TMI Blog2024 (3) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... FOB value, is correct? HELD THAT:- Gold has been supplied by DIL by way of replenishment and there is no allegation that matching quantum of gold has not been exported as required under Notification No. 57/2000-Cus. In the said Notification, in the second proviso, it clearly provides that Nominated Agency supplying gold to the exporter is liable only for difference (shortage) between the quantity issued and that contained in the exported jewellery or articles. We further find that the value addition norm was required to be checked by the proper officer of customs on presentation of goods with the export documents. Admittedly, all the shipping bills along with the export invoices were approved by the proper officer of customs on being satisfied as to the declarations and requirements. Thus, we find that no case of violation of the conditions of Notification No. 57/2000-Cus is made out in the facts and circumstances. Thus, we hold that the Appellant DIL has not violated the provisions of Customs Act read with Notification No. 57/2000-Cus. From the facts on record and the evidence recorded, it is evident that the jewellery in question which have been exported, was manufactured by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t raising any doubt or query based on endorsement of proper officer of customs, at the time of export of gold jewellery. Thus, the whole allegation is not substantiated and has got no legs to stand. We further find that there is also no allegation that the Appellant have exported gold jewellery using less quantum of gold, than declared or made by some other metal other than gold. Also, there is no allegation regarding purity of gold as declared. Thus, we hold that the provisions of section 113(i) for confiscation are not attracted, there being no case of any misdeclaration. DIL as the Nominated agency - We hold that there is no case of any violation against DIL under the Customs act, read with the notification. We further take notice of the fact that the bonds given by the Nominated agency DIL to the customs, have been duly discharged or closed by the proper officer after due verification of relevant documents under the scheme. Jewellery valuer - We find that, the allegation against him would also not stand. It is evident that this Appellant has valued the gold jewellery under export, in the export shed in presence of the Customs officials. He has certified certain other parameters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy, under bond, claiming exemption under Notification No.57/2000 dt.08.05.2000. DIL is a Nominated agency for import of gold, silver, etc., in terms of DGFT Notification No.88/2008 dt.26.02.2009 r.w. para 4.34 of FTP. Both BL JR had exported gold kadas under shipping bills and upon fulfilling the prescribed conditions, had claimed replenishment of gold under the replenishment scheme from nominated agency DIL. 2. As per the two Impugned Orders, customs duty has been demanded from DIL along with equal penalty under Sec 114A in respect of duty-free import of gold supplied to BL JR and penalty has been imposed on BL and JR as well as on the partner/director of these firms viz., Mr. Rahul Gupta Mr. Ashish Gupta. Penalty has also been imposed on Mr. Nirakar Chand, CEO of DIL. Penalties on the three customs appointed jewellery valuers has also been imposed. 3. As per CBEC Circular No.27/2016 dt.10.06.2016, the nominated agency DIL was mandated to obtain (i) EP Copy of Shipping bill from Exporter for quantity released/to be released, as replenishment of gold content exported (ii) BRC (Bank realisation certificate) to monitor the export proceeds, realisation of such export shipments agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion such as ornaments weight, wastage, receipt challan reference, making charges, etc. 4.4. BL/JR exported the jewellery manufactured by the said job worker, under replenishment scheme and thereafter, obtained gold from DIL under replenishment scheme as per the FTP read with Notification No. 57/2000. At the time of filing the shipping bills, they had submitted provisional invoices to the customs based on the notional rate certificate issued by DIL (as per para 4.81(c) of HBoP). The provisional invoice consisted of information such as (i) Particulars, (ii) Gross weight of jewellery, (iii) net weight with wastage, (iv) rate per gram, (v) Total value in USD, (vi) FOB in USD, (vii) Wastage, (viii) Making charges (+) value addition @ 2.05% and (ix) Weight in 99.5% purity terms. FOB value mentioned in the shipping bills was inclusive of freight. All the exports were made to the foreign buyer M/s MN Khan Jewellers (FZE), Sharjah, UAE. BL had filed 35 shipping bills for export of gold jewellery under replenishment scheme at Air Cargo Complex, Shamshabad. Similarly JR had exported jewellery vide 22 shipping bills. The particulars column of all such provisional export invoices of BL/JR menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition not as per the formula given in the FTP, but by taking value of jewellery (+) value of wastage shown in the export invoice, on the gold rate as on the date of export, as provided by DIL, as the value of input. 