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TMI Blog2010 (11) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... o Carburetor Parts, New Delhi, a distributor who allegedly supplied steel pegs exported by M/s. Veeyem Exports. Statements were recorded from manufacturers of the steel pegs including the one who supplied to M/s. Siko Carburetor Parts. DRI which investigated the case obtained a report letter No. 08/152-334/2003 dated 22-10-2003 from the Senior Manager of Dubai Cargo Village & Airport Free Zone Customs informing Consul (Economic), Consulate General of India, Dubai stating that the total value declared to Dubai Customs for the clearance of the consignments received from M/s. Veeyem Exports under 10 Airway Bills came to 17221 US $. At the prevalent exchange rate this worked out to Rs. 8,21,442/-. Prototype of the steel pegs exported was recovered from Shri P.M. Musthafa. Information gathered at the importer's end revealed that the importer had declared US $ 1476 as the value of consignments covered by Airway Bill No. 1573262103 and 3 Shipping Bills No. 106902, 904 and 905. This amount worked out to Rs. 70,405/- at the relevant exchange rate of Rs. 47.70 per US $. The exporter had instead declared an amount of Rs. 2,96,86,834/-. The pro-rata value paid by the importer in respect of Shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g grounds : In the Order-in-Original the Commissioner did not give proper consideration to the Senior Manager of Dubai Cargo Village & Airport Free Zone Customs' letter Customs 08/152-334/2003 dated 22-10-2003 received through the Consul (Economic), Consulate General of India, Dubai. As per this letter, the total value declared to Dubai Customs for the clearance of the consignments received from M/s. Veeyem Exports vide ten Airway Bills came to 17221 US$ (in terms of Indian Rupees, this was only Rs. 8,21,442/- @ Rs. 47.70 per US$) for which the DEPB benefit due would have been only Rs. 1,06,767/-. The Commissioner also did not consider the act of omission of exporter in not providing information about the source of procurement of the steel pegs or to produce any documents in support of the declared export value on the plea that any such disclosure would benefit their competitors in the field and would adversely affect his business interest. The investigating authority had conducted detailed enquiries regarding the value of the item from different manufacturers of the item at Delhi and other places. The value of the steel peg was found to be Rs. 2.55/- per piece whereas the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants submit that this finding applied only for Shipping Bill No. 1069903 dated 15-1-2002 and not to any other Shipping Bill. It is submitted that to arrive at the number of pegs exported based on the weight of a single piece of steel peg, even for this Shipping Bill was erroneous. It is submitted that the Commissioner worked out the number of the steel pegs exported as 4,23,528 numbers in respect of the steel pegs weighing 0.85 gm each and 79,55,562 in respect steel pegs weighing 0.45 gm each. Thus the total number of steel pegs exported was revised as 83,79,093. On the basis of the same calculation the number of steel pegs covered by the Shipping Bill No. 1069903 dated 15-1-2002 was arrived at 2,00,000 considering the unit weight as 0.45 gm. The unit price declared was Rs. 14.30. The total FOB value worked out to Rs. 28,56,000/- and admissible DEPB credit worked out to Rs. 3,71,280/- as against Rs. 7,85,345/-. 6.1 It is submitted that the Commissioner had adopted for the calculation, the weight of a sample produced by the exporter and another obtained from a manufacturer in Delhi. The Commissioner noted in the impugned order that there were two different types of peg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the spring inside the piece. In components where the drilling was less, the weight of the component would be less. Both for small and big pegs, this weight variation was inevitable. It was a universally accepted trade practice to invoice automobile parts and components in pieces and never by weight. As regards valuation of steel pegs, the larger pegs would cost less than the small ones in view of the lesser precision involved. 7. The impugned order demanded excess credit of Rs. 4,14,065/-availed and utilized by the exporter under Shipping Bill No. 1069903 dated 15-1-2002 with interest. This order was without jurisdiction and authority of law. The order did not mention the provisions of the Act, under which the alleged excess credit availed by the exporter was being recovered. Section 28 of the Act applied only to the cases where any duty had not been levied or had been short levied or erroneously refunded. DEPB credit allowed by the DGFT based on the EXIM Policy provisions could not be demanded under Section 28 ibid. Only the Licensing Authority could modify or alter the DEPB credit originally sanctioned. Customs authorities could not cancel or invalidate the DEPB credit grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /343/05 12. The challenge raised by the Revenue to the impugned order accepting the export price declared by the respondent in the various Shipping Bills is on the basis that the investigating authority had conducted detailed enquiries regarding the market value of the export product from different manufacturers in Delhi and other places and had arrived at a value of Rs. 2.55 per piece. The Commissioner had found that the value of Rs. 9.50 for larger peg and Rs. 14.30 for the small peg were appropriate. This finding was not proper or correct. In arriving at the above finding, the Commissioner had ignored the price declared by the importer abroad at Dubai for the impugned consignments. Based on the price declared by the importer the admissible DEPB credit would have been only Rs. 1,06,767/-. The Commissioner had ignored the failure on the part of the appellants to furnish information about the source of procurement of the steel pegs or to produce any documents in support of the declared export value on the plea that any such disclosure would benefit their competitors which would adversely affect the exporter's business interest. 13. From the records of the case, we obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he MRP of Rs. 21/- related to a single piece. Shri Pradeep Kumar Ghai also stated that he gave a discount up to 50%. The discounted price worked out to Rs. 8.40. He also found that in the price list of M/s. Siko Carburetor Parts furnished by the exporter, the price of float pins (item No. 734) was shown as Rs. 15/-. Therefore, the price between Rs. 9/- and Rs. 14/- declared by the respondent exporter was acceptable. Shri Krishna Lal Arora did not appear for cross examination sought by the respondent. Therefore, his evidence was liable to be discarded. Moreover, he was a manufacturer based in Delhi. The exporter based in Kochi would incur considerable expenditure in procuring the item from Delhi. Therefore, the Commissioner found that the price would be between Rs. 5/- to Rs. 8/-. The third witness Shri Imran Hafeez also failed to appear for cross examination sought by the respondent. He had stated that his sale price was Rs. 2.50 to Rs. 3/-. This evidence could not be tested in cross examination and was therefore, liable to be rejected. Yet another witness, Shri J.S. Rachchh, Proprietor of M/s. Nimesh Metals, Jamnagar stated that they were yet to manufacture float pins; they planne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd seller was established nor any evidence found to prove that price was not the sole consideration for sale. The respondents had already realized the full foreign exchange remittance back through proper legal channel. As per the export documents, namely BRCs submitted by the exporter, 14,95,152 US$ had been realized. The Commissioner found no legal reason to reject the price declared and found that the export price ranging from Rs. 9.50 for larger pegs and Rs. 14.30 for smaller pegs were reasonable and fair and refused to interfere with the valuation adopted. We observe that the investigating authority could not produce conclusive evidence to establish that the impugned items were sold at Rs. 2.55. Market enquiry showed prices higher than those declared. Commissioner could not have rejected the price declared with justification. He gave reasons why the import price ascertained could not be accepted. We find that the order of the Commissioner challenged is inherently sound and deserves to be upheld. We uphold the same. 17. As regards the case laws relied on by the ld. SDR, we find that in Deep International case (supra), the Tribunal upheld the reduction of the declared value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bai)] (v) Polynova Chemical Industries v. C. Customs, Mumbai [2005 (179) E.L.T. 173] (vi) M/s. Dear Impex v. C.C., Mumbai [2004 IOL 320 CESTAT MUM] = 2004 (175) E.L.T. 611 (Tri. - Mumbai). There is also merit in the submission by the appellants that there are no machinery provisions in the Act to recover DEPB credit granted to an exporter by the DGFT. Therefore, we set aside the demand of DEPB credit of Rs. 4,14,065/-. 19. As regards penalty of Rs. 10,00,000/- imposed on the appellants, we find that the Commissioner worked out the number of pieces exported in 35 impugned consignments by dividing the total weight of the goods by the weight a steel peg having lower of the two weights namely 0.45 gms and 0.85 gms. The total weight of the consignments was 3940 Kg. The CHA who handled the impugned exports for the appellants and the cargo executive of the said firm denied that an exporter could under declare the weight in the Shipping Bills. This was for the reason that Carrier Airlines and other agencies like Kerala State Industrial Enterprises (KSIE) routinely physically weighed consignments for collecting terminal charges and freight charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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