TaxTMI 
TaxTMI 
2007 (11) TMI 271
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 114(i) and Section 114(iii) of the Customs Act, 1962. The appellants had declared the value in respect of all the shipping bills amounting to Rs. 1,33,96,883/-. The findings recorded by the Commissioner from Paragraph 23 are reproduced herein below. FINDINGS 23. M/s. Siddharth Exports have not bothered to reply to the Show Cause Notice. 24. Intimations were sent to M/s. Siddharth Exports for personal hearing on 8-7-2005, 18-7-2005, 2-8-2005 and 10-10-2005. Intimation was also got served through the jurisdictional Central Excise authorities. However, the exporter did not co-operate with the adjudication proceedings and chose not to appear before the adjudicating authority. 25. I have gone through the records of the case and the submissions made by the noticee in their written reply. This is a case of Export of 100% Poly & Poly Dyed and Printed fabrics by M/s. Siddharth Exports, Surat under DEPE Scheme post export basis. M/s. Siddharth Exports had filed three Shipping bills for export of 2,40,000 Yards (2,19,456 Metres) of Poly Poly Fabrics with a declared FOB value of Rs. 1,33,96,883/- and the DEPB amount involved was Rs. 14,73,657/-. DEPB credit at the rate of 11% under Sl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontent of the export product. The neutralization shall be provided by way of grant of duty credit against the export product. From time to time, on the issue of entitlement of DEPB credit vis-a-vis the FOB/PMV has been considered and clarified by the Central Board of Excise and Customs, as in many cases the PMV was found to be much lower than the declared FOB value. Vide Para 5 of circular No. 77/2002-Cus. dated 27-11-2002, the CBEC had clarified that "In those cases where it is conclusively proved through the investigations that the FOB value has been artificially inflated/manipulated by the exporter to avail of unintended higher DEPB benefits, the DEPB credit entitlement shall be worked out only on the PMV and not FOB value" 29. Circular No. 69/97-Cus., dated 8-12-97, issued in F.No. 605/51/97-DBK circulating revised guidelines for determination/verification of the PMV under DEPB Scheme at para 2 states as follows: Object of limiting the amount of credit based on the Present Market Value (PMV) The condition of restricting the credit amount under DEPB Scheme to 50% of the PMV was prescribed to prevent the exporters from obtaining excessive amount of credit by inflating ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctive of the market price of the goods, and thereto highest of the general value is proposed for determination of assessable value for DEPB purpose. 32. As regards the statement given by Shri Kamal Kishore Kapuria at the time of investigation and the documents submitted in justification of the high value of the fabrics, I find that the goods at the point of export at Custom House was inspected and samples were drawn which were subjected to test/value verification. The goods were found to be of low quality fabrics not used in apparel manufacture but fit for other miscellaneous uses. The show cause notice discussed that the goods tendered for export were not representative of the ARE-1 forms submitted with respect to the weight ascertained based on GSM and quality of samples drawn from the consignments. Hence the purchase bills submitted in this case also cannot be accepted as belonging to the exported goods in question. This fact coupled with the value stated by the persons in the trade clearly indicate that the actual value of the goods would be at best Rs. 13/- per metre. 33. The Hon'ble Apex Court has held that value under Section 14 of the Customs Act, 1962 is applicable in ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... established. 37. On the basis of the above findings, I pass the following order; ORDER The goods covered under Shipping Bills No. 715 dated 28-3-2003, 1173342 and 1173343 both dated 17-2-2003 and having a total declared value of Rs. 1,33,96,883/- are liable for confiscation under Section 113(d) and 113(i) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. However, the goods are not available for confiscation, as already exported. I order the final assessment of the Shipping Bills above at a value of Rs. 16 per metre for DEPB purposes. Taking all aspects into consideration, I impose a penalty of Rs. 5,20,000/- (Rupees Five lakhs twenty thousand only) on M/s. Siddharth Exports, Surat, under Section 114(i) and Section 114(iii) of the Customs Act, 1962. 2. The learned Counsel argued at length on various aspects of the findings. He referred to the various grounds and contended that there was no overvaluation of the goods for DEPB purposes. He submits that the declared price is a correct price and they have not overvalued the goods as alleged. He submitted that they have received the export orders at the same price at which i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted. He submits that no benefit has been given even with regard to the penalty. He places a copy of the order. 4. The learned Counsel again reiterates his submissions. 5. We have carefully considered the submissions and have gone through the impugned order. The impugned order is a detailed order discussing the entire evidence on record. The manner in which the mis-declaration has been done and the conditions in which the goods had been packed in the containers has been revealed. As per the detailed investigations, the goods were in damaged condition and were of inferior quality. The investigations with manufacturers, processors and also market enquiries were done and it was found that the assessee had overvalued the goods for availing wrongful benefits. In an identical situation, the President's Bench in the case of M/s. Olympia Overseas dismissed the appeals by confirming the same findings. The Final Order Nos. 1123-1124/2007 dated 14-9-2007 [2008 (223) E.L.T. 114 (T)] and its findings are clearly applicable to the facts of the case. The findings recorded in Para 16 is reproduced herein below : 16. We have gone through the records of the case and the submissions urged by the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10% or more, the amount of credit against each such export product shall not exceed 50% of the Present Market Value (PMV) of the export product. The Government of India is very much conscious of the mis-use of the scheme and, therefore, the credit has also been restricted as mentioned above. We have also gone through the plethora of case laws furnished by the learned Departmental Representative. The Hon'ble Apex Court in the case of Om Prakash Bhatia v. CC, Delhi, 2003 (155) E.L.T. 423 (S.C.), has dealt with the over invoicing of export goods, it has been held that, when the importation or exportation, of the goods are subjected to certain prescribed conditions to be fulfilled either before or after clearance of the goods, and if those conditions are not fulfilled, the said goods would be considered as prohibited goods and Sections 2(23), 11 and 113(d) of the Customs Act, 1962 would come into play and the exporters would be liable for penalty. In the case of Abhishek Export v. CC, Cochin, 2007 (208) E.L.T. 155 (T.-Bang.), the Tribunal considered a case of over valuation of export goods to get higher DEPB credit. In that case, the confiscation of the impugned goods and penalty were ....