4.8. BL also stated by their letter dt.17.06.2017 that they first raised provisional invoice at the time of export and final invoice was raised once replenishment gold was purchased against such export and the account was settled with the overseas buyer (remittance received) on the basis of final invoice. 4.9. It appeared to Revenue based on the statement of job worker, that the jewellery exported by BL/JR under the replenishment scheme, was not manufactured by fully mechanized process, rather semi- mechanized process. Hence the minimum value addition required is @ 3.5% as prescribed in Para 4.61(a) of HBP and not minimum value addition @ 2.00%, as declared by BL/JR. 4.10. BL/JR, along with other export documents, had submitted/ presented the jewellery (export goods) and after examination by the registered approved jewellery valuer, certifying the purity of jewellery, wastage declared and the jewellery under export being mechanized plain gold jewellery, was permitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port proceeds and thereafter, obtain duty-free gold under the replenishment scheme. It appeared that DIL had not verified the required parameters in the shipping bill and corresponding export invoices for issuance of duty-free gold under the scheme. 4.15. It further appeared that there was no written agreement for the job work between BL/JR and the Job worker. It was orally agreed for a rate of Rs.5/gm. Further, the exporters declared higher making charges in their export invoices. There was no specific design and size given to the job worker who was asked to manufacture standard size kadas. All the purchase orders from M/s MN Khan Jewellers (FZE), Sharjah to BL/JR were for handcrafted jewellery with no specification as to weight and size of kadas. Though the purchase order was placed for handcrafted jewellery, BL/JR declared the export goods as fully mechanized plain gold jewellery declaring a uniform value addition @ 2.05% which was just above the prescribed minimum value addition of 2% under FTP for fully mechanized jewellery . At the time of export, BL/JR raised a provisional export invoice by adopting the value based on notional rate certificate issued by DIL. Further, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of issue of certificate, which had no relation with the value of inputs used in the manufacture or export of goods. Thus, it appeared that BL/JR with intent to evade payment of duty on the replenishment gold, which they were clearly not entitled as per the FTP, mis-declared the description of goods, value addition achieved, value of wastage and filed shipping bill which appeared to be mis-declared. It further appeared that BL/JR were required to achieve a minimum value addition of 3.5% instead of 2.05% as claimed by them. It further appeared that as gold jewellery was exported in violation of conditions for replenishment scheme under FTP 2015-20, it further appeared to be covered under definition of prohibited goods as per Sec 2(33) and hence, liable for confiscation in terms of Sec 113(d) (i) of the Act. 4.19. It has been further alleged that DIL imported and supplied gold under claim of exemption under the replenishment scheme to BL/JR on the basis of export documents submitted by the exporters, knowing fully well that the export had been made on notional rate as they only had issued the notional rate certificate. DIL was aware that the value declared in the shipping bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied by them and thus, appeared to be liable to penalty under Sec 114AA of the Act. 4.22. Mr. P. Bhawarilal Jain, Mr. Satyanarayana Sharma and Mr. B. Ramkumar Jain, the Government/authorized jewellery valuers, appeared to have wrongly, and without proper verification, certified the wastage details and the process of manufacture of jewellery in the certificates issued at the instance of the customs dept. to BL/JR. These persons admitted that they were only entitled to certify the purity and not other aspects. The said certificates were