Page 171 - ELT_15th June 2020_VOL 372_Part 6th

2020 ] S. MUTHUSAMY v. ADDL. DIRECTOR GENERAL (ADJ.), D.R.I., MUMBAI 849

2020 (372) E.L.T. 849 (Tri. - Mumbai)
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI
Shri C.J. Mathew, Member (T) and Dr. Suvendu Kumar Pati, Member (J)
S. MUTHUSAMY
Versus
ADDL. DIRECTOR GENERAL (ADJ.), D.R.I., MUMBAI
Final Order Nos. A/86083-86086/2019-WZB, dated 6-6-2019 in Application
No. C/Misc./86676/2018 in Appeal Nos. C/86222/2017 with C/86215,
86223-86224/2017
Valuation (Customs) - Revaluation - Importer has to be put on notice
of rejection of declared price - In absence of acceptable defence, confiscation
of goods is administrative overreach - Rule 12 of Customs Valuation (Deter-
mination of Value of Imported Goods) Rules, 2007 - Section 111(m) of Customs
Act, 1962. - Value is susceptible to many interpretations and definitions. For the purpose
of levy of duties of customs, certain rules of engagement, universally acknowledged, are
enacted in the statute and the governing Rules. Mere application of the Rules for en-
hancement of value does not carry with it the stigma of misdeclaration. To do so would be
to place a premium on, and accord a finality to, the value arrived at for the limited objec-
tive of levy without in any way impinging upon the contractual obligation between buyer
and seller operating in a commercial marketplace. Therefore, it will be essential for an
adjudicating authority to establish that the difference between the assessed value and the
declared value arises from circumstances in which there has been an attempt to conceal
the real transaction in money. In the absence of such evidence, goods that are burdened
with revaluation, conceived from comparison with other imports, should not be further
burdened by confiscation which was intended as a definitive consequence of the commit-
ting of an offence. We dare say that it is in these circumstances, revaluation of imported
goods, as existing then, that the overvaluation, referred to in amending of Section 111(m)
of Customs Act, 1962, was contemplated by the sovereign legislative organ of the Union
for incorporation as justifying the detriment of confiscation. [para 31]
Valuation (Customs) - Revaluation - Misdeclaration based on pre-
sumed relationship between exporter and importer indicated in investigation
report - It is not sufficient for revaluation, especially where relationship has
not been tested on Rule 2(2) of Customs Valuation (Determination of Value of
Imported Goods) Rules, 2007 - In such case, revenue cannot invoke Sections
111(m), 112 and 114AA of Customs Act, 1962. [paras 32, 33]
Valuation (Customs) - It has to be equal for all purposes under Cus-
toms Act, 1962 - It is not permissible to have ‘nil’ for assessment of Bills of En-
try and different value for redemption of goods. - If the goods are redeemable, for
being ‘scrap’, the nature of the ‘scrap’ should have been determined with reference to the
heading in the First Schedule to the Customs Tariff Act, 1975 as duty liability should
inevitably be discharged even on ‘scrap’. This leap of ‘unreason’ is neither consistent with
Section 12 of Customs Act, 1962 mandating levy of duty on goods nor with Section 125
of Customs Act, 1962 mandating discharge of duty liability on redeemed goods. [para 34]
Valuation (Customs) - Drawings for vessels - ‘Nil’ commercial value
cannot be based on superfluity of goods in operations of importer - Section 14
of Customs Act, 1962. [para 9]
EXCISE LAW TIMES  15th June 2020  171