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2020 (11) TMI 546 - CESTAT NEW DELHIOvervaluation of export goods - mis-match in the quantity declared in the invoice and the quantity actually found in the shipping bill - claiming undue export benefits and excess duty drawback - Seizure of goods - Confiscation - HELD THAT:- The exporter of any goods shall make entry thereof by presenting electronically on the customs automated system to the proper officer a shipping bill and while presenting the shipping bill, the exporter has to make and subscribe to a declaration as to the truth of its contents. The exporter has also to ensure that the information given therein is accurate and complete. The exporter has also to ensure about the authenticity and validity of any document supporting it and compliance with the restriction or prohibition, if any, relating to the goods under the Customs Act or under any other law for the time being in force. It is only where the proper officer is satisfied that the goods entered for export are not prohibited goods and the exporter has paid duty, that the proper officer may make an order permitting clearance and loading of the goods for exportation. In the present case, the proper officer seized the goods as he had reason to believe that the goods were liable to confiscation under the provisions of the Customs Act for the reason that the goods entered for exportation did not correspond with what was mentioned in the shipping bills. These facts have been stated in the seizure memo dated June 3, 2020. In the instant case, the shipping bills are dated May 23, 2020. The panchnama recovery memo dated June 3, 2020 refers to the earlier panchnama proceedings June 1, 2020, wherein a shortage of 1872 pieces was detected and samples of the export product were also taken for conducting a market enquiry and obtaining opinion of traders/ dealers of such type of garments. There is no illegality in conducting a local market survey to gather the valuation of the goods for the purpose of exercising power under section 110(1) of the Customs Act. The panchnama proceedings dated June 3, 2020 record that there was a shortage of 1872 pieces and the export goods were also grossly overvalued. The value declared and the average price arrived at on the basis of the opinion of the three dealers were also indicated in the panchnama. There is on record a separate inventory cum seizure memo dated June 3, 2020 bearing case number 01/2020-21, which contains the inventory of the goods seized and also gives reasons for seizure of the goods. Once the officer had detected shortage of export goods and the market survey revealed that the goods were grossly overvalued, it cannot be said that the proper officer did not have ‘reason to believe’ that the goods were liable to confiscation under the provisions of section 113(i) of the Customs Act. Whether they are actually confiscated or not is a matter that can be determined only in accordance with the procedure prescribed under section 124 of the Customs Act by issuing a show cause notice to the exporter and also giving him a reasonable opportunity of making a representation in writing. All that was required to be considered for exercising power under section 110 (1) of the Customs Act was whether there was a reason to believe that the goods are liable to confiscation. At what stage the provisions of section 14 of the Customs Act and the provisions of rule 3 of the Export Valuation Rules have to be applied? - HELD THAT:- Section 110(1) of the Customs Act empowers the proper officer to seize the goods if he has reason to believe that goods are liable to confiscation. As noticed above, the goods attempted to be improperly exported are confiscated under section 113 of the Customs Act after providing an opportunity as contemplated under section 124 of the Customs Act. It is at that stage that it is determined whether the goods entered for exportation actually correspond in respect of value or in any material particular with the entry made in the shipping bill. The Commissioner (Appeals) completely failed to appreciate the provisions of section 110(1) of the Customs Act and proceeded to examine the matter as if he was examining an order of confiscation under section 113(i) of the Customs Act and not an order of seizure of goods under section 110(1) of the Customs Act, where the proper officer should only have reason to believe that the goods are liable to confiscation. Thus, for both the issues relating to the valuation of the goods or shortage of 1872 pieces mentioned in the seizure memo, the exporter will get ample opportunity to put forth his case when proceedings are initiated under section 124 of the Customs Act and it is neither possible nor permissible at the stage of seizure to determine this issue. Appeal allowed - decided in favor of appellant.
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