presented by BL/JR to mislead the customs and the nominated agency DIL for availing duty-free gold against the shipping bills, by mis-declaring the rate and value addition. Therefore, it appeared that aforementioned three jewellery valuers knowingly abetted with BL/JR in wrongly availing duty-free gold under the replenishment scheme. It further appeared that the exported jewellery is liable for confiscation and the aforementioned Government approved jewellery valuers are liable for penalty under Sec 114 114AA of the Act. 5. Accordingly, SCNs dated 31.08.2018 (BL) dated 26.09.2018 (JR) was issued by DRI to all the aforementioned persons proposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 114(iii) and 114AA of the Customs Act, 1962, each; Rs. 6 crore on Jurassic Refiners and Rs.70 Lakhs each u/s 114(iii) and 114AA on Mr. Ashish Gupta. (f) Further, in case of BL whether penalties have been rightly imposed as under:- S.No. Penalty imposed on Amount of penalty Penalty imposed under Section 1. Shri P. Bhawarilal Jain (Govt. Approved Jewellery Valuer) Rs.25,000/- Sec 114(iii) of the Customs Act 1962 Rs.25,000/- Sec 114AA of the Customs Act 1962 2. Shri Satyanarayana Sharma (Govt. Approved Jewellery Valuer) Rs.25,000/- Sec 114(iii) of the Customs Act 1962 Rs.20,000/- Sec 114AA of the Customs Act 1962 3. Shri B. Ramkumar Jain (Govt. Approved Jewellery Valuer) Rs.25,000/- Sec 114(iii) of the Customs Act 1962 (g) Similarly, in case of JR whether penalties have rightly been imposed as under:- S.No. Penalty imposed on Amount of penalty Penalty imposed under Section 1. Shri P. Bhawarilal Jain (Govt. Approved Jewellery Valuer) Rs.20,000/- Sec 114(iii) of the Customs Act 1962 Rs.10,000/- Sec 114AA of the Customs Act 1962 2. Shri Satyanarayana Sharma (Govt. Approved Jewellery Valuer) Rs.20,000/- Sec 114(iii) of the Customs Act 1962 Rs.10,000/- Sec 114AA of the Customs Act 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms Act, 1962, (52 of 1962), and in super- session of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 144/93-Cus. dated the 28th June, 1993 [G.S.R. 480(E) dated the 28th June, 1996] except as respects things done or omitted to be done before such super-session, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts silver, gold and platinum, falling under heading Nos. 71.06, 71.08 and 71.10 respectively of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India.- A. as replenishment under the Scheme for 'Export through Exhibitions/Export promotion Tours/Export of Branded Jewellery as referred to in Paragraph 4.46 of the Foreign Trade Policy, read with relevant provisions of chapter 4 of the Handbook of Procedures, Volume 1, or B. under the Scheme for 'Export Against Supply by Nominated Agencies' as referred to in Paragraph 4.41 of the Foreign Trade Policy , read with relevant provisions of Chapter 4 of the Handbook of Procedures, Volume1, from the whole of the duty of customs leviable thereon, which is specified in the said First S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans the Handbook of Procedure, Volume-1, notified by the Government of India in the Ministry of Commerce and industry published in the Gazette of India, Extraordinary, Part - I, Section 1 vide Public NoticeNo. 01/2015-2020dated the 1st April, 2015, as amended from time to time; (c) Nominated Agencies means,- (1) Metals and Minerals Trading Corporation Limited (MMTC); (2) Handcraft and Handloom Export Corporation (HHEC); (3) State Trading Corporation (STC); (4) Project and Equipment Corporation of India Ltd. (PEC); (5) STCL Ltd; (6) MSTC Ltd; (7) Diamond India Ltd (DIL); (8) Four star export house from Gems Jewellery sector and Five star export house from any sector as may be recognized as nominated agencies by Regional Authority in terms of the Foreign Trade Policy; Any bank as authorized by Reserve Bank of India (RBI) as Nominated agency; 12. As per above notification, it provides for an exemption for Nominated agencies importing gold under scheme Export against supply by Nominated Agencies , wherein, the second proviso envisages - that if exporter has taken gold for manufacturing and export thereof of jewellery (under Bond) and such exports are not effected, then in such situati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery and articles thereof is as follows: SNo Items of export Percentage of wastage by weight with reference to Gold/Platinum/Silver Content in export item Gold/ Platinum Silver a) Plain jewellery, articles, and ornaments like Mangalsutra containing gold and black beads/ imitation stones, cubic zirconia diamonds, precious, semi-precious stones. 