TMI Blog2019 (10) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... the thumb rule to determine duty payable, however declared value may be rejected and proper officer may redetermine value applying Valuation Rules, 2007. Rule 1(3) provides that Valuation Rules, 2007 are applicable to export goods and not goods which have already been taken out of India. The declared value may be accepted or reassessed and in case re-assessed value is not accepted by exporter, proper officer has to pass speaking order - Thus, as per scheme of the 1962 Act, department is not remediless and courts are bound to interpret law as such. Courts while interpreting law can neither add nor subtract any word from the plain language irrespective of consequences. It is the legislature who has to rectify, repair or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. On plain reading of Section 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of export goods as defined under Section 2(19) of 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 994. As required under Section 50 of the 1962 Act, the Petitioners as and when exported goods filed shipping bill declaring description, quantity, value, name of foreign buyer etc. A team of Custom Officers i.e. Inspector, Superintendent and Assistant Commissioner physically verified export goods and noted on shipping bill as per invoice and packing list or value reduced for the purpose of duty drawback . The goods were examined and assessed in terms of Section 17 of the 1962 Act. It would be relevant to notice that prior to 8.4.2011, there was no self assessment which was introduced by Finance Act, 2011 w.e.f 8.4.2011. The Custom Officers permitted export of goods in terms of Section 51 of the Customs Act, 1962. As conceded by both parties, no separate assessment order was passed and drawback was released after export of goods. 2.1 The Petitioner realized export proceeds nevertheless Directorate of Revenue Intelligence (DRI) initiated an investigation against the Petitioners alleging that Petitioners are fraudulently availing duty drawback by grossly overvaluing the goods in the export documents. The DRI searched various premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of repeal of Drawback Rules, 1995 w.e.f. 01.10.2017. In the present cases, show cause notice dated 4.9.2014 ( Annexure P-6 ) and order-in-original dated 25.11.2016 ( Annexure P-9) came to be issued/passed prior to repeal of Drawback Rules, 1995 with effect from 1.10.2017 . 6 . In Famina Knit Fabs (Supra ) , we have held that inspite of availability of alternative remedy available under 1962 Act, writ petition is maintainable in view of involvement of pure questions of law as well jurisdiction and law enunciated by Hon ble Supreme Court and followed by this court time and again. On the question of reasonable period of limitation to issue show cause notice raising demand of duty drawback, relying upon judgment of Hon ble Supreme Court in State of Punjab versus Bhatinda District Co-Op. Milk P. Union Ltd. 2007 (217) ELT 325 and this court in Gupta Smelters Pvt. Ltd. versus Union of India 2019 (365) ELT 77 (P H), GPI Textiles Limited versus Union of India 2018 (362) ELT 388 (P H), CCE Vs Hari Concast (P) Ltd. 2009 (242) E.L.T. 12, we have held that period of 5 years from the date of export/assessment is a reasonable period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty drawback. Judgment of the present petition was reserved on 05.09.2019, however Mr. Jagmohan Bansal on 20.9.2019 pointed out judgment dated 18.9.2019 of Hon ble Supreme Court in the case of ITC Vs CCE 2019- TIOL-418-SC-CUS-LB to support his contention that Respondent has no power to reassess value of goods already exported and Rule 16 of Drawback Rules, 1995 is sort of execution proceeding. He further contended that in view of recent enunciation of law by Hon ble Supreme Court, issue involved may be decided as it is pure question of law. In view of enunciation of law by Hon ble Supreme Court, we deem it appropriate to deal with question of power of Respondent to re-assess shipping bill of goods which have already been exported out of country. 9 . Contention of Petitioner is that prior to 08.04.2011, assessment was framed by Proper Officer under Section 17 of the Customs Act, 1962 and w.e.f. 08.04.2011 concept of self assessment was introduced. The Petitioner exported goods under physical supervision of the Respondent Officers, who prior to April 2011 made assessment and after April 2011 verified self assessment and either accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the goods have left India. Demand of drawback can be raised only after export of goods so department has right to re-determine value even after export of goods thus contention of Petitioner is fallacious. Drawback is consequential to export of goods and department as per Valuation Rules has power to reject already assessed value and re-assess value thereof. Mr. Bindlish contended that DRI has been vested with power of assessment under Section 17 of the Act, 1962 so DRI has power to reopen any assessment and to conduct examination or test which it deems necessary. There is no provision which debars DRI to reopen the assessment and to conduct necessary examination. The DRI had made thorough investigation wherein it was found that Petitioner had mis-declared value of export goods and availed drawback in excess of what he was entitled thus DRI has power to reassess value of goods already exported. Both the State Counsels in single voice contented that as per Rule 8 of Valuation Rules, 2007 which are framed in terms of Section 14 of 1962 Act, the Proper Officer has power to reject declared value, in case he has reason to doubt the truth or accurac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods. ( 2) The proper officer may verify the self-assessment of goods and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary: ( 3) For verification of self-assessment under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker s note, insurance policy, catalogue or other document, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. ( 4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly , the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be, can be ascertained, and to furnish any information required for such ascertainment which it is in his power to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information. ( 4) Notwithstanding anything in this section, imported goods or export goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section(3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or documents or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. ( 5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment. The Respondent-department has power of reassessment under Section 17(4) (5) of 1962 Act and there is no other provision which permits reassessment. In case of assessment by Proper Officer as well self assessment and reassessment, value of export and imported goods is determined. 11 . The entire issue raised by Petitioner revolves around the definition of export goods and application of Valuation Rules, 2007 to exported goods i.e. goods which have already been taken out of India. Assessment ; export ; export goods and imported goods have been defined under Section 2 of Customs Act, 1962. Relevant Sections are extracted as under:- Customs Act, 1962 Section 2(2) assessment includes provisional assessment, selfassessment, re-assessment and any assessment in which the duty assessed is nil. Section 2(18) export with its grammatical variations and cognate expressions, means taking out of India to a place outside India ; Section 2(19) export goods means any goods which are to be taken out of India to a place ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for, - ( i) the circumstances in which the buyer and the seller shall be deemed to be related; ( ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; ( iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section : Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. ( 2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with sub-rule (1) of rule 3. ( 2) At the request of an exporter, the proper officer shall intimate the exporter in writing the ground for doubting the truth or accuracy of the value declared in relation to the export goods by such exporter and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation. - (1) For the removal of doubts, it is hereby declared that - ( i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 6. ( ii) The declared value shall be accepted where the proper officer is satisfied about the truth or accuracy of the declared value after the said enquiry in consultation with the exporter. ( iii) The proper officer shall have the powers to raise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of Section 142 of the Customs Act, 1962 (52 of 1962). Emphasis Supplied 14 . As cited by Mr. Bansal, Hon ble Supreme Court in the case of ITC Ltd. Vs. Commissioner of Central Excise, Kolkata-IV 2019-TIOL- 418-SC-CUS-LB has dealt with question of maintainability of refund application under Section 27 of the Customs Act, 1962, where self assessment qua bill of entry has not been challenged by the Importer before Appellate Authority under Section 128 of 1962 Act. Hon ble Supreme Court after noticing its earlier judgments in the case of Priya Blue Industries Vs Commissioner of Customs 2004-TIOL-78-SC-CUS, Escorts Ltd. Vs Union of India Ors. 2002-TIOL-2706-SC-CX and Collector of Central Excise, Kanpur Vs. Flock (India) Pvt. Ltd. 2000(120) E.L.T. 285 (S.C.) has held that Section 27 is more or less in the nature of execution proceedings and it is not open to the authority which proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [( 1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] ( 2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf. 43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression 'Any person' is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per section 2(2), as such, it is appealable in case any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. 15 . Hon ble Supreme Court in ITC Vs CCE ( Supra ) has made it clear that self assessment or assessment made by proper officer under Section 17 read with Section 2(2) of 1962 Act is an assessment so an importer is bound to file appeal under Section 128 for its modification if he wants to claim refund under Section 27 of the 1962 Act because Section 27 is sort of execution and while deciding refund application an Assistant Commissioner cannot modify assessment made at the time of import. Thus, it is evident that refund claims whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or amend the law in case any judgment interpreting law is not acceptable or is contrary to intent and purport of enactment. On plain reading of Section 17, 50 and 51 with Valuation Rules, 2007, we find that Respondent is neither vested with power of reassessment of goods already exported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of export goods as defined under Section 2(19) of 1962 Act, thus Respondent cannot invoke Rule 6 8 of Valuation Rules, 2007. In view of judgment of Hon ble Supreme Court in the case of ITC Vs CCE ( Supra ), we find that shipping bill either self assessed or assessed by proper officer is amenable to appeal by both sides. Respondent by way of show cause notice under Rule 16 of the Drawback Rules, 1995 cannot modify assessed shipping bill. Therefore, we hold that Respondent in terms of Rule 16 of Drawback Rules, 1995 as well Valuation Rules, 2007 has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods. In the present case, goods in question stood exported thus impugned order is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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