TMI Blog2023 (5) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue that the appellant have returned any remittance received on account of exports to the buyer located in the foreign country. Further, Revenue have not brought on record any evidence of diversion of goods to any third country - Admittedly, the goods have been exported by air from India to Russia and thus, chances to diversion to third country is highly impossible, without the goods first reaching Russia. The impugned order is set aside - appeal allowed. - Customs Appeal No. 50021 of 2023 ( SM ) - FINAL ORDER NO. 50704 / 2023 - Dated:- 25-5-2023 - HON BLE MR. ANIL CHOUDHARY , MEMBER ( JUDICIAL ) Ms. Seema Jain , Advocate for the appellant Mr. Mahesh Bhardwaj , Authorised Representative for the respondent ORDER Anil Choudhary : This appeal has been filed by the exporter, Arihant Overseas confirming the demand of duty draw back of Rs.35,37,385/- and further ordering confiscation of the goods already exported under draw back, under Section 113 (i) of the Customs Act and imposition of penalty of Rs.30 lakhs under Section 114 (iii) of the Act. 2. The brief facts are that the appellant was in the business of readymade garments and fabrics. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the course of investigation further statement of Mr. Raj Kumar Jain, Proprietor of M/s. Arihant Overseas was recorded on 05.04.2011, wherein, he, inter alia stated that he was in the business of trading in fabrics on wholesale basis and he took IEC code in the year 2000 for starting export business. Thereafter, he came in contact with the buyers situated in Russia on being introduced by some trade persons and thereafter he exported readymade garments to Russia. The goods were exported in Indian rupees, and were entitled to duty draw back incentives on those goods. After going through the copies of the shipping bills, he could identify the name of the buyers, to whom he had exported the goods. That he did not meet any consignee/buyer personally and deal was done through the contracts of trade people. That value of the goods exported by him during December, 2000 to June, 2002 was Rs.2,93,42,875/- and the draw back amount claimed was Rs.42,41,332/-. Besides this, he did not export anying. On being confronted with the documents received from Russia by DRI, wherein it had been revealed that Indian exporter had returned the money, back to the buyers in Russia, and in case of M/s.Ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not done any export import business with Indian companies during the period 2000 2005. One of the consignees/buyers, M/s.OOO Sters had imported only black tea in granules. Even in that case, exporters were different. 8. The show cause notice refers to RBI Circular No.30 dated 28.09.1993 and Circular No.4 dated 05.09.1999, which stipulates that:- Funds from repayments of State Credits to be utilized for export of goods to Russian Federation only. No third country exports are to be permitted to be financed out of funds from such repayment of state credits. As per paragraph 5 of AP (DIR series) Circular No. 12 dated 09.09.2000 issued by RBI under Section 10 (4 ) and section 11 (1) of Foreign Exchange Management Act, 1999 (42 of 1999) provides Asian export of goods and services against repayment of State Credits granted by erstwhile Soviet Union will continue to be governed by the extant directions, as amended from time to time. Para 4.17 of Export Import Policy 1997 2002 reads as under; In the case of trade with Russia under the Debt Repayment Agreement, the Director General of Foreign Trade may issue, from time to time, such instructions or fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for export before the Indian Customs, have not reached Russia at all. Thus, DGFT s Circular No. 13/95 dated 3rd July,1995 has also been violated leading to contravention of Section 11 (1) of Foreign Trade (Development and Regulation) Act 1992 read with the provisions of para-4.17 of the Exim Policy, 1997 2002 and para-2.15 of Exim Policy 2002 2007. Thus, when read with Section 3(2) and 3(3) of Foreign Trade (Development and Regulation) Act, 1992 makes such exports a violation of Section 11 of the Customs Act, 1962 as well. 11. It also appeared that appellant have wilfully misstated the particulars declared in the shipping bills with intent to fraudulently avail the benefit of drawback. It further appeared that particulars to the consignee in Russia, the destination of the exported cargo, the quantity and value of the goods allegedly exported have all been stated incorrectly in view of the discussion herein above. It further appeared that the goods ostensibly exported by the Appellant are liable for confiscation under Section under 113 (i) read with Section 113 (d) of the Customs Act, 1962. It further appeared that the goods allegedly exported did not reach the declared co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded; that Rule 16 cannot be brought into play to demand drawback on this ground. The appellant cited the case law of Famina Knit Vs. UOI [2020 (371) ELT 97 (P H)]. 14.4 That the Assistant Commissioner (Preventive) Customs (Preventive) Commissionerate, New Customs House, New Delhi vide letter dated 27.02.2003 informed the Branch Manager, Punjab National Bank, that the appellant is found to be a genuine exporter, that therefore, there is no dispute regarding the export of goods by the appellant. 14.5 That on investigation by the Department regarding the genuineness of BRCs, Punjab National Bank vide letter dated 08.02.2012 confirmed the genuineness of the BRCs in question. 14.6 That RBI after due verification of the letter of Credit issued by Russian Federation Bank, released the drawback to the appellant; that the RBI Circular No.30 dated 28.09.1993 cited by the Adjudicating Authority states that funds from repayments of State Credits are to be utilized for export of goods to Russian Federation only; that no third country exports are permitted to be financed out of funds from such repayments of State Credits; that LC s were issued in the favour of the appellant and only aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment failed to discharge its burden. The appellant relied on case laws of Uniworth Textiles Ltd. Vs. CCE, Raipur [2013(288) ELT 161 (SC) and in Ashok Kumar Ors. [(2005) 8 SCC 760]. 14.11 That the department conducted enquiries of imports of consignees; that in two shipping bills (7969901 6011186) buyers are different from the consignees; that there is no enquiry in respect of buyer; that, therefore, demand of drawback of Rs.9,90,000/- in respect of these two bills of entry, is illegal and unsustainable. 14.12 That alleged return of money was to one company only and that too restricted to Rs. Ninety Six lakhs only; that remaining drawback can not be denied. 14.13 That the show cause notice has been issued fourteen years after the exports and sanction of drawback; that case law of CCE, Jaipur Vs. Raghuvar India Ltd. [2000(18) ELT 311 (SC)] is of no help to the Revenue; that the show cause notice is beyond reasonable period and ought to be dropped on this ground alone. The appellant cited the case laws of State of Punjab Vs. Bhatinda District Co op Milk P. Union Ltd. [2007 (217) ELT 325 (SC)]. Pratibha Syntex Ltd. Vs. Union of India [2013(287) ELT 290 (Guj.)] and Padmin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs.6,93,947/- has been dropped by the Adjudicating Authority with respect to the goods exported to (i) Anna Phuui, Poland and (ii) Veera International, Russia. The amount of duty draw back is based on vague information received by the Customs Department, which have got no legs to stand. Further, under the facts and circumstances, there is no violations of the provisions of the Customs Act read with the Duty Draw Back Rules. Evidently, no enquiry has been made from the actual importers or the persons importers, who are named in the bills of lading, shipping bill, etc. A buyer or importer situated in a foreign country is entitled to sell the goods in transit, which is commonly known in trade parlance as high-sea sales. In such case, the buyer or transferee of the goods takes the delivery of the goods by filing bill of entry and not the person, who is named in the shipping bill or bill of lading. Admittedly, there is no evidence that the appellant have returned Rs.96 lakhs to M/s. OOO Stroytehinter, Russia, as alleged by the Revenue. Accordingly, she prays for allowing the appeal with consequential benefits. 17. Ld. Authorised Representative, Shri Mahesh Bhardwaj relies on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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