2.5 % 3.2 % b) Studded jewellery and articles thereof 5.0 % 5.0 % c) Mountings and findings manufactured(by non-mechanised process) indigenously 2.5% 3.2% d) Any jewellery/articles manufactured by a fully mechanized process and unstudded. 0.9% 0.9% e) Mountings, whether imported or indigenously procured/ manufactured, used in studded jewellery 1.8 % 1.8 % f) Gold/silver/platinum medallions and coins (excluding coins of nature of legal tender) 0.2% 0.2% g) Fittings and mountings manufactured by mechanized process 0.9% 0.9% 4.61 Value Addition under scheme for export of jewellery, value addition shall be calculated as per paragraph 4.38 of FTP. Minimum value addition shall be: S.No Items of export Minimum Value Addition a) Plain gold jewellery, Articles and ornaments like Mangalsutra containing gold and black beads/imitation stones, except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for booking of precious metal gold/silver/platinum. Quantity of precious metal booked with nominated agency shall be equivalent to precious metal content in the export product and admissible wastage. (b) Applicant shall at the time of booking deposit an earnest money for a minimum amount of 20% of notional price of precious metal, which shall be adjusted at actual sale. (c) Exporter may also export jewellery on a notional rate based on certificate provided by Bank . Exporter must fix price within credit terms allowed to buyer and realise proceeds within the due date of the credit terms or 180 days, whichever is earlier. Exporter exporting on a notional basis under Replenishment Scheme must book the same quantity of gold with Nominated Agency on same rate that he may have booked with buyer. Nominated agencies shall purchase precious metal on behalf of exporter at the rate so fixed and thereafter issue a purchase certificate bearing a serial number to exporter indicating quantity of gold/ silver/platinum and CIF value, in dollars including the Rupee equivalent. Price shall be actual price at which gold/silver/platinum is purchased by nominated agencies plus permitted service charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. 16.2. There are two schemes of Export Promotion given under Para 4.34 of Foreign Trade Policy 2015-20, notified by Director General Foreign Trade under the Foreign Trade Development Regulations Act 1992. Such two such schemes are called Advance Procurement and Replenishment scheme . As per the schemes, exporter of jewellery may obtain gold as input for export of product from Nominated agency in advance i.e., Advance Procurement Scheme or as replenishment, post the exports i.e., Replenishment Scheme , in accordance with the procedure specified in Para 4.82 of HBP. Also as per Para 4.34(ii), such exports (under replenishment) would be subject to prescribed Value Addition. Further, FTP Para 4.34 only specifies the schemes and the procedure for the same is provided in Hand Book of Procedure (HBP) which is required to be followed and for replenishment from Nominated Agencies, procedure is provided in Para 4.82 of the HBP. 16.3. Para 4.38 of FTP stipulates formula/method for calculation of Value Addition i.e. (A-B)/B *100, where A is FOB value of the export realised/FOR value of supply received and B is Value of inputs (including domestically procured) such as gold / silver / platinu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n B in Para 4.38 mean duty free (either in advance or replenishment basis) gold/silver/platinum content in the export product plus the admissible wastage. 16.7. It has also been submitted that Para 4.00 of FTP dealing with objective of scheme lays down that the schemes are for import of duty free inputs as well as replenishment. Thereby word duty free referred above is for customs duty free input i.e. duty free gold imported by nominated agency. 16.8. The Ld. Counsel laid special emphasis on the communication dt. September, 2019 of Additional Director CBEC (now CBIC) wherein it is stated that the DGFT is the final authority for policy clarification. Hence DIL had requested the DGFT to issue clarification regarding Value Addition. Only after this communication the DGFT issued the above referred Policy Circular. It does not hold in the mouth of the Adjudicating authority or DRI to go beyond the stand of DGEP, i.e. the competent officer of CBIC/board. 