Page 175 - ELT_15th June 2020_VOL 372_Part 6th

2020 ] S. MUTHUSAMY v. ADDL. DIRECTOR GENERAL (ADJ.), D.R.I., MUMBAI 853

novel and, to say the least, bizarre : on the one hand, the evidence lined up by the
investigation has been collated to arrive at the conclusion that the imported
goods be assessed at ‘nil’ value and that the shipper on record is non-existent
and, yet, redemption fine has been determined on value as scrap and penalty
imposed on the non-existent entity. A value, even as scrap, is ascertainable, and
must, perforce, be ascertainable for assessment of any goods; the adjudicating
authority was not confronted with the incorporeal and if the goods are to be re-
deemed, they must, in the event of exercise of option to redeem, be subject to, as
per Section 125 of Customs Act, 1962, liability of duty by applying the rate of du-
ty for the revised description to the revised value. Among the multiple threads in
the impugned order, it is quite conceivable that the findings on the role of the
present appellants may well have been clouded by a similar lack of appreciation
of the scheme of Customs Act, 1962. Indeed, as we proceed to unravel the issue
before us, that does become demonstrably apparent. At this stage, it may not be
out of place to reflect on a significant observation made by the Tribunal, in one of
the decisions cited on behalf of the appellants and which is claimed on behalf of
Revenue, by alluding to certain portions therein, to justify the imposition of pen-
alties, on the boundaries that are erected within the administrative structure and,
at times, legislated into statute books. In the unreported decision of the Tribunal
in Knowledge Infrastructure Systems Private Limited & others v. Additional Director
General, Directorate of Revenue Intelligence, Mumbai [Order No. A/86617-
86619/2018, dated 31st May, 2018 in Appeal No. C/85234 to 85236/2017] [2019
(366) E.L.T. A95 (Tri. - Mumbai)], while considering the submission on behalf of
Revenue for perpetual, and overarching, authority was conferred, it was held
that -
‘43. Learned Special Counsel for Revenue was at pains to submit that sec-
tion 111(m) of Customs Act, 1962 had been amended to overcome the im-
pediment in the expression ‘dutiable or prohibited’ to proceed against
overvalued goods that did not entail recovery of duty and, not coincidental-
ly, with the enactment of Foreign Exchange Regulation Act, 1973. Judicial
interpretation does not support this proposition; in Rib Tapes (India) Pvt.
Ltd. v. Union of India & others [1986 AIR 2014], the Hon’ble Supreme Court
examined the original and amended versions of section 111(m) of Customs
Act, 1962 before holding that misdeclaration of value was not intended to
be visited with the confiscation envisaged in section 111(m) prior to its
amendment section. It would, therefore, appear that the sovereign legisla-
ture was sufficiently concerned with misdeclaration of value itself, and not
overvaluation, per se, as to warrant the detriment incorporated in 1973’.
and on the jurisdictional competence to pursue alleged offences beyond that con-
templated in Customs Act, 1962, and by the officers appointed thereunder, it was
decided that -
Therefore, section 111(m) of Customs Act, 1962 is not to be considered as a
special law to deal with over-invoicing and the amendment enlarged the
scope for confiscation in the event of any misdeclaration, including value,
and even on goods under transshipment; the obliteration of ‘dutiable or
prohibited goods ’ is merely an extension of that intent. That is not an angle
to be pursued. In the absence of validly determined value, the breach for
invoking section 111(m) of Customs Act, 1962 is not established. In the ab-
sence of goods that are yet to be cleared for home consumption, there is no
scope for invoking jurisdiction to hold the goods liable for confiscation.
EXCISE LAW TIMES  15th June 2020  175