariff is a part of assessment. Assessment of duty involves the determination of the dutiability of exim goods. It involves determining the import permissibility in terms of the EXIM policy and any other laws regulating imports/exports, determining the classification and duties leviable on the goods on import – (Basic, Additional, Anti-dumping, Safeguards etc.). Permissibility of various benefits of duty-free clearances under different schemes or applicability of any exemption notification benefits, checking the quantity and value of the goods (where the duties are assessable on value basis) etc. The determination of dutiability hence creates special rights and liability and should not be finalised in a piece meal manner - the action of piece meal finalizing the classification of provisionally assessed goods has led to the department filing an appeal on the non-confiscation of the goods and non-imposition of fine and penalty, which shall be examined separately - the fiinalisation of classification of provisionally assessed BE’s without concluding the dutiability of the imported goods is not proper in law and merits to be set aside. The classification of the said goods can be done at the time of finalizing the provisional assessment, without being prejudiced by the findings in the impugned order.

Whether it is legal and proper on the part of the AA in not confiscating and imposing a redemption fine in respect of the impugned goods provisionally assessed and cleared under a bond and in not imposing a penalty on the assessee? - HELD THAT:- Revenue has relied on CESTAT Larger Bench, decision in Collector of Central Excise Vs P.M.T Machine Tools [1991 (3) TMI 163 - CEGAT, NEW DELHI-LB] wherein it is held that when provisional assessment is made it should be treated as provisional for all purposes and not necessarily provisional in respect of particular grounds only. Hence it was open to the AA to finalise the classification.

It is found that before goods can be confiscated, fine and penalty imposed, the procedures laid down in the Act must be complied with. The submission put forward by revenue does not address the core issue. An adjudication order should be the final decision in the dispute resolution process as formulated in the Act/Rules/Instructions which conclusively puts to rest all the rights and liabilities of the parties to the lis. The seminal purpose is to avoid piece-meal adjudication. When assessment has not been completed and the classification of the goods has itself been finalised prematurely and irregularly the question of confiscation or imposition of fine on the goods or penalty on persons would not arise.

There could be no question of confiscation, penalty or interest till after final assessment, otherwise there could be a situation whereby the goods are later alleged to have been undervalued or later being involved in some other blame worthy act and be subject to further rounds of similar piece-meal penal proceedings. This is untenable.

Whether the impugned goods are eligible for benefit of concessional rate of BCD, based on the COO Certificate as per a Bilateral Free-Trade Agreements (FTA), even after re- classification and hence no demand of duty is sustainable? - HELD THAT:- In case the AIFTA Certificate of Origin is not accepted by the Customs Authority of the importing party it shall be returned to the Issuing Authority within a reasonable period but not exceeding two months, duly notifying the grounds for the denial of preferential tariff treatment. As per para 16 the importing party may request a retroactive check at random and/or when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the goods in question or of certain parts thereof. In case of reasonable doubt as to the authenticity or accuracy of the document, the Customs Authority of the importing party may suspend provision of preferential tariff treatment while awaiting the result of verification. As per Para 17 if the importing party is not satisfied with the outcome of the retroactive check, it may, under exceptional circumstances, request verification visits to the exporting party.

Rule 5 of the CAROTAR allows, the Principal Commissioner of Customs or the Commissioner of Customs, to disallow the claim of preferential rate of duty without further verification, for the reasons to be recorded in writing, where the importer relinquishes the claim or the information and documents furnished by the importer and available on record provide sufficient evidence to prove that goods do not meet the origin criteria prescribed in the respective Rules of Origin. However, the present issue does not involve a dispute on the origin criteria, but only on the classification of the goods and is hence not applicable.

Whether the redetermination of classification of Oil Control Valve (OCV) Assembly is legal and proper? - HELD THAT:- HSN along with the explanatory notes provide a safe guide for interpretation of an Entry. As per the HSN Explanatory Notes, taps, cocks, valves, etc., remain under heading 84.81 even if specialized for use on a particular machine or apparatus, or on a vehicle or aircraft. Hence the cryptic conclusion in the impugned order that ‘CTH 8481 as the heading suggests is for valve used in pipes, boilers etc’ is not correct - As per the Explanatory Notes Heading 84.81 includes devices designed to regulate the pressure or the flow velocity of a liquid or a gas. Valves remain in this heading even if specialized for use on a particular machine or apparatus, or on a vehicle or aircraft. This being so the department has not been able to discharge their burden of proof on the merits of classification the impugned goods under CTH 8409.9111 / 8409.99911 (depending upon the type of engine) and thus HMIL’s classification of the goods cannot be disturbed.