16.9. The Ld. Counsel also drew attention of this tribunal to the email dated 13.11.2020 sent by the DGFT to DIL, clarifying that Duty Free in Policy Circular 28 dated 27.09.2019 means inputs imported duty free either on advance or on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ud etc. 16.12. Further urges - that the exporter is required to mandatorily give all details and the customs officer/proper officer is duty bound to check the particulars before giving the let export order. In the present case every export/shipping bill has been checked with the goods by a custom appointed-govt. approved valuer in the export shed, and on being satisfied, the let export order was given by the Superintendent and/or Assistant commissioner (the proper officer). The whole case of DRI is that such valuers gave statement u/s 108 that they never certified the goods to be fully mechanised in spite of them endorsing after verification, as fully mechanised in the certificate given by them. The cross examinations of valuers as well superintendents and ACs were sought, but not provided. Thus, relying on such statements of valuers is bad u/s 138B. 16.13. It is further submitted that the Adjudicating Authority has misguided himself in the impugned order, about differentiation between mechanisation and automation. The Job Worker M/s Ghanshyam Dass Jewellers has explained the process which includes use of machines/machine tools at all the stages of manufacture. Have categorically s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r alleged violation of Notification 57/2000-Cus, without there being any shortfall in export, in comparison to gold released for manufacturing, which in present case is absent. Further reference has been made to Para 4.41 of FTP, which is reference to Nominated agency, wherein FTP and HBP prescribes the procedure of monitoring the Nominated agencies under Para 4.94 of HBP, under jurisdiction of DGFT. 16.16. Further submissions were made in relation to the adjudication Order being ab initio void in terms of second provisio of Section 28(9) of the customs Act 1962. The SCN u/s 28(4) was issued on 31.08.2018 and ought to have been adjudicated, maximum in one year, where no extension has been granted. The Appellants and Respondents both have relied upon the process of extension through notification by DG DRI. In the present case, there is no notification or any specific extension brought on record even by DRI during adjudication and contesting such appeal in case of BL. The petitioner has relied on judgement passed by Hon ble Delhi High Court in Swatch Group India case, where SCNs adjudicated, have been quashed. Reliance has been placed on Ruling in Gautam Spinners Vs. Commissioner Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent while recording the statement in English on their own accord. The Adjudicating authority failed to exercise its discretion in a judicious manner. 22. It is a known fact that handmade jewellery is very expensive due to high labour charges (Rs.60 to 150 per gram) for the hard work and time taken by the artisans. Comparatively, making charges of Rs.5/gram and the quantity of gold jewellery made in one day by the mechanised process, justifies and supports the declaration of the Appellants M/s BL/JR that it was fully mechanized. Furthermore, any observation on reasonableness of the making charges, is beyond the jurisdiction of the Customs Law. It is impossible to make large quantity of gold kadas without machines in a short time span of 2-3 days, and the Adjudicating Authority has not disputed the submission that the job worker used to manufacture the gold Kadas in one or two days. It further supports the contentions of the Appellant - M/s BL/JR. For example- Appellant BL sent 26 kg of gold plus 2 kg of alloy (approx), on 28.09.2016 vide challan No. 8 and received 28 kg of jewellery on 30.09.16. 23. Even the averment of Revenue- the order of the foreign buyer M/s M.N. Khan Jewellers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to the Appeals of BL JR, relies on the allegations in the SCN and the findings in the Impugned Order. He further urges that the core issue is whether customs duty leviable on 1426 kgs of gold imported by DIL and supplied to BL 800 kgs gold imported and supplied to JR, under the replenishment scheme has been rightly demanded from DIL, for the alleged contraventions of the provisions of Customs Notification No.57/2000. This flows from the principle allegation that BL/JR had fraudulently obtained/purchased duty-free gold bars from DIL against export of gold kadas, by resorting to mis-declaration of export goods, in quantum and/or value. 27.1. Adjudicating Authority has upheld all the allegations made in the SCN but has revised the calculation of arriving at the value addition. As per the SCN, the value addition was worked out at -11.82% on provisional export invoice and -14.44% on final export invoice/price. Adjudicating Authority has reworked the valuation and arrived at -6.25% on final FOB prices as against the value addition claimed by the exporters @ 2.05%. 