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858 EXCISE LAW TIMES [ Vol. 372

no further requirement to file Bill of Entry with the declared value. It may
also be noted that while charging the Service Tax, the Revenue has nowhere
disputed the value of design and drawings and have accepted the same
value as correct value of the services. In this scenario also, the Revenue
stand adopted in the present proceedings cannot be adopted.
46. Apart from referring to certain irregular procedural contraventions for
which the appellants have tendered a reasonable and justifiable explana-
tion, the Revenue on the contrary, has not made any endeavour to find out
the correct value of the design and drawing. There is virtually no evidence
on record, to support the Revenue’s finding that the drawing and designs
are having no intrinsic value. Such finding of the adjudicating authority are
based upon his own assumptive surmises and conjectures and not upon
any legal and valid evidence on record.’
19. Incidentally, the decision of the Tribunal in Sahil Diamonds Pvt. Ltd.
v. Commissioner of Customs, Ahmedabad [2010 (250) E.L.T. 310 (Tri. - Ahmd.)], re-
lied upon in re Lalitpur Power Generation Co. Ltd. as having been approved by the
Hon’ble Supreme Court, was no less strident in observing that -
‘26. As regards penalty, we take note of the Tribunal’s decision in case of
Suraj Diamonds (India) Ltd. v. CC (Airport) Mumbai, 2008 (227) E.L.T. 471
(Tribunal) = 2008 (86) RLT 400 wherein Tribunal by taking note of the prec-
edent decisions in case of M/s. Nalakath Spices Trading Co., 2007 (213) E.L.T.
283 (Tribunal) = 2007 (80) RLT 797 (CESTAT-Bang), Shree Subhadra Indus-
tries v. CCE, Chennai, 2001 (137) E.L.T. 1405 (Tri. - Chennai) and M/s. Jay AR
Enterprises, 2007 (210) E.L.T. 459 (Tribunal) = 2007 (79) RLT 291 (CESTAT-
Chennai) has held that inasmuch as import of rough diamonds were ex-
empted from payment of duty and were not dutiable, no penalty can be
imposed under the provisions of Section 112 of the Customs Act, 1962. By
following the above decision of the Tribunal, we hold that no penalty is im-
posable upon any of the appellant. In any case, having held that the value
as declared by the appellant was correct value, imposition of penalties upon
them is not justified. The same is, accordingly, set aside.’
20. On behalf of the appellants, it is further contended that the rules of
valuation of imported goods may not be available for invoking as a remedy for
suspected overvaluation as it would appear from the declaratory element in Rule
12 of Customs Valuation (Determination of Value of Imported Goods) Rules,
2007 for removal of doubts making it amply clear that the ‘proper officer’ may
invoke it in the specific circumstances enumerated therein including that of
availability of imports at higher prices. Taking this line of argument further, it
was posited that had it been the intent of the Parliament to confer the power to
alter the values downward, express provisions as exist in Explanation (1)(iii)(b)
of Rule 8 of Customs Valuation (Determination of Value of Export Goods) Rules,
2007 would have been enacted.
21. Moving on to other aspects of the impugned order, it is contended
by Learned Counsel that there is no finding that the appellants had anything to
do with declaration of value in the filed bills of entry and there is no evidence on
record of preparation of ‘drawings’ or placement of purchase orders by the ap-
pellants. It is further contended that the impugned order has misconstrued Sec-
tion 111(m) of Customs Act, 1962 as a weapon against an alleged act of remit-
tance outside the country. It is also argued that findings, based on statements
that were not subjected to the rigour of Section 138B of Customs Act, 1962,
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