TMI Blog2011 (2) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... athered clearly show that he was the mastermind behind the whole operation - Therefore penalty has been rightly imposed on him - But once again, the penalty has to be proportionate to the offence committed and the fact that FOB value has been realized and the exact quantum of financial benefit that would have been derived has not been brought on record would result in a situation where have to take into account the value of the fabrics declared and determine the penalty on that basis - Another factor that is required to be taken into account is that penalty has also been imposed on SCPL. Further penalty on SCPL also is required to be considered in relation to the value of the goods and the benefits - Having regard to the facts and circumstances, the nature of offence and the fact that unit is located in SEZ etc. consider it appropriate that reduction in fine penalty etc. is warranted. As regards Shri Shyamsunder Satyal, as submitted he was only an employee and no evidence has been brought out to show that he was part of the operation and had deliberately involved himself - The facts brought out show that he was only performing functions which an employee would perform - Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were drawn and sent to chemical examiner. Further, a market survey was carried out with three leading shops having reasonable experience of dealing with fabrics and the results of market certificate are as under: Sl. No. Entity/Shop Ladies Nightwear Ladies Jacket Ladies T-Shirt Gents Bermuda 1. M/s. Shiv Dresses, Shop No.N-119-120, Gandhidham. Rs.40.00 Rs.45.00 Rs.30.00 Rs.20.00 2. M/s. Kunal Store, S-57 121, Main Bazar, Gandhidham. Rs.45.00 Rs.40.00 Rs.35.00 Rs.25.00 3. M/s. Rituka, Shop No.103, Vachli Line, Gandhidham. Rs.35.00 Rs.50.00 Rs.35.00 Rs.25.00 4. Subsequently goods were released provisionally and the same have been exported by SCPL. Shri ST Arora, authorised signatory of ST the supplier of garments, SCPL in his statement stated that he was responsible for the entire affairs of ST and SCPL. There was no contract between ST and SCPL; ST purchased grey fabrics from the market, got them processed by job workers and manufactured readymade garments and supplied to SCPL; SCPL had not claimed any benefit from the export made by it. The statements of three processors who had undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imer from ST; DEPB in lieu of drawback means that the amount of DEPB would not depend upon the export value but on the amount of duty paid by the local manufacturer of the exported goods; even if there is an overvaluation, DEPB credit is necessarily worked out only on PMV and not FOB value; the reliance on traders opinion to arrive at market value is wrong since all of them are stereo typed and identically worded and request for cross examination which has been denied. Out of the total three processing units only two stated that they had supplied processed fabrics of different quality and only one admitted inflation of value; further two processors were shown wrong samples and hence they had stated that they had not processed such goods; the Commissioner cannot question the value in view of the fact that those goods have been already assessed finally under central excise provisions; redemption fine could not have been imposed since the goods were not available for confiscation. Similarly no penalty could have been imposed since goods are not available for confiscation. No penalty could have been imposed on ST since they were not at fault. Shri Shyamsunder Satyal was only an employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Novelty Garments Hosiery, M/s. Kunal Store claims to be a specialist in handloom, hosiery, travel bags, jewellery, cosmetics and gift items and M/s. Rituka is a show room of garments. From this it is clear that all the three are dealers of garments and have the necessary expertise. Another point that goes against the appellants is the fact that Shri S.T. Arora in his statement had agreed with the price ascertained from the dealers. The statement of Shri S.T. Arora was recorded on 01.02.04 whereas the opinion of the three dealers was taken in March 2003. The statement was recorded after nearly ten months and even then Shri S.T. Arora had agreed with the price ascertained and this statement has not been retracted till date. Therefore the present market value ascertained by customs and relied upon by the Commissioner has to be upheld. 9. The learned advocate relied upon several decisions. In the case of Advance Exports reported in 2007 (218) ELT 39 there was no market survey conducted to ascertain present market value and there was no acceptance of the same by the exporter. Therefore this decision would not help the appellants. In the case of Vishal Exports Overseas Ltd. report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at intention was to claim DEPB/Drawback benefit. From the facts of the case it can be seen that Shri S.T. Arora was in-charge of ST as well as SCPL and the planning to inflate the value started from the stage of supply of grey fabrics to the job workers by ST as evidenced by the facts of the case. It is a well planned operation and for whatever reasons it appears, ST was to claim the benefit as it emerges from the records. Therefore the claim of the appellants that there was no intention of getting any benefit and by inflating the value, there was no benefit available to them is not emerging from the facts of the case. This factor is relevant only for the purpose of determination of quantum of fine or penalty since as observed by the learned Commissioner, after the amendment of Section 113(i) w.e.f. 14.05.03 goods which did not correspond in respect of value are liable to confiscation. We have already held above that the PMV was inflated. From the records it is also clear that ST and SCPL joined together and inflated the value in the ARE-4 only and also in the shipping bill. At this stage it becomes relevant that ST and SCPL are sister concerns and are related to each other. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as available to the appellants because of inflation of value has not been discussed anywhere nor the appellants have chosen to indicate it. Having regard to all these facts and circumstances, there is a need to reduce the redemption fine. 15. As regards penalty on Shri S.T. Aorora, the facts of the case and the evidences gathered clearly show that he was the mastermind behind the whole operation. Therefore penalty has been rightly imposed on him. But once again, the penalty has to be proportionate to the offence committed and the fact that FOB value has been realized and the exact quantum of financial benefit that would have been derived has not been brought on record would result in a situation where we have to take into account the value of the fabrics declared and determine the penalty on that basis. Another factor that is required to be taken into account is that penalty has also been imposed on SCPL. Further penalty on SCPL also is required to be considered in relation to the value of the goods and the benefits. Having regard to the facts and circumstances, the nature of offence and the fact that unit is located in SEZ etc. we consider it appropriate that reduction in fine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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