[Order per : M.V. Ravindran, Member (J)]. - This appeal is against the Order-in-Original No. 58/2007/CAC/CC/KAP, dated 31-3-2007 passed by the Commissioner of Customs (EP), Mumbai. The relevant facts that arise for consideration is that the officers of Central Intelligence Unit, New Custom House on an intelligence detained consignments of ready-made garments pertaining to four shipping bills presented by the appellants. In three shipping bills the goods declared were ‘ladies maxis’ and in one shipping bill the goods declared were ‘ladies dress’. The FOB declared value of all the four shipping bills were Rs. 68,44,500/- and Present Market Value (PMV) was Rs. 75,28,862/- and the exporter had claimed a drawback of Rs. 8,21,340/-. The said shipping bills were examined on 31-7-2002 by the Shed Examiner and Let Export Orders were given on 2-8-2002, after making certain amendments in the price and other values consequent to which the total FOB value was reduced to Rs. 37,79,100/- and PMV was reduced to Rs. 41,56,944/- due to which drawback claim got reduced to Rs. 4,53,492/-. On further intelligence the CIU found that the four consignments which were examined on 31-7-2002 were replaced by some other consignments on 12-8-2002. Statements were recorded of the CHA, Examining Officer and Shri H.S. Shirsat, Dy. Commissioner. On completion of the investigation show cause notices were issued directing the exporter i.e., the current appellant and all others to show cause as to why :

(i)      the garments found in the original lot covered under Shipping Bill Nos. 5237476, 5237478 and 5237477 all dated 30-7-2002 and 5237212 dated 29-7-202 should not be held to be of no commercial value as the same appear to be made from used and soiled clothes; confiscated under Section 113(i) of the Customs Act, 1962;

(ii)    the drawback claim should not be held as inadmissible by virtue of the proviso (i) of Rule 3(1) of the Customs and Central Excise Duties Drawback Rules, 1995;

(iii)   the goods under seizure dated 26-8-2002 should not be confiscated under Section 113(i) and (d) of the Customs Act, 1962;

(iv)   the goods carted under check-list Nos. 5238020 and 5238023 dated 2-8-2002 in the name of M/s. Green Syndicate valued at Rs. 4,18,080/- seized on 9-9-2002 should not be confiscated under Section 113(i) and (d) of the Customs Act, 1962;

(v)     the penalty should not be imposed on each of them under Section 114(iii) of the Customs Act, 1962.

2. The adjudicating authority after considering all the representations by various parties came to the conclusion that the goods ‘garments’ of original lot covered under Shipping Bill Nos. 5237476, 5237478 and 5237477 all dated 30-7-2002 and 5237212 dated 29-7-2002 were replaced by a new lot and were mis-declared and were of no commercial value and hence ordered confiscation and imposed penalty.

3. The appellant is in appeal against the above said order.

4. The learned Advocate appearing on behalf of the appellant submits that the appellant had filed four shipping bills and the said shipping bills were examined and the said consignment was examined on 31-7-2002. After such examination, Let Export Order was given on 2-8-2002 after reducing the FOB value and PMV. It is his submission that once Let Export Order is given after the reduction of the value of the consignment, question of re-opening of the assessment does not arise. It is his submission that once the goods were assessed the only remedy available to the Revenue was to file an appeal against such an assessment, and Revenue cannot issue the show cause notice based on the statements. He relied upon the decisions of the Division Bench of the Tribunal in the case of Commissioner of Customs (Imports), Mumbai v. Lord Shiva Overseas - for the proposition that - enhancement of the value after the finality of the assessments - re-adjudication cannot be done unless there was an appeal filed against such an order. He also submits that the whole case of the Revenue is that the garments which were stuffed in the containers were substituted by the persons. It is his submission that the said allegation is without any evidence. He submits that once Let Export Order is given, the consignment is handed over to the incharge of the docks. He submits that once the consignment is in the possession or in the control of the dock authorities, replacement of the consignment is impossible unless and until there is a collusion between the dock authorities and the appellant. He submits that the Revenue authorities have not recorded any statements to bring on record that there was collusion. It is his submission that only on presumption it is held that the goods have been replaced or substituted.

