Commissioner of Customs (Preventive) Vs Bushrah Export House (CESTAT Delhi)
Seizure for overvaluation of exports-Valuation provisions to be considered at stage of confiscation and not seizure
The CESTAT New Delhi has held that provisions of Section 14 of the Customs Act, 1962 and Rule 3 of the Export Valuation Rules have to be applied only at the stage of considering liability to confiscation (in a case of alleged overvaluation), after providing an opportunity as contemplated in Section 124, and not at the stage of seizure. The Tribunal was of the view that it is only at the stage of confiscation it is determined whether the goods entered for exportation correspond in value or in any material particulars with the entry made in the shipping bill. Noting that for seizure of goods, the proper officer should only have reason to believe that the goods are liable to confiscation, the Tribunal set aside the Order of Commissioner (A) which in turn had set aside the seizure observing that transaction value can be challenged only in accordance with the Export Valuation Rules and that the procedure prescribed therein was not followed by the department.
FULL TEXT OF THE CESTAT JUDGEMENT
This Appeal has been filed by the Commissioner of Customs (Preventive), Lucknow1, to assail the order dated June 10, 2020 that was passed by the Commissioner (Appeals), Customs, GST & Central Excise, Lucknow2. The said order of the Commissioner (Appeals) sets aside the order dated June 03, 2020 passed by the Superintendent, Customs, ICD, Panki, Kanpur3, seizing the goods under section 110(1) of the Customs Act, 19624.
2. The Appeal was filed before a Bench of the Appellate Tribunal at Allahabad on June 22, 2020. It has been transferred to the Principal Bench of the Tribunal at Delhi by judgment and order dated October 15, 2020 of the Supreme Court. The operative portion of the judgment of the Supreme Court is reproduced below :
“The appeal which has been filed by the Chief Commissioner Customs [Appeal Diary No 70226/2020] is pending before the CESTAT, Prayagraj. Mr N Venkataraman, learned Additional Solicitor General appearing with Ms Nisha Bagchi, learned counsel on behalf of the respondents apprised the Court of the fact that presently the Bench of the Tribunal at Prayagraj is not functional due to the existence of vacancies.
2. There is a need for an early resolution of the appeal or, in any event, the application for stay that has been filed by the Customs Department. Hence, the ends of justice would be served if the appeal is transferred to the Principal Bench of the Tribunal at New Delhi so that the appeal or, as the case may be, the application for stay can be taken up expeditiously. Mr Vishwajit singh, learned counsel appearing on behalf of the petitioner has no objection to this course of action to facilitate an early resolution of the dispute.
3. We accordingly transfer Appeal Diary No 70226/2020 from the CESTAT, Prayagraj to the Principal Bench at New Delhi. We request the Chairperson of the CESTAT to take up the appeal upon transfer to New Delhi expeditiously and, in the event that it is not possible to dispose of the appeal in its entirety, to take up the application for stay on an expeditious basis. The Tribunal would endeavor to dispose of at least the application for stay within a period of two weeks of the receipt of the papers on transfer.
4. The Special Leave Petition is disposed of. Liberty is granted to the learned counsel appearing on behalf of the contesting parties to move this Court for further directions, should it become necessary.
5. Pending applications, if any, stand disposed of.”
3. The papers of the Appeal were received at the Principal Bench of the Tribunal at Delhi on October 23, 2020 and after due intimation to the parties, the Appeal was listed on October 26, 2020. However, as learned Counsel for the
Respondent stated that the Appeal may be listed after four days so as to enable the Respondent to file a reply, the Appeal was directed to be listed for final hearing on November 04, 2020.
4. The records indicate that the export cargo presented by M/s Bushrah Export House5 through two shipping bills bearing numbers 2807972 and 2808169 dated May 23, 2020 were examined by the Officers of Customs at Kanpur on June 1, 2020 and on examination of the goods, it was noticed that there was a mis-match in the quantity declared in the invoice and the quantity actually found in the shipping bill bearing no. 2808169. Samples were also drawn for a market opinion regarding the value of the export goods and a panchnama was prepared on June 01, 2020.
5. On record is also a panchnama recovery memo dated June 03, 2020. It states that the panchas were called on June 03, 2020 at Indian Container Depot (ICD), Panki, Kanpur, to witness further proceedings required to be undertaken under the provisions of the Customs Act pursuant to the panchnama proceedings dated June 01, 2020. Shri Jai Prakash Yadav, ‗H‘ Card Holder, was present as an authorised representative of the Appellant in the proceedings connected with the shipping bills. Thereafter, the panchas along with the Officers of the Customs and Shri Jai Prakash Yadav reached the Customs Bonded Warehouse, where the cargo covered by the two shipping bills was kept. The panchnama gives details of the two shipping bills. It mentions the product description, the number of pieces, the prevailing market value and the drawback percentage. The panchnama also mentions that the two shipping bills had been filed claiming the benefit of drawback (DBK), Rebate of State Levies (RoSL) and Merchandise Exports from India Scheme (MEIS). The DBK and RoSL involved in the two shipping bills has been stated to be as follows :
