TMI Blog2019 (2) TMI 1506X X X X Extracts X X X X X X X X Extracts X X X X ..... ls), Mumbai-II, JNCH Nhava Sheva. 2. In the first Appeal i.e. of M/s. Rani Sati Exports. Two Bills were filed by the Appellant on 31.12.2009 for export of fabric, made out of Spun yarn from MM Fibre MM Filament yarm W/W embroidery W/W metalized yarn w 112 cm. to Dubai (UAE) under EPCG DEPB Schemes. The value of consignment declared as ₹ 58,71,275.90(FOB) and ₹ 54,43,779.50(FOB) respectively @ 1.48 USD per yard (C F). Net wt. of the consignments are 7275 kgs. and 6750 kgs and the DEPB benefit is ₹ 4,81,444.6/- and 4,46,389/- respectively. In the 2nd Appeal i.e. of P.D. Impex, also two bills were filed by the Appellant for export of fabric, made out of Spun yard and the export was at COTE D IVOIRE under EPCG DEBP Schemes. The value of the consignment was declared as ₹ 32,54,697.50(FOB) and ₹ 90,82,189.50 (FOB) respectively @ 1.05 EURO per yard (C F). Net Wt. of the consignments were 3697.50 kgs. 10222.50 kgs. respectively. The Appellants in both the Appeals have produced their respective Sales Contract signed by both the parties for these Shipping bills and submitted that the FOB value was declared as per the sales contract between the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly due to the reason that those case laws pertain to the period prior to the enactment of Customs Valuation (Determination of Value of Export Goods) Rules, 2007. 4. According to ld. counsel for the Appellants, the value of the goods under export should have been determined as per the provisions of Customs Valuation Rules, 2007 sequentially and not on the basis of local market survey and, therefore, procedure adopted for determination of export value of the goods is incorrect and this determination of value has to be held as unsustainable in law. He contended that the similar goods were earlier exported by the Appellants at prices comparable with prices declared in the impugned shipping bills, but the same was not relied upon by the authorities since according to them in absence of availability of any authentic samples of the goods exported earlier or any other evidence which could establish their comparability with the impugned goods, their export values cannot be a basis for valuation of the impugned exports. According to ld. counsel the value of the Appellants goods was not comparable with the goods exported by M/s. Provogue India Ltd. And M/s. Sadguru International due to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantity levels, (iii) difference in composition, quality and design between the goods to be assessed and the goods with which they are being compared, (iv) difference in domestic freight and insurance charges depending on the place of exportation. 5. Computed value method. If the value cannot be determined under rule 4, it shall be based on a computed value, which shall include the following:- (a) cost of production , manufacture or processing of export goods; (b) charges, if any, for the design or brand; (c) an amount towards profit. 6. Residual method. (1) Subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods. 7. Declaration by the exporter.- The exporter shall furnish a declaration relating to the value of export goods in the manner specified in this behalf. 8. Rejection of declared value.- (1) When the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the goods cannot be determined under the provisions of this rule, the value shall be determined by proceeding sequentially through Rules 4 to 6. Rule 4 deals with transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation and Rule 5 deals with computed value method which shall include cost of production, manufacture or processing of export goods; charges, if any, for the design or brand and an amount towards profit. Rule 6 makes it clear that if the value of exported goods cannot be determined under the provisions of Rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods. Explanation (1)(i) to Rule 8 ibid also makes it clear that where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 6. 6. In the instant matter, since the declared value appeared to the department to be on higher side, therefore market enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame variety and quality. From the records we find that goods exported by M/s. Provogue India Ltd and M/s. Sadguru International were not identical as the goods exported by the Appellants. This aspect was clearly demonstrated by the respective RICT codes which determine the description of the goods. In two cases of comparison the RICT code pertains to different chapter of the tariff for the goods. The goods of the Appellants figure in the input output norms at Sr. Nos J-37 while that of the compared value of M/s Provogue India Ltd figure at Sr no. J315(ii). The ld. Commissioner failed to consider these vital aspects, when he rejected the impugned transaction value based on the valuation produced by the department relating to the export made by M/s Provogue India Ltd. We are not able to understand when the department can compare the goods of the Appellant with the goods exported by M/s. Provogue India Ltd. or M/s. Satguru International merely on the basis of their export document, then they could not have rejected the value of the similar goods exported earlier by the Appellant to the same company, which was accepted by the department at that time of export. The said export document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable at the rate of 10% or more, the total DEPB benefit available to the exporter shall not exceed 50% of the PMV of the goods. 