Whether the re-determination of classification of the other 13 imported items i.e. Vacuum Assembly; Water Pump Assembly; Cap Sealing; Case Assembly Timing Chain; Nut Flange; Nut Washer; Oil Seal; V-Ribbed Belt; Junction Box; Piston and Piston Assembly; Connecting Rod Assembly; Camshaft Assembly; PIO AVN Audio is legal and proper? - HELD THAT:- The normal rule is that in any litigation the rights and obligations of the parties are adjudicated upon as they obtain at the commencement of the lis. When allegations of facts are admitted before the Original Authority, there was no need for him to prove what was admitted and orders have come to be passed. The Tribunal has an inherent power to prevent the right of appeal being abused by an appellant who keeps back till the stage of appeal, points of law or fact which he could have raised before the lower authority, without showing any reason and thus places the other side at a disadvantage. Persons with good causes of action should pursue the remedy with reasonable diligence at every available opportunity. When a person even by tacit or passive acceptance or by implied consent to an act, when he has a duty to speak or oppose / deny a fact or law, does not do so, with full knowledge of its consequences, then he cannot exercise that right at a later stage. The doctrine of non-traversal, as per Order VIII Rule 5 of the Code of Civil Procedure (CPC), in the case of civil litigation asserts that any factual averment in a plaint, if not specifically denied by the defendant, is deemed admitted.

Whether the imported PIO AVN Audio is appropriately classifiable under CTH 8526 9190 and is eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01.06.2011, instead of claimed Serial No.1390 (I)? - HELD THAT:- As regards HMIL’s plea that PIO AVN Audio are appropriately classifiable under CTH 8526 9190 and are eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01/06/2011, instead of claimed Serial No.1390 (I). It is already stated that once the COO Certificate covers the imported goods which satisfies the requirement of the exemption notification and is not challenged and modified as per the procedure established by the Rules of 2009, the benefit of concessional duty cannot be denied. Further, there is nothing brought out in the SCN to show that the certificate was fraudulently obtained so as to taint its acceptability. The said goods are hence eligible for BCD concession @ Nil rate as initially claimed at the time of import, i.e. prior to their re-classification.

Whether the re-determination of classification of the imported Computer & Bracket Assembly / Electronic Control Unit (ECU) is legal and proper? - HELD THAT:- As per a reading of Note 3 to Section XVII when any part or accessory can fall in Section XVII as well as in another Section, its classification has to be determined by its sole or principal use. First of all Note 3 to section XVII states that, references in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part of accessory. Hence the note deals with goods which answers to a description in two or more of the headings of the Chapters falling under Section XVII and not between goods which answers to a description in two or more of the headings of the different Sections as wrongly stated in the impugned order.

The department has not discharged the burden of proof to show that the ECU, is taxable in the manner claimed by them under CTH 8708 9090 and hence the classification as adopted by HMIL must prevail.

Whether the “relevant date” as defined under Section 28 of CA 1962, is the date of clearance of the imported ECU, whereby part of the demand is outside the ambit of two years normal period pertaining to goods covered by Order-in-Original dated 11/12/2023 and is unsustainable? - HELD THAT:- It is found that ‘any duty’ referred to in section 28(1)(a) is wide enough to cover demand of all types of duty under CA 1962 whether the assessments were correctly done or not. Section 28(3) ibid states that when the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, the proper officer shall proceed to issue the notice as provided for in clause (a) of that sub- section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of two years shall be computed from the date of receipt of information under sub-section (2). Hence the said ‘relevant date’ has to be understood as per section 28(3) read with Explanation-1 (d) to section 28(11) under of the Customs Act 1962. This being so the “relevant date” cannot begin from the date of clearance of the imported ECU’s and must be calculated from the date of receipt of information under sub-section (2) of section 28.

Where there is no suppression of facts or willful misstatement of facts hence demand and confirmation of duty liability beyond the normal period of 2 years from the date of import as per Order-in-Original dated 04/10/2023 is unsustainable and no fine on the goods or penalty on the individual can be imposed? - HELD THAT:- This is a case where the allegation of suppression has been made only because the Ld. Adjudicating Authority does not agree with some of the classification of the imported goods made by HMIL who in respect to some goods have agreed to change the classification made after DRI started its investigation and have paid the differential duty involved. This has led to the conclusion that HMIL has failed to comply with the procedures as set out in the CA 1962. However, it is settled law that the extended period cannot be invoked when the case involves a genuine interpretative issue, which is not merely an excuse given by HMIL who has short paid duty due to a change in classification of the imported goods.

In any case HMIL has not been found committing a blame worthy act and the demand has been restricted to the normal period. Hence the appeal filed by Revenue is rejected. No question of confiscation, fine and penalty hence arises.

