Home Case Index All Cases Customs Customs + AT Customs - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 1072 - AT - CustomsDEPB benefit - Misdeclaration of value - Appellant exported Drop Forged Combination Pliers Chrome Plated with Heavy Red Transparent Sleeve under DEPB scheme but revenue after examination, doubts about the eligibility of goods for DEPB and allowed the export on provisional basis under DEPB. After clearance of the goods it appeared that the FOB as well as PMV of the goods has been inflated and department rejected the declared FOB price because the price at which the appellant purchased the goods from a proprietorship concern is much higher than the price at which the pliers from local artisans were purchased and therefore, restrict the DEPB benefit to 16% - Held that: as per the decision of the Tribunal in the case of Kanak Metal Industries, the exporter is not bound to fix the FOB value at prevailing market price and is free to sell the goods at profits. Thus, the FOB price need not be equal to the prevailing market price of the goods, so long as it conforms to the provisions of Section 14 of the Customs Act, 1962 and DEPB benefit is to be given with reference to the FOB value. So, when there is nothing wrong with the declared FOB value of the goods exported, the DEPB benefit can not be restricted to 16% of the PMV. Moreover, there is a built in the foreign trade policy to discourage the inflation of the FOB to claim the higher DEPB benefit. This mechanism is in the form of restriction in the policy that in the case where the DEPB benefit is available at the rate of 10% or more, the total DEPB benefit available to the exporter shall not exceed 50% of the PMV of the goods. Therefore, as the DEPB benefit claimed by the appellant is much less than 50% of the prevailing market value determined by the Commissioner, the DEPB benefit to the appellant can not be restricted to 16% of the PMV. - Decided in favour of appellant with consequential relief
|