10. In another similar matter titled as Commr. of Customs, Mumbai vs. Vishal Exports Overseas Ltd.; 2007(209) ELT 331 (SC) the Hon ble Supreme Court has laid down as under:- 9. The first contention of the appellant herein to the effect that the FOB value being 450% more than the purchase value is unreasonable and cannot be accepted for the simple reason that there is no evidence on record to support such a contention. The Tribunal has also specifically held so and returned a final finding of fact that the FOB price was correctly shown by the assessee. Learned counsel for the appellant could not show us anything concrete in support of his contention. From the orders of the first and the appellate authorities nothing can be found to hold that the FOB price was excessive or not genuine. The Tribunal has also given a finding that the Adjudicating Authority has arbitrarily computed the FOB value and have fixed the credit on that basis. We accept findings of the Tribunal in the absence of any concrete evidence having been put to support the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted goods were overpriced. There was nothing on record to prove that there was business interest or relation between the Appellants and their importers in Dubai or COTE D IVOIRE in order to doubt that the transactions between them were not in the normal course of trade or that it was not a transaction at arms length. It is also not the case of the Revenue that it is either a Hawala transaction or a back flow of money to the Appellants through illegal means. The value declared by the Appellant was to be remitted through the banking channel. Unless it is established that the goods of market or goods of export, value of which department sought to apply, are absolutely identical to the goods of the Appellants, the value declared by the Appellants cannot be disputed. Therefore, the FOB declared by the Appellants deserves to be accepted. 13. These appeals are thus allowed with consequential relief, if any. (Dictated Pronounced in Court) (Sanjiv Srivastava) Member (Technical) (Ajay Sharma) Member (Judicial) I have gone through the order prepared by Learned Member (Judicial). Even after lot of persuasion I am not in position to agree with the same. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S No Bill No Date Name and Address of Shop Rate per Meter Rate per Yard 1 1251 21.01.2010 Navdeep Collection Dadar (E) Mumbai 30.00 27.00 2 Nil 21.01.2010 Ronak Textiles Hindmata Mumbai 32.00 28.80 3 1307 21.01.2010 Sandeep Textiles Dadar (E) Mumbai 35.00 31.50 1.7 Thus the average price of the fabric comes to ₹ 29/- (Rupees Twenty Nine only) or 0.45 EURO per yard approximately. The fabrics purchased from the market along with bills are put up in the file. 1.8 Further, a data of the export price for similar export of 4 shipments by 2 exporters exported from DRT CFS were taken which is as follows: S No S/B No Date Exporter Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of Export Goods) Rules, 2007 say that The value of the export goods should be based on transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation or in its absence another destination country importation adjusted in accordance with the provisions of sub-rule (2). In the present case and similar exports taken for comparison, time of export is similar and the country of destination if also similar being in African countries. Based on which export price of fabrics is compared with different other export consignments mentioned earlier. 3.3 Finally, in this assessment order Rule 6 of Customs Valuation (Determination of Value of Export Goods) Rules, 2007 has been followed which calls for determination through reasonable means consistent with the principles and general provisions of these rules. Accordingly, the value of fabrics in the consignment is re-determined at 0.45 EURO per yards based on market enquiry and is little above the export value of the manufacturers considering the facts and documents presented by the exporter. This value is substantially lower than the value originally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 5. Thus there has been sequential application of Rule 4 to 6. However if the case of appellant is that value should have been determined under Rule 4, the value should have been determined around 0.30 EURO instead of 0.45 EURO. 3.1 Observations made by Hon ble Andhra Pradesh High Court in case of Sarvani Impex Pvt Ltd [2010 (252) ELT 19 (AP)] takes note of all the circulars and decisions to