Conclusion - The impugned orders modified by setting aside premature classification of provisionally assessed goods, rejecting revenue's appeal for confiscation and penalties, upholding HMIL's classification of ECU under Chapter 90, confirming eligibility for concessional BCD based on COO Certificates under FTAs, and clarifying the relevant date for limitation.

Appeal disposed off.
2025 (6) TMI 557

Seeking a direction to the Respondent-Commissioner of Customs to release the detained goods - It is the case of the Petitioners that no SCN has been issued till date as also that the gold items of the Petitioners are their old personal used gold items and the same ought to be returned - HELD THAT:- In the opinion of the Court, having considered the facts of the case and the documents placed on record, the detained gold items clearly appear to be used personal jewellery of the Petitioners.

The issue whether gold items worn by a passenger would fall within the ambit of personal effects under the Rules, has now been settled by various decisions of the Supreme Court as also this Court. The Supreme Court in the decision of Directorate of Revenue Intelligence and Ors. v. Pushpa Lekhumal Tolani, [2017 (8) TMI 684 - SUPREME COURT], while considering the relevant provisions of the Customs Act, 1962 (hereinafter, ‘the Act’) read with the Baggage Rules, 1998, that were in force during the relevant period, held that it is not permissible to completely exclude jewellery from the ambit of ‘personal effects’.

Thus, it is now settled that the used jewellery worn by the passenger would fall within the ambit of personal effects in terms of the Rules, which would be exempt from detention by the Customs Department.

Conclusion - The detained gold items are the personal effects of the Petitioners, exempt from customs duty and must be released.

Petition disposed off.
2025 (6) TMI 556

Valuation of imported Quick Recovery (QR) CDs - value of the imported CDs be as per the declared transaction value or should it be determined under Rule 8 of the 1988 Rules or Rule 9 of the 2007 Rules as was done in the impugned order? - applicability of 1988 Rules applied until the 2007 Rules were notified and thereafter, the 2007 Rules would apply - demand of diffrenetial duty - invocation of extended period of limitation under the proviso to section 28(1) - confiscation of the seized goods under section 111(m) - levy of redemption fine - levy of penalties.

Value of the imported QR CDs - HELD THAT:- The charging sections is that the taxable event for charging the basic customs duty is either import of goods into India or export of goods out of India and for the additional duty of customs it is the import of goods into India. Thus, if goods are not imported into India, no customs duty is chargeable even if there was a sale of goods. For example, if one imports the goods and before they cross the Customs frontiers, re-exports them, no duty of customs is chargeable - Conversely, if there is an import of goods even if there is no sale, duty of customs is chargeable because the pith and substance of duty of customs is import or export and not sale.

The valuation under section 14 of the Act and the 1988 Rules or 2007 Rules are relevant to determine the value if the goods are chargeable to import duty on ad valorem basis. This value shall generally be the transaction value but there are exceptions.

The question is how the value of such goods should be determined. Since the taxable event for charging the duty of customs is the act of importation of the goods and not the sale or purchase, whatever goods are imported should be valued in whichever condition they are imported. Ownership of the goods is not relevant.

The valuation has to be done as per Section 14 of the Act and the 2007 Rules - The proper officer may reject the declared transaction value under Rule 12 (2007 Rules) or Rule 10A (1988 Rules) if there is reasonable doubt about its truth or accuracy, after following due procedure. If rejected, the value must be determined sequentially under Rules 4 to 9.

When and how the proper officer can reject the transaction value? - HELD THAT:- Rejection of the transaction value under Rule 12 of the 2007 Rules (or Rule 10A of the 1988 Rules) is the pre-requisite for determining the value under any of the other valuation Rules. If this process was undertaken, HP India would have been aware that it‘s transaction value may be rejected and it would have had an opportunity of seeking an opportunity of being heard and an order in writing of the reasons for rejection of the transaction value under Rule 12(2) of the 2007 Rules (or Rule 10A (2) of the 1988 Rules). Unless the transaction value is rejected, the value has to be determined under Rule 3 after making adjustments as per Rule 10 of the 2007 Rules (or under Rule 4 after making adjustments as per Rule 9 of the 1988 Rules).

Without rejecting the transaction value, the impugned order re-determined the value under the residual provision of Rule 9 of the 2007 Rules (and Rule 8 of the 1988 Rules). The re- determination of the value, therefore, cannot be sustained on merits.

Time limitation - HELD THAT:- Demand of duty not paid or short paid or not levied or short levied can be raised under section 28 of the Act within the normal period of the limitation. Undisputedly, the entire demand in this case was raised beyond the normal period of limitation. The proviso to section 28(1) of the Act provides for raising a demand invoking extended period of limitation if the duty was not paid or short paid by reason of collusion, wilful mis- statement or suppression of facts. The entire period of demand is under the extended period of limitation. This proviso was invoked in issuing the SCN and in confirming the demand on the ground that the appellant had not disclosed the agreement which it had with Microsoft.

