9911796707
TMI Blog2023 (9) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... emption under section 125 of Customs Act, 1962 on payment of fine of Rs.. 12,50,000 and imposition of penalties of Rs.. 10,00,000 and Rs.. 5,00,000 respectively on M/s Hari Darshan Exports Pvt Ltd and Shri Dinesh Dhola under section 112 and penalty of Rs.. 5,00,000 on Shri Dinesh Dhola under section 114AA of Customs Act, 1962 at the behest of jurisdictional Commissioner of Customs, has had the outcome of altering the confiscation without option to redeem while upholding the penalties. Additionally, the original authority had taken it upon himself to restrict outward remittance to the re-determined value though we are not cognizant of any authority to do so under any law. Before the Commissioner of Customs (Appeals), Mumbai-III, several grounds had been adduced, including discrepancy in value, for discarding the validity of certification furnished along with the bill of entry but the impugned order restricted findings to discrepancy in value for holding that the goods were 'prohibited' and, thus, warranting confiscation without recourse to redemption. 2. At this stage itself, it may be noted that, following confiscation, adjudicating authority proceeds to decide on disposition of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned Order is liable to be set aside. However without setting the same aside; 1 would rather prefer to modify the same In terms of section 128A(3)(a) ibid by adding the findings detailed supra and by passing an order to confiscate impugned goods absolutely under section 11 l(d) ibid. I also set aside the redemption fine imposed under section 125 of the Customs Act, 1962 as imposition of Redemption Fine after confiscation of goods absolutely becomes Irrelevant. Hence Para 21(ii) of impugned order is modified to the extent discussed supra.' even as the protest of the respondent against arbitrariness in determination of value, therein as counter to the appeal, had been allowed to be filed by Commissioner of Customs (Appeals) and was on record. 3. Appellant had imported 13278.23 carats of 'rough diamonds' against bill of entry no. 2157847/22.02.2019 from Belgium with declared value of US$ 345,769.04 and furnished invoice no. P08019/21.02.2109 as well as Kimberly Process Certificate (KPC) no. 00680530/21.02.2019. Valuation, entrusted to 'trade panel', as per prevailing mechanism, elicited the allegation that the actual value was substantially lower leading to proceedings before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing import of prohibited goods. He relied upon the decision of the Tribunal in Commissioner of Customs, Jodhpur v. Unique Ornaments Pvt Ltd [2012 (3) TMI 42-CESTAT, New Delhi], in Kiran L Ghaghda v. Commissioner of Customs (Airport), Mumbai [2016 (9) TMI 724- CESTAT Mumbai] and in Prakash Sancheti v. Commissioner of Customs, Ahmedabad [2013 (292) ELT 273 (Tri-Ahmd)]. 7. The decision to deny option of redemption had been premised on prohibition on import of 'rough diamonds' without accompanying Kimberly Process Certificate (KPC) and based on the finding that the certificate submitted was not in conformity with other supporting documents. We have perused the invoice and airway bill, both of which have declared the weight and value of the 'rough diamonds' and the cavil on the lack of segregation in accordance with 'lots' comprising the consignment appears to be more procedural than substantive; indeed, there is no finding of variation in total quantity to cast doubts on the certificate. Thus, the only discrepancy that the lower authorities could fall back on was the value of the goods and, that too, by ascertainment in accordance with a procedure peculiar to the diamond industry. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the whole of it resting on deviation from procedure devised by customs authorities in view of the peculiarities of the trade, such as limited stylized expertise, preference for secrecy and the locii of players in the diamond industry. Thus, value, in addition to compliance with Rules notified under the prescription in section 14 of Customs Act, 1962, must also adhere to the process of ascertainment, save by 'transaction value' of 'identical' or 'similar' - effectively inapplicable to 'rough diamonds' - goods, spelt out in instructions [public notice no. 30/2018 dated 19th December 2018] intended for Bharat Diamond Bourse (BDB). The foundation of this administrative instrument is 'identity' of consignment and 'anonymity' of the importer. xxxxx 13. The first appellate authority appears to be proficient in 'dialectics' which, as seen from the disposal of two issues raised by appellants - limited cross-examination permitted and serial resort to valuers in breach of instructions on examination procedure - before her, is not to be faulted but suitability for deployment in determination of legal and proper is in question. It was concluded that a representative of each of the insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appellant in getting lesser RF and they will not be aggrieved with the lesser RF imposed on them on the basis of the 3rd report relied upon by the department. Thus by saying so, I find myself in agreement with the AA as far as Order part is concerned. ...' (emphasis supplied) is not only in breach of mandate devolving on appellate authority but is also fatal to the consequent detriments. 