TMI Blog2011 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 (210) E.L.T. 539 (Tri. - Del.)] delivered by the Customs, Excise Service Tax Appellate Tribunal (for short the CESTAT ) whereby it allowed the appeal preferred by the revenue, the respondent herein. Consequently, the customs duty drawback (Rs. 49,75,536/-) claimed by the appellant under the scheme of duty drawback, incorporated in Chapter X of the Act, read with Customs and Central Excise Duties Drawback Rules, 1995 (as amended) got disallowed on the ground of misdeclaration of value of the goods entered for exportation. 2. The facts, material for adjudication of the present appeal, may be stated thus : The appellant viz. M/s. Siddachalam Exports Pvt. Ltd., (hereinafter referred to as the exporter ) was engaged in the exports of ready-made garments, engineering goods, handicrafts, woollen garments, leather goods, etc. On 24th February, 2003, the exporter filed seven shipping Bills (Nos. J- 903000127-129 and J-903000131-134) for export of goods declared as ladies tops valued at Rs. 390/- per piece and denim shirts valued at Rs. 417/- per piece consigned to one M/s. Zao Jainyo Overseas, Moscow, Russia at a total FOB value of Rs. 4,14,63,360/-. The exporter claimed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause as to why the drawback on goods covered under shipping Bills No. J903000134 and J903000129 dated 24th February, 2003 should not be reduced to Rs. 3,56,328/-; drawback amounting to Rs. 29,90,280/- on goods covered under the remaining shipping bills should not be disallowed, and penalty under Section 114 of the Act should not be imposed on the exporter. 7. On 7th December, 2004, the said Pankaj, authorised signatory of M/s. Skipper International submitted another letter to the Commissioner (Adjudication Bench) stating that their earlier letter dated 12th March, 2003 should not be relied upon for any purpose inasmuch as the same was prepared by the Customs authorities, and he was merely asked to transcribe his signature on the same. It was further stated that he was neither shown any goods nor any documents. 8. On 14th December, 2004, the exporter replied to the show cause notice denying all the allegations contained therein. The exporter also questioned the authenticity of the report dated 12th March, 2003 submitted by M/s. Skipper International. 9. The Commissioner of Central Excise, Delhi-III adjudicated on said show cause notice vide Order-in-Original dated 31st J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that M/s. Skipper International reached the conclusion that the garments were export rejects . The valuation was also on that basis. Instead of contesting the factual position noted about the samples, the exporter has chosen to attack the competence of the opinion giver. This is not acceptable for two reasons. The first is that the quality of stitching and fabric would be evident to any one familiar with garment trade and cannot be ruled to be beyond the ken of an export surplus dealer. There is no rocket science involved in as certainly quality of fabric or stitching of a garment. Therefore, the attack on the opinion giver is entirely misplaced. It is also because the opinion itself is not flawed. Secondly, M/s. Skipper International was dealing in (sic.) export surplus garments, therefore, it had expertise in the market valuation of such goods. If fabric and stitching are of poor quality, certainly, the items would not be having the price of prime quality export garments as declared by the exporter. 10. Another entirely unacceptable aspect in the appellant s conduct is that it has refused to place on record the material which it should be in possession of to substantiate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel asserted that the procedure for determining value of goods has to be in terms of Sections 2(41) and 14 of the Act, read with Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (for short the 1988 Rules ). Relying on Varsha Plastics Private Limited Anr. v. Union of India Ors - (2009) 3 SCC 365 = 2009 (235) E.L.T. 193 (S.C.), learned counsel argued that the 1988 Rules having been framed to maintain uniformity and certainty in the matter of valuation of goods, which is a matter of procedure, these Rules have to be adhered to strictly. It was also contended that the CESTAT has erred in law in levying penalty on Mr. Sanjeev Jain who was not even made a party to the appeal filed by the Revenue. 13. Per contra, Ms. Rashmi Malhotra, learned counsel appearing on behalf of the Revenue strenuously urged that the impugned judgment deserves to be affirmed, and the CESTAT rightly did not consider the effect of retraction by M/s. Skipper International, as the same was not dealt with by the Commissioner as well. Learned counsel urged that the exporter cannot be allowed to urge this ground at this stage, as the same was not raised by it befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Revenue. Therefore, once the transaction value under Rule 4 is rejected, the value must be determined by sequentially proceeding through Rules 5 to 8 of the 1988 Rules. (See : Commissioner of Customs (Gen), Mumbai v. Abdulla Koyloth - JT 2010 (12) SC 267 = 2010 (259) E.L.T. 481 (S.C.).). 17. In Om Prakash Bhatia v. Commissioner of Customs, Delhi - (2003) 6 SCC 161 = 2003 (155) E.L.T. 423 (S.C.), while dealing with a similar case of fraudulent drawback claim by deliberately over-invoicing ready-made garments, this Court rejected the plea of the exporter that Section 113(d) of the Act was not applicable to the facts of that case as the goods were not prohibited goods; (ii) the exporter was required to declare the value of the goods expected to be received from the overseas purchaser and not the market value of such goods in India and (iii) since in that case, no duty was payable on the export, Section 14 of the Act could not be applied to determine the value of the goods. It was, inter alia, held that the definition of prohibited goods in Section 2(33) of the Act indicates that if the conditions prescribed for import or export of the goods are not complied with, it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of contemporaneous exports of identical goods, the Revenue erroneously resorted to a market enquiry. If for any reason, data of contemporaneous exports of identical goods was not available, the procedure laid down in Rules 5 to 8 of the 1988 Rules was required to be followed and market enquiry could be conducted only as a last resort. It is evident that no such exercise was undertaken by the Commissioner and interestingly he, acting as an appellate authority, proceeded to test the evidentiary value of the report submitted by M/s. Skipper International and rejected it on the ground that it does not depict if the identical garments had ever been purchased by the said concern. Observing that in the absence of any other independent evidence relating to market enquiry, there was no other corroborating evidence to support the allegation of inflation in FOB value, he dropped the proceedings initiated vide show cause notice dated 11th September 2003. Similarly, it is manifest from the CESTAT s order that revenue s appeal has been accepted mainly on the ground that report of M/s. Skipper International was worthy of credence and the exporter had failed to produce any evidence to est ..... X X X X Extracts X X X X X X X X Extracts X X X X
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