The appellant did not suppress any information or even fail to produce any information which it had any obligation to produce. After seeing that the CDs had Windows Vista, if the officer wanted any additional information and wanted to know the details of the licence which the appellant had with Microsoft for the CDs, he could have asked for them. Otherwise, the appellant had no reason to submit a copy of its licence agreement with Microsoft. The allegation in the SCN and the finding in the impugned order that the appellant had suppressed any facts cannot be sustained. The question of limitation also found in favor of appellant.

Confiscation of the goods under section 111(m) - HELD THAT:- As far as the value is concerned, it has to be truthfully declared. The importer cannot import goods for say, US$ 2,000/- and declare the value as US$ 1,000/-. The importer has to truthfully declare the transaction value and any other details which are called for. The importer has no authority or responsibility to reject the transaction value and re-determine the value using some other method. Rule 12 of the 2007 Rules and Rule 10A of the 1988 Rules empower only the proper officer‘ to do so. It is impossible for the importer filing a Bill of Entry to anticipate if the proper officer would reject the transaction value and if so, how he will re-determine the value and what would be that value and file a Bill of Entry indicating that value which the proper officer may finally determine - The responsibility of the importer is confined to truthfully declaring the transaction value in the Bill of Entry. If the transaction value is not indicated correctly, the goods will be liable for confiscation under section 111(m) and NOT if the value declared in the Bill of Entry do not match with some value determined later by the proper officer during re- assessment or in any investigation or adjudication proceedings.

Therefore, de hors the re-determination of value, the confiscation of the goods under section 111(m) cannot be sustained and needs to be set aside.

Penalties - HELD THAT:- The penalties under section 112 of the Act are contingent upon the goods being liable to confiscation under section 111 of the Act. Since we have held that the goods were not liable for confiscation under section 111 of the Act for multiple reasons, the penalties under section 112 of the Act cannot be sustained. Penalty under section 114A of the Act is imposable if duty is not paid or short paid by reason of collusion, wilful misstatement or suppression of facts. Since we have found the demand of duty itself is not sustainable either on merits or on limitation, the penalty under section 114A of the Act also cannot be sustained. Penalty under section 114AA of the Act is imposable for wilfully making wrong declaration. HP India made no wrong declaration. It is the case of the Revenue that the value should be re- determined which we have found against the Revenue. Therefore, no penalty was imposable under section 114AA of the Act. In short, all penalties need to be set aside.

Conclusion - i) The re-determination of the value of the CDs imported by HP India cannot be sustained because the transaction value was not rejected under Rule 12 of the 2007 Rules and Rule 10A of the 1988 Rules. Consequently, the entire demand deserves to be set aside on merits. ii) The demand also cannot be sustained because the elements necessary to invoke extended period of limitation were not present in this case and the entire period of demand is beyond the normal period of limitation. iii) In the Bill of Entry, the importer only has only an obligation to declare the value which it knows and has no obligation to anticipate if the proper officer or any adjudicating authority would reject the transaction value and if so, what value such officer would find correct and file the Bills of Entry accordingly. Section 111(m) of the Act does not require the importer to do the impossible. Therefore, confiscation of the goods under section 111(m) of the Act cannot be sustained in this case even if the re-determination of value was correct. iv) Consequently, penalties under section 112 of the Act which are imposable if the goods are liable to confiscation can also not be sustained. v) Penalty under section 114A of the Act is imposable if duty is not paid or short paid by reason of collusion, wilful mis-statement or suppression of facts. vi) Penalty under section 114AA of the Act is imposable for making false declarations. There is no evidence of any false declaration in this case and hence the penalty cannot be sustained.

The impugned order is set aside - appeal allowed.
2025 (6) TMI 555

Rejection of declared value under Rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - suppression in the value of the goods shown in the Bills of Entry - redetermination of value under Rule 8 of the 1988 Rules - HELD THAT:- No additional consideration was paid in the case and the invoice for Euro 1million was cancelled and no payment was made. The invoice was, according to the appellants was for the services rendered by EDAG Germany after Neel Metal failed to carry out its work. Therefore, there is no case for rejection of declared value under Rule 10A of the 1988 Rules or its re-determination under Rule 8 of the 1988 Rules.

None of the statements relied on in the SCN and in the impugned order are relevant because the Commissioner had not followed the procedure prescribed in section 138B of the Act - Therefore, the rejection of the transaction value and its redetermination and recovery of duty under section 28 of the Act cannot be sustained - Consequently, confiscation of the goods, imposition of penalties which have as their basis the re-determination of values cannot be sustained.

The penalties imposed on persons and entities outside India cannot also be sustained as the Customs Act did not extend outside India during the relevant period.

Appeal allowed.