5. The learned Jt. CDR along with the SDR on the other hand submit that the appellants and the exporter had intended to avail the ineligible drawback by trying to export used and soiled cloth misdeclaring them as maxis and dress. It is the submission that statements recorded of CHA and others directly indicate that there was some kind of substitution having taken place. It is the submission that there was no satisfactory explanation to the fact that why CHA had filed further additional four shipping bills in some other name and also there is no explanation as to how soiled clothes were found in the Port area. It is the submission that when the consignment was re-examined on 12-8-2002 the goods were found to be not as declared in the new bill of lading in the name of Green Syndicate. It is the submission that though the shipping bills were originally cleared and Let Export Orders were given, it cannot be said that the Revenue does not have powers to challenge the same by re-examining the consignment. It was submitted that provisions of Section 52 of the Customs Act, 1962 would apply in this case and provisions of Section 17(4) of the Customs Act, 1962 would also enable the authorities to re-examine the consignment and take any other action which may be provided in the Act. It is the submission that in this case the exporter has tried to fraudulently export soiled cloth and tried to substitute the same with garments of good quality.

6. Considered the submissions made at length by both sides and perused the records.

7. It is not in dispute that the shipping bills Nos. 5237476, 5237478 and 5237477 all dated 30-7-2002 and 5237212 dated 29-7-2002 were examined by the officers and subsequent to such examination Let Export Orders were given. The said position remains undisputed by the statements of the officers. The statements of the officers clearly indicate that the Let Export Order was given as per the direction of the Deputy Commissioner. The fact also remains undisputed that the said shipping bills for duty drawback were re-assessed and the FOB value and the PMV were reduced by the assessing officers. Due to such re-assessment of the FOB and PMV value, the duty drawback claim was reduced substantially, than, as was claimed. It is also on record that the consignment was carted into the dock area after the Let Export Order was given. It is seen from records that the Revenue has not brought any evidence to show how and when the original consignment was substituted. It is also seen that all the statements which are recorded by the Revenue do not indicate that the substitution was done by the current appellant; nor the proposition that such substitution had taken place. It seems that no efforts were taken by the authorities to record the statements of the port/dock officers to bring on record that there was some sort of collusion between the exporters and port authorities. In the absence of any direct evidence that such consignment was substituted by the appellant in the port area, we are unable to accept the proposition that the consignments which were cleared originally and for which Let Export Order was issued, was substituted. In the absence of any such evidence we are also unable to accept that the appellant was involved in substitution of the consignment. On this factual matrix we hold that the consignment cleared for export by the Examiner after reducing the FOB value and the PMV value, was the same as was found in the container. It is also on record that the said reduction in FOB and PMV value was done as per the direction of the Deputy Commissioner, Frere Basin. If that be so, it cannot now be said that there was replacement of the consignment. As regards the proposition of the learned Counsel for the appellant that the consignment having once assessed the FOB and the PMV having reduced by the assessing officer, unless there is an appeal by the Revenue against such assessment there cannot be any further re-assessment. The proposition is based upon the decision of the Bench in the case of Commissioner of Customs (Imports), Mumbai v. Lord Shiva Overseas (supra). In the case of Commissioner of Customs (Imports), Mumbai v. Lord Shiva Overseas the Division Bench was concerned with the import of plastic lighters wherein the declared price was of US $ 0.05 per piece which was enhanced by the officers while assessing the bill of entry and after such enhancement the consignment was cleared. The division bench in that case was considering the appeal filed by the Revenue where the assessment order was not challenged by authorities a separate investigation came to be initiated for enhancing the said assessed value.

8. After considering the submissions made by both the sides the Division Bench held as under :

“After hearing both sides and considering the issue, it is found -

(a)     Section 17 of the Customs Act, 1962 provides for an assessment order. Thereunder, if assessments are made and arrived at on the basis of second check, the assessment cannot be incomplete as is being urged before us. In this case, the declared value has been enhanced from USD 0.05 as declared on BE, to 0.10 USD by the ‘proper officer’ who assessed the BE. That has to be taken as having been done after due application of mind and enquiry, by the proper officer. Duty was paid on such ‘assessed value’ of 0.10 USD. Thereafter, on examination further case was made out of an incorrect declaration of value, based On E-mail/quotations received by DRI and alleged market enquiries. However such value on E-mail/quotation was not accepted by the Additional Commissioner.

(b)     The Addl. Commissioner has vide paragraph 9 of his order, dismissed the BEs produced by the importers to justify the valuation by finding -

“Because of the misdeclaration of the description of the goods, the Bills of Entry produced by the importers in support of declared value is of no consequence.”

