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2023 (7) TMI 1016 - SC - Central Excise100% EOU - Misdeclaration of export goods - Method of valuation - Rule 10-A or Rule 7 of CER - rejection of declared value - redetermination of value - under the guise of clearing “Reject” the prime quality goods were exported and sold into DTA to avail the benefit of Notification No.2/95-CE dated 04.01.1995 - demand alongwith penalty u/r 209A - Extended period of limitation - HELD THAT:- In the present case the appellants sold the prime quality goods mis-declaring the same as “Rejects” to the related company UIL and availed the benefit of concessional rate of duty under Notification No.2/95-CE. There are finding of facts recorded by all the authorities below that the appellants mis-declared the goods and sold prime quality goods as rejects and availed the benefit of concessional rate of duty illegally and fraudulently and by misdeclaration the authorities were justified in invoking the extended period of limitation. Therefore, the submission on behalf of the appellants that the authorities were not justified in invoking the extended period of limitation has no substance. It is required to be noted that it was the appellants who got the approval to sell the goods, sold the goods may be at the relevant time the permission was to sell the goods shown as “rejects”. However, thereafter it was found that the permission to import was obtained fraudulently by mis-declaring the same as “rejects” though the goods were of prime quality. Therefore, thereafter the appellants cannot be permitted to say that though the permission was to import the goods declared as rejects, subsequently it was found to be prime quality, there was no approval under proviso to Section 3(1). The appellant cannot be permitted to take the benefit of his own wrong and/or fraud committed by it. Once there was an approval/permission to import the goods it is sufficient to attract proviso to Section 3(1) of the Act - the submission on behalf of the appellants that in absence of any approval and/or permission proviso to Section 3(1) shall not be applicable has also no substance and has to be rejected. Valuation of goods - HELD THAT:- It is required to be noted that the appellants sold the goods of prime quality mis-declaring the same as “rejects” and the same was sold to the related company UIL. It has been found that the UIL sold the goods at a higher rate. Therefore, the valuation ordered to be done under Rule 7 on the basis of the same cannot be said to be arbitrary and/or illegal. Cogent reasons have been assigned by the Tribunal while considering the submission on valuation. Thus, no error has been committed by the Tribunal in rejecting the appeals preferred by the appellants - appeal dismissed.
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