The extended period of limitation under Section 28(4) of the Customs Act cannot be invoked based on mere non-payment of duty without proving positive elements of willful suppression or deliberate misstatement by the importer, particularly where the transaction is revenue neutral.

Per : RAJEEV TANDON :

The appellant is a manufacturer of iron and steel products. For purpose of manufacture they import Ferro Silicon from Bhutan. The said imports are made by them in bulk through Land Customs Station at Jaigaon, located at the Indo-Bhutan border.

2. The short question concerned in the present appeal is inclusion of the freight and insurance charges in the assessable value in accordance with the provisions of Rule 10(2) of the Customs Valuation (Determination of Value of the Imported Goods) Rules, 2007The Valuation Rules as the invoice submitted by the importer at the time of import had only indicated the FOB value of the said goods imported.

3. Vide Order-in-Original under challenge the Ld.Commissioner has directed the re-assessment of the imported goods by inclusion of an amount equivalent to 20% of the FOB value of the goods in terms of erstwhile Rule 10(2) of the Valuation RulesThe Valuation Rules and inclusion of 1.125% in terms of proviso (3) to Rule 10(2) towards insurance charge. Accordingly, the Ld.Adjudicating authority has confirmed the demand for an amount of Rs.1,08,49,409/- along with interest as leviable in terms of Section 28AA . He has also imposed a penalty of equal amount on the appellant under Section 114A of the Customs Act.

4. Vide the show cause notice dated 07.06.2022, issued in the matter, it is alleged that the importer-appellant during the period July 2017 to April 2018 resorted to short payment of IGST on account of non-inclusion of freight charges and the insurance amount in the assessable value. The department has therefore charged that the assessable value was deliberately mis-declared by the appellant and the appellant had contravened the provisions of Section 14(1) of the Customs Act, 1962 read with Rule 10(2) of the Valuation Rules 2007The Valuation Rules. The Revenue have inter alia also alleged violation of Section 12 and Section 17 of the Customs Act read with section 3(7) of the Customs Tariff Act and Section 5(1) of the IGST Act, 2017 . The Revenue‟s case therefore and as confirmed by the Order-in-Original, is that the importer by willful misstatement and deliberate mis-declaration has evaded IGST amount of Rs.1,08,49,409/- during the aforesaid period which was liable to be recovered from the appellant under the provisions of section 28(4) along with interest as leviable under Section 28AA of the Customs Act.

5. On merits the appellant has submitted before us that as at the Phuentsholing Customs Station in Bhutan and the Indian LCS at Jaigaon in West Bengal, there is no no-man‟s land between the two borders of India and Bhutan, and has therefore pointed out that the point of export for Bhutan coincides to the point of import into India. He submits that the import from Bhutan through the land border at the LCS are therefore invoiced in FOB terms, which in effect is actually the CIF value of the imported goods.

6. The Ld.Counsel Shri A.K.Prasad emphatically points out that it is the responsibility of the Bhutan manufacturer/exporter to get the goods packed, loaded in the vehicle and transported to the Customs border point, and thereafter discharge all export formalities. He goes on to submit that the point of export in Bhutan therefore effectively becomes the point of import into India and there is thus no transportation cost involved between the two borders. In other wards it is the appellant‟s strong contention that there is no difference between the