hold as follows: 34. Circular No. 15/97-Cus., dated 3-6-1997, on which strong reliance is placed by Sri K.V. Satyanarayana, Learned Counsel for the petitioner, prescribes the guidelines for determination/verification of the Present Market Value (PMV) under the DEPB scheme. It refers to the earlier Circular No. 10/97 whereby detailed guidelines, for operation of the Duty Entitlement Pass-Book Scheme, were issued and notes that Circular No. 10/97 provided for exporters to declare, in the Shipping Bill, the Serial No. of the export products in the Public Notice issued by the DGFT, the rate claimed and for the correctness of this declaration to be verified while processing the Shipping Bill and at the time of examination of the goods. Under Circular No. 15 of 1997, while re-examining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Shekih Mohd. Omer v. Collector of Customs, Calcutta and Others [(1970) 2 SCC 728] wherein it was contended that the expression prohibition used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus:- What clause (d) of Section 111 says is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, or will within the prescribed period be, paid in the prescribed manner. 11. This Section contemplates that exporter is required to furnish to the prescribed authority in prescribed form declaration of true material particulars which include :- (a) the amount representing the full market export value of the goods; or in the alternative, (b) if the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market, and (c) the exporter has to affirm that full export value of goods will be received. 12. These two clauses of Section 18 leave no doubt that exporter is not concerned with the prevailing market price in India of the goods sought to be exported, but he is required to disclose true export value of goods. That is to say, exporter has to disclose full and true sale consideration - export value of the goods. The notification issued in exercise of the power under Section 18 also inter alia provides that Central Government prohibits the export of all goods unless exporter furnishes to the prescribed authority a declaration in the prescribed form of material par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale; for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and price is the sole consideration for the sale or offer for sale : Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50; (1A) Subject to the provisions of sub-section (1) the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. (2) Notwithstanding anything contained in sub-section (1) or sub-section (1A) if the Central Government is satisfied that it is necessary or expedient so to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported. 15. It is true that Section 50 of the Act inter alia provides that before exporting the goods the exporter shall make entry thereof by presenting to the proper officer in the case of goods to be exported, a shipping bill and a bill of export in prescribed form. The shipping Bill and Bill of Export (Form) Regulations, 1991 inter alia prescribes the said form. After that form is amended w.e.f. 15-6-2001, it is stated that exporter shall state Value - FOB/PMV where applicable . We are not required to deal with this aspect in this appeal as the goods were sought to be exported in the year 1998. 16. From the aforesaid provisions, mainly, Section 2(41) read with Section 14 of the Act and Section 18 of the Foreign Exchange Regulation Act, 1973, it is crystal clear that :- (a) Exporter has to declare full export value of the goods (sale consideration for the goods exported). (b) Exporter has to affirm that the full export value of the goods will be received in the prescribed manner. (c) If the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the goods than the market price prevailing in the country and therefore, merely because higher export value is mentioned, it cannot be inferred that it is not the true sale consideration. In some cases, this hypothetical contention may be right. However this would depend upon facts and circumstances as well as evidence on record in each case. If the goods are easily available in the market, then it would be difficult to arrive at the conclusion that a foreign buyer - a prudent businessman would pay ten times more than the prevailing market price of readymade clothes, particularly, in the days where information is easily available through internet or various other sources. In any case, when margin of profit appears, on the face of it, unreasonable, it is for the exporter to establish that it was true export value stated in the shipping bill. Section 14 itself contemplates that the price at which such or like goods are ordinarily sold or offered for sale in the course of international trade would be the value of the goods. 20. In Toolsidass Jewraj v. Additional Collector of Customs Others [(1991) 2 SCC 443], full export value of the goods was not correctly stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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