TMI Blog2021 (7) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at US$ 2.83 per kg and, therefore, the said assessment order may not have any relevance. The appellant had also pointed out to the adjudicating authority that similar goods were allowed to be imported by other importers at much lower value at US$ 1.55 per kg by the Customs Authority after enhancement of the value of the goods. There is no discussion of this fact in the impugned orders. In the instant case, the appellants had declared the transaction value of the impugned goods in the Bill of Entries at 0.95 US$ per Kg as per the sales contract between the supplier and the appellant. It is important to note that the appellants and the supplier are not related parties. However, the transaction value declared by the appellant was sought to be re-determined by the Customs department without providing any reasons - In the impugned order, the differential duty has been calculated at the rate of US$ 2.83$ per kg solely on the basis of the DRI letter dated 17.12.2020, which has not been provided to the appellant - The same goods, it has been stated by the appellants, were allowed to be imported by other importers at much lower value at US$ 1.55/kg by the Customs Authorities after enh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant and the learned Authorized Representative of the Department, it would be necessary to state the relevant facts relating to the both the appeals. Elvance 6. Elvance claims to be engaged inter-alia in import of various types of fabrics. It entered into a contract with M/s. Dauer International Limited London for purchase of 100% Polyester Knitted Fabric at US$0.95 per kg. Elvance filed a Bill of Entry dated 26.09.2020 through its Customs Broker and sent an e-mail to shipping agencies and ICD Pithampur on 28.09.2020 with a request for First Check examination of the Bill of Entry so as to avoid any delay in clearance. However, as the Department kept the request for First Check examination on hold, Elvance sent reminders for First Check examination and in the meantime Elvance imported two more consignments, for which two Bills of Entry, each dated 21.10.2020, were filed. These were also kept on hold by the Department. The goods were examined by Directorate of Revenue Intelligence [DRI] and Panchnamas dated 02.11.2020, 03.11.2020 and 04.11.2020 were prepared. The goods were then seized under section 110 of the Customs Act alleging that the goods were not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise also, the Directorate of Revenue Intelligence as informed by learned counsel for Directorate of Revenue Intelligence has already submitted a report to respondents No. 2 and 5. Resultantly, the respondents No. 2 and 5 are directed to decide the petitioner s application for provisional release of goods, within a period of ten days, from today, in accordance with law, on merits. Respondents shall pass a speaking order without begin influenced by the order passed by this court. With the aforesaid observation, the writ petition stands allowed alongwith other connected petition No. 1849/2020 which is arising out of the same dispute. (emphasis supplied) 7. The Commissioner thereafter passed the order dated 17.12.2020, after making reference to DRI letter dated 17.12.2020 and paragraphs 2.1 and 2.2 of the Circular dated 16.08.2017 issued by the Government of India. The Commissioner directed for provisional release of the goods on execution of a bond and furnishing of security deposit. The relevant portion of the order is reproduced below: 5. Where provisional release of seized imported goods is allowed, the bond referred to in Para 2.1 shall contain an undertaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of ₹ 3,81,23,27/- and furnishing of Security deposit of ₹ 3,01,47,151/- 8. It is this order dated 17.12.2020 that has been assailed in the appeal filed by Elvance. Sedna 9. Sedna also entered into a contract with M/s. Dauer International Limited London, for import of 100% Polyester Knitted Fabric at US$0.95 per kg. It filed a Bill of Entry dated 23.09.2020 and the proper officer passed an order dated 23.09.2020 for examination of the goods. Sedna assessed the duty and paid the duties. While the goods were pending out of charge order‟, the Department started search and seizure and re-examination of the goods on 28.09.2020 and 29.09.2021. Panchnamas dated 25.09.2020, 28.09.2020 and 29.09.2020 were also prepared. 10. Sedna filed a letter dated 04.11.2020 for provisional release of the goods and also made a prayer for sending the goods to warehouse under section 49 of the Customs Act. Sedna and Elvance filed a Writ Petition before the Indore Bench of the Madhya Pradesh High Court for provisional release of goods and, as noticed above, both the Writ Petitions were allowed by judgment and order dated 17.12.2020 with a direction to the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been wrongly calculated without considering the benefit of the Notification dated 30.06.2018 that was available to the appellant. This will, in turn, effect the bond amount and the security deposit amount for provisional release of the goods; and viii) Penalty under section 112 and 114A of the Customs Act is not imposable and, therefore, the amount of security deposits deservers to be reduced. 