2000 (11) TMI 684 - AT - Central Excise

Summary

Issues:
- Determination of FOB value for export goods under DEEC Scheme
- Alleged misdeclaration of export value
- Applicability of Customs Act and Foreign Trade regulations
- Challenge to the Commissioner's valuation decision
- Compliance with Customs Act Section 14 and Valuation Rules

Analysis:

1. Determination of FOB value for export goods under DEEC Scheme:
The appeal concerned the FOB value determination of garbage bags made of E.V.A. exported under the DEEC Scheme. The Customs initially allowed the export subject to further investigation due to suspicions of overvaluation. The Commissioner fixed the FOB value at Rs. 1,38,03,162/-, lower than the declared value of Rs. 1,70,50,300/-, based on inquiries with manufacturers and considerations of expenses and profit margins.

2. Alleged misdeclaration of export value:
The Customs alleged misdeclaration in the Shipping Bills regarding the value of the exported goods, contravening Customs Act Section 50, Export Control Order, and Foreign Trade Act. The Commissioner found an overvaluation of approximately Rs. 30 lakhs, seemingly for duty-free clearance incentives under the Value Based Advance Licensing Scheme. Despite the overvaluation, no penalty was imposed as foreign exchange for the full value was realized.

3. Applicability of Customs Act and Foreign Trade regulations:
The Customs Act, Export Control Order, and Foreign Trade Act were invoked to address the alleged contravention by the exporter. The Commissioner's decision was based on these legal provisions to determine the correct FOB value and restrict DEEC Scheme benefits accordingly.

4. Challenge to the Commissioner's valuation decision:
The appellant challenged the Commissioner's valuation decision as arbitrary, arguing for a higher value based on cost factors like rejection rate, packing, transportation charges, and profit margins. However, the Tribunal found the Commissioner's valuation method reasonable, considering expenses and profit margins, and upheld the decision based on the lack of documentary evidence supporting the appellant's claims.

5. Compliance with Customs Act Section 14 and Valuation Rules:
The appellant contended that the Customs authorities' valuation did not comply with Section 14 of the Customs Act and Valuation Rules. However, the Tribunal clarified that Section 14 does not apply to export goods, thus rejecting the argument and affirming the Commissioner's valuation decision as valid under the circumstances.

In conclusion, the Tribunal rejected the appeal, upholding the Commissioner's decision on the FOB value of the exported goods under the DEEC Scheme. The judgment emphasized the importance of proper valuation methods, compliance with relevant legal provisions, and the need for supporting evidence in challenging valuation decisions under export schemes.