Page 179 - ELT_15th June 2020_VOL 372_Part 6th

2020 ] S. MUTHUSAMY v. ADDL. DIRECTOR GENERAL (ADJ.), D.R.I., MUMBAI 857

absence of any prejudice to duty that was leviable, resort could be had to the ma-
chinery prescribed for computing the value in circumstances envisaged by Sec-
tion 14 of Customs Act, 1962 and argues that the goods impugned herein, being
neither prohibited nor liable to recovery of any duty that was short-paid at the
time of import, could be confiscated under Section 111(d) of Customs Act, 1962
in the impugned order only by breaching the law.
17. Further contending that the genesis of Section 14 of Customs Act,
1962 is Article VII of the General Agreement on Tariffs and Trade, which sets
forth, and limits, the applicability of valuation in the customs law to -
‘1. The contracting parties recognise the validity of the general principles
of valuation set forth in the following paragraphs of this Article, and they
undertake to give effect to such principles, in respect of all products subject
to duties or other charges or restrictions on importation and exportation
based upon a regulated in any manner by value.’
and that Article I in the Brussels Definition of Value has also similarly limited the
Agreement to the levying of ad valorem duties of customs, reference was invited
to Article 15, dealing with various expressions in the Agreement, which assigns
the description -
‘the value of goods for the purposes of levying ad valorem duties of customs
on imported goods;’
to ‘customs value of imported goods’, for sustaining the cavil against resort to
the valuation provisions for confiscating goods that are not liable to duty.
18. The competence to impose penalty when duty is not leviable is as-
sailed by relying upon the decision of the Tribunal in Lalitpur Power Generation
Co. Ltd. v. Commissioner of Customs, New Delhi [2017 (356) E.L.T. 82 (Tri. - Del.)]
which discountenanced confiscation and penalty thus -
‘45. We further note that admittedly the imported drawings and designs
is exempted in terms of Notification No. 12/2012-Cus., dated 17-3-2012 and
no Customs duty is required to be paid on the same even if the said import
is treated to be import of goods. The Tribunal in the case of Sahil Diamonds
Pvt. Ltd. v. CC [2010 (250) E.L.T. 310] has held that inasmuch as the import
of rough diamond were exempted from payment of duty, no penalty can be
imposed upon the importer in terms of the provisions of Section 112 of the
Customs Act. The said decision of the Tribunal stand confirmed by the
Hon’ble Supreme Court reported as CC v. Sahil Diamonds Pvt. Ltd. [2010
(257) E.L.T. A22 (S.C.)]. Identical situation is available in the present case al-
so when the import of design and drawings is exempted in terms of Notifi-
cation No. 12/2012-Cus., dated 17-3-2012, the charge of overvaluation of
the same cannot be sustained inasmuch as no valuation is required to be ar-
rived at by the Customs. We are of the view that in such circumstances nei-
ther the goods can be confiscated nor any penalty can be imposed upon the
appellants.
In view of the above, it is seen that the receipt of drawing and designs by
the appellant from M/s. CIPL was admittedly part of the rendered service
on which the appellant has already discharged their Service Tax liability
under reverse charge basis. The said payment of Service Tax stand accepted
by the Revenue. When the appellant brought the said fact to the notice of
the adjudicating authority, he simply dismissed it without giving any con-
crete finding on the same. The appellant have already discharged the Ser-
vice Tax on the said receipt of drawings, we are of the view that there was
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