It is found that the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, and the settled law on the subject, does not permit discarding of comparable prices as per assessed BE’s of the Customs House, merely because the import under-valuation consideration determination have misdeclaration which are not upheld as of being of any consequence. The transaction value as per invoice and of the goods under-valuation and its acceptance under Rule 4, for the consignment under-valuation, may be rejected on the grounds of misdeclaration, but the rejection of application of Rules 5 & 6 thereafter cannot be accepted on that ground as arrived by the Addl. Commissioner in this case. Rule 5 has to be applied and if ruled out then Rule 6 has to be applied as Rule 6A specifically mandates. Since that has not been done by the original authority, that order is bad in law. We find therefore no reason to upset the order of CC (Appeal) is not upholding the order of Addl. Commissioner found by us to be bad in law.

(c)     The respondents had produced BE No. 4-6-81, dated 8-2-2003 and 4-6-1992, dated 10-12-2003 where assessment was made as declared at the same values as in this case. They had also produced Computer print-outs given by Customs House, for the Bills cleared at 0.11 USD & 0.12 USD, 0.09 USD for lighters. Therefore, the value of 0.10 USD arrived at by the proper officer of Bombay Centre House initially, was arrived at 0.10 USD on comparative historical data available in Custom House and the same cannot be impugned by these proceedings. There are no grounds, therefore to set aside that value determination by the proper officer and CC (Appeals) has wisely not disturbed the same.

(d)     The non-supply of the market report is fatal to the proceedings launched and conduced to upset the assessment made at USD 0.10. Orders based on such report is required to be set aside. Merely because an enquiry was made before the CHA’s representative would not meet the requirement of Principle of Natural Justice which require service on the importers of all such reports/enquiries, before they could be relied upon. The plea made by Revenue in this appeal, on this aspect of non-supply of the report, do not merit consideration.

(e)     This Tribunal, in the case of Hitaishi Fine Craft Industries Pvt. Ltd. - [] had held that when a BE was assessed and declared value of USD 490 PMT was loaded to USD 600 PMT, then further proposal by a issue of show cause notice consequent to DRs enquiries, to re­value at USD 710 PMT in the case, cannot be upheld. Nothing contrary has been shown. When the proper officer had reasons to believe that the declared value in the present case of USD 0.05 per piece was not as per Section 14 and thereafter, making such enquiries, as he deemed fit, loaded it to USD 0.10 per pieces, then further proposal to reload the same cannot be approved since no ground of earlier enquiries were inadequate or otherwise doubted or taken to be incorrect. The proper officer was duty bound to make such enquiries as he deemed fit, including enquiry about the nature of goods, its classification, contemparances values, market values etc. and then resort to an assessment of loading. Piece-meal value loading re-adjudication is not envisaged under the Customs Act, 1962 and cannot be upheld more so when valuations as determined on the BE and assessed would be an order appealable adjudication order [see CC Cochin v. Arvind Exports (P) Ltd. - (LB)]. No review/appeal against such an order of determination of value by the proper officer was taken by Revenue. The loading for USD 0.05 per pcs to USD 0.10 per pcs is final. That assessment, cannot be challenged by alleging misdeclaration of nature of goods, which the proper officer in the groups was in any case required to ascertain, the loading of value, on second check BE should not have been ordered. In this respect, Apex Court observations in the case Mohan Meakin Ltd. [ (S.C.)] paragraph 6 need appreciation. If the Collector failed to make a proper enquiry as to the market value of the goods and released the same after half-hearted adjudication. Half-hearted adjudications and failure to make proper market enquiry in this case is to be believed, how the proper officer loaded only 0.05 USD pcs is not explained in the appeal. There is no cause to upset the CC (Appeals) order on valuation.

(f)      We to set aside the proceedings initiated by the Addl. Commissioner find no infirmity in the reliance placed on decisions of Tribunal by ld. CC (Appeals).”

9. It can be seen from the above reproduced ratio, that the Division Bench was considering the very same provision under Section 17 as relied upon by the learned Jt. CDR and SDR and have come to the conclusion that, once an assessment which has attained finality cannot be challenged by alleging mis-declaration of nature of goods. If that be so, in the present case before us, where it is a case of export, the assessment have become final, as the shipping bills were assessed, FOB value and PMV was reduced by the assessing officer. If this assessment is not challenged by the Revenue by way of filing an appeal, it attained finality and by invoking the charge of mis-declaration, the Revenue cannot ask for re-assessment of the consignment. Respectfully following the decision of the Division Bench in the case of Commissioner of Customs (Imports), Mumbai v. Lord Shiva Overseas (supra), we hold that the confiscation of the consignment by the authorities is not correct and the same is set aside. Since confiscation is set aside, the consequent penalties imposed on the appellant are also liable to be set aside and we do so.

10. Accordingly, for the reasons mentioned above, the appeal is allowed with consequential relief, if any.

(Pronounced in Court)