13. Learned Authorized Representative of the Department, however, supported the impugned order and made the following submissions: (i) The goods imported by of Sedna and Elvance were examined and on being tested at the laboratories were found to be mis-declared in description. The report suggested that the imported goods were Warp Knitted Fabrics which was against the declaration of 100% Polyster knitted fabrics that was made; (ii) The conditions imposed for provisional release is as per section 110A and cannot be said to be harsh; and (iii) The Proper Officer had reasonable belief that the declared price was liable to rejected as per rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [the 2007 Valuation Rules] read with section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in writing, increase or decrease the amount of security deposit indicated in paragraph 2.2. Paragraphs 3 and 4 of the Circular remind the Authorities about the observations made by the Madras High Court and the Delhi High Court while allowing provisional release of goods. The relevant portion of the Circular is reproduced below: Circular Dated 16.08.2017 Subject: Guidelines for provisional release of seized imported goods pending adjudication under Section 110A of the Customs Act, 1962 - reg. The following guidelines are being issued for guidance of the adjudicating authorities in order to ensure uniformity and to streamline the divergent procedures being followed for grant of provisional release of imported goods which are seized under Section 110 of the Customs Act, 1962. Section 110A of the Customs Act, 1962 states that Any goods, documents or things seized under section 110, may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require . 2. While provisional release of seized imported goods under Section 110A of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. [Writ Appeal No. 377 of 2016 decided on 28.07. 2016], observed that sufficient discretion has to given to the adjudicating authority in passing an order for provisional release of the goods. 20. It is in the light of the aforesaid principles that the factual position relating to these two appeals has to be examined. 21. What transpires from the records is that both Elvance and Sedna had executed written contracts with M/s. Dauer International Limited, London, for purchase of 100% Polyester Knitted Fabric and the price agreed upon between the parties was US$0.95 per kg. This is the price that was also mentioned in the Bills of Entries submitted by Elvance and Sedna. The goods have been seized under section 110 of the Customs Act, as according to the authorities they appeared to be of higher quality than what was declared. The Department also believed that the goods were made of elastomeric yarn. However, the Textile Committee Laboratory in the Ministry of Textile on testing found that the goods did not contain elastomeric yarn. 22. It is only on the basis of a letter dated 17.12.2020 sent by DRI that the adjudicating authority observed that the value of the goods should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20% of value of impugned goods towards redemption fine under section 125 of the Customs Act, (20% of ₹ 3,81,23,274/-) ₹ 76,24,655/- 10% of differential duty towards penalty under section 112 of the Customs Act, (10% of ₹ 1,07,24,903/-) ₹ 10,72,490/- 100% of differential duty towards penalty under section 114A of the Customs Act, (100% of ₹ 1,07,24,903/-) ₹ 1,07,24,903/- Extra amount ₹ 200/- Sedna Particulars Amount (in Rs.) Calculation of the amount Bond 1,91,07,522/- Full value of seized goods: ₹ 1,91,07,522/- Security Deposit/Bank Guarantee 1,50,96,851/- Total differential duty calculated by Department ₹ 53,69,213/- 20% of value of impugned goods towards rede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are classifiable under Customs Tariff Item 6006 3200 and, therefore, eligible for benefit of the aforesaid notification. 30. It has also been submitted that penalty under section 112 of the Customs Act is linked to confiscation under section 111 of the Customs Act. Thus, it is only where the goods are liable to confiscation under section 111 that penalty can be imposed under section 112 of the Customs Act and as there arises no case for confiscation of the goods under section 111(m) of the Customs Act no case for invoking section 112 for imposing penalty as the appellant declared the value as per the contract. It is, therefore, the submission that since the transaction value has to be accepted, differential duty is not payable and hence there is no question of any penalty to be imposed under section 114A of the Customs Act. It has also been submitted that section 114A provides that no penalty can be imposed under it as well as under section 112 of the Customs Act. 31. It will not be appropriate to determine the aforesaid submissions made on behalf of the appellants as they may have a bearing on the final decision to be taken by the adjudicating authority. However, these facto ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