14. Repelling the allegation that the some prior arrangement, arising out of personal relationship between the owners of the importer and supplier entities, Mr Sujay Kantawala, Learned Counsel for importer, denied any connections and, submitting that such relationship even if evidenced would not have sufficed for discarding value unless in accordance with rule 3(2) and rule 3(3) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, he also drew attention to the findings in the impugned order which, with reference to economics of the purported transaction, cast doubts on 'round tripping' as the motive for the alleged overvaluation. Furthermore, he contended that, with the stringent procedures of public notice no. 30/2018 dated 19th December 2018, any attempt at 'misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of entry and the impugned order has taken note of '(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; the sale involves special discounts limited to exclusive agents; the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; the non-declaration of parameters such as brand, grade, specifications that have relevance to value; the fraudulent or manipulated document' (emphasis supplied in impugned order) in Explanation (1) below rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 as enabling recourse to rule 12, thereby, with notice, as intended therein, having been communicated in the show cause notice leading to adjudication and culminating thereafter by the impugned order. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the argument of Learned Authorized Representative for absolute confiscation is unacceptable. 23. Considering the attention paid to resort to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, we must tarry awhile on that even if, to us, that is of peripheral relevance. From a plain reading of '...... (2) No value shall be determined under the provisions of this rule on the basis of - the selling price in India of the goods produced in India; a system which provides for the acceptance for customs purposes of the highest of the two alternative values; the price of the goods on the domestic market of the country of exportation; the cost of production other than computed values which have been determined for identical or similar goods in accordance with the provisions of rule 8; the price of the goods for the export to a country other than India; minimum customs values; or arbitrary or fictitious values.' in rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, it cannot but escape our attention that it is not a free flowing empowerment but one designed to be consistent with rule 3 of Customs Valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the process by '47. Clearance of goods for home consumption. Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption: that renders a finality to the filing of bill of entry and it is, thereby, that the 'proper officer' therein is vested with authority to grant clearance, upon which the goods cease to be 'imported' for purposes of Customs Act, 1962; such 'proper officer' is permitted to interfere with clearance only if the appropriate duty has not been paid and/or the goods are subject to some prohibition. 26. It is not the case of the lower authorities that any prohibition, 'under Customs Act, 1962 or any other law for the time being in force', stood in the way of clearance for home consumption upon assessment of bill of entry; a subsequent proceeding under Customs Act, 1962 cannot rest upon a prohibition that, at the time of clearance, was not in existence for resort to section 124 of Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorted to in accordance therewith, and not in any other circumstances. 28. The orders of the lower authorities leave no room for doubt that there is no difference in rate of 'nil' duty, corresponding to either of the tariff items - declared or substituted - in dispute, with the implication that the Customs Tariff Act, 1975 is not germane to the impugned goods. It is also not the case of the lower authorities that any other law, requiring declaration of 'value' in bill of entry for any purpose other than assessment to duty, has been breached insofar as the present dispute in concerned. In such circumstances, section 14 of Customs Act, 1962, or any Rules framed thereunder, is not of relevance to the impugned goods. Consequently, the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 cannot be brought to bear on the impugned goods. The valuation is purely academic and we, thus, reiterate our earlier observation that agencies of the State must restrict their statutory intervention only within the intent of the statute. Any excess of that will not only imperil their action but also have consequences in law.' 9. In the light of the decision of the Tribunal su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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