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2009 (8) TMI 885 - AT - CustomsClaim of ineligible duty drawback - present market value of the goods, which has been purchased by the appellant from the local market - over-invoicing of the value - violation of misdeclaration of the export consignment in order to avail ineligible of drawback - appellants herein contested show cause notice on the ground that there is no misdeclaration of the value and also submitted that the exported consignments were received by the overseas party and the foreign exchange is realized - Difference of opinion. Whether the order passed by the Commissioner is liable to be set aside as proposed by Member (Judicial) or the order is required to be upheld and appeal dismissed as held by Member (Technical)? HELD THAT:- It was held by learned Member (Technical) that The purpose of drawback is to refund the duty suffered on the material used in the export product and in respect of all industry rate the quantum of duty is arrived at on the basis of average market value prevailing in the market for those goods and that is why these restrictions under Sec. 76 has been put. In view of this I uphold the finding that there was a misdeclaration of the present market value of goods which has been admitted by one and all and accordingly the drawback has been correctly denied. For same reasons I uphold the penalties imposed and confiscation of goods. It was also held by learned Member (Technical) that Receipt of remittance supported by bank realization certificate is of no consequence as firstly what is mainly been disputed in the present case is not the FOB value, but procurement price of bicycle parts (domestic market value) and secondly receipt of remittance supported by bank realization certificate is not a sure indication of declared export price being correct. The learned Member (Technical) of the regular Bench has arrived at an acceptable conclusion on the basis of the available materials - there are no proof of duress, coercion or threat was produced by Shri Mukhia. Moreover, the retraction made through reply to show-cause notice after more than two years from the date of confessional statement is not a valid retraction. It is also pertinent to note that Shri Vinod K. Agarwal, managing director of M/s. Ad-Manum Finance Ltd. and partner of M/s. Agarwal Overseas Corporation, did not come forward to support the claim of Shri Mukhia that the latter’s statements had been recorded under duress, coercion or threat. The statements of other witnesses are also against these appellants to varying extents and none of them was sought to be cross-examined by any of the appellants. In any case, there is nothing in these statements to support the appellants. Thus, the learned Member (Technical) is agreed upon in his assessment of the evidence collected by the Revenue under Section 108 of the Customs Act. As per Section 76(1)(b) of the Customs Act, no drawback shall be allowed in respect of any goods the market price of which is less than the amount of drawback due thereon. This provision makes it imperative for any drawback claimant to show that the amount of drawback claimed by him is less than the market price (PMV) of the export goods. In other words, he is bound to disclose the PMV of the goods. Where he fails to do so, the department would proceed to determine the PMV of the goods through market enquiry. This is precisely what happened in the present case. In the present case, admittedly, M/s. Agarwal Overseas Corporation and M/s. Ad-Manum Finance Ltd. had not even made an attempt to show that the PMV of the export goods was higher than the amount of drawback claimed by them. They did not even disclose the specifications of the bicycle parts procured by them from M/s. Puneel Traders and M/s. Craftmen and exported under claim of drawback. Such specifications of the goods, if declared by the exporters, would have enabled the department to conduct a more effective market enquiry for the PMV of the goods. In view of the above conduct of the appellants, I hold that the present challenge against the results of the market enquiry conducted by the department is devoid of bona fides or merit. In other words, the PMV of the goods ascertained by the department is unassailable in the circumstances of this case. In the present case, the PMV determined by the department on the basis of documentary evidence gathered from other exporters in respect of contemporaneous exports of similar goods is much lower than the amount of drawback claimed. As already noted, the appellants have not succeeded in showing that this PMV was determined arbitrarily. On the other hand, the oral evidence gathered by the department under Section 108 of the Customs Act corroborates the basis of determination of PMV by the department. The Commissioner’s order is sustainable in law as held by the learned Member (Technical) - Registry is directed to place the records before the regular Bench on 13-8-2009 for formulation and pronouncement of the majority decision. The impugned order is sustained and the appeals are dismissed.
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