27.2. Two key issues having a bearing on the merits of the Appeals are: i) Whether or not the subject kadas were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I was given in reply to specific questions. Further, stated that it was merely a statement of facts and general procedure being followed by DIL as nominated agency. Further DIL sought exemption from appearing from cross-examination as he was a co-noticee. The Adjudicating Authority placed reliance on the ruling of Hon ble Bombay High Court in Patel Engineering Ltd vs UOI [2014 (307) ELT 862], wherein it was held that the denial of cross-examination does not amount to violation of principles of natural justice in every case, instead it depends on particular facts and circumstances. Further, the cross-examination of three Government approved jewellery valuers was also denied on the ground that they are conoticees and their statement is narration of facts about certificates issued by them. The Adjudicating Authority further observed that the three jewellery valuers in their respective statements have averred, inter alia, that the certificate with respect to wastage, is as per the wastage stated in the export documents and he had not examined the wastage with any authentic method. Further, he had copied down the wastage as 0.896% as mentioned in the export document. As regards method o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence of witnesses is not possible due to the lockdown imposed w.e.f. 24.03.2020, which was further extended twice. Subsequently, when the interstate movement was allowed, cross-examination was again fixed on 30.06.2020. Further, Mr. Satyanarayana Sharma informed by letter that he is unable to appear being suffering from diabetes and hypertension and other two valuers also did not appear without information. Appellant Mr. Rahul Gupta appeared with his Consultant Mr. Sanjeev Kumar, for cross-examination on 30.06.2020. 31. The cross of the CHA, who handled the exports, could not be held since the communication sent fixing the dates 4 times, were returned as undelivered. As for the cross of concerned officers, who customs-cleared the export consignments, and the Investigating Officer, the Adjudicating Authority did not see any justification to accede to the request citing support from case law. Further, no statements were recorded from them and nowhere, they had averred about the aspects of value addition or process of manufacture. 32. The cross-examination of Mr. Harish Chand Agarwal (job worker) was held on 11.03.2020 wherein he made it clear that no statement in English was given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, in the second proviso, it clearly provides that Nominated Agency supplying gold to the exporter is liable only for difference (shortage) between the quantity issued and that contained in the exported jewellery or articles. We further find that the value addition norm was required to be checked by the proper officer of customs on presentation of goods with the export documents. Admittedly, all the shipping bills along with the export invoices were approved by the proper officer of customs on being satisfied as to the declarations and requirements. Thus, we find that no case of violation of the conditions of Notification No. 57/2000-Cus is made out in the facts and circumstances. Thus, we hold that the Appellant DIL has not violated the provisions of Customs Act read with Notification No. 57/2000-Cus. 37.3. So far the issue regarding manufacturing processes is concerned, we find that the job worker has categorically stated that he has used machines and/or machine tools at each stage of the manufacturing process. Firstly, he has used electric furnace to melt the metal that is gold with the alloy. Thereafter, the alloyed gold was fed into rolling machine and the said machine give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the agency. We find that in the adjudication order, the authority has wrongly taken the domestic price (price charged by refiners/suppliers in DTA) and has adjusted the same with the excise duty to arrive at duty free price of gold/silver. Adoption of such basis is contrary to the provisions in the foreign trade policy, read with the HBP, read with the clarifications given by the DGFT as well as the DGEP, referred supra. Accordingly, we find that the basis adopted by the Adjudicating Authority, for calculation of value addition is wholly erroneous and palpably wrong. 37.5. Therefore, the whole crux of the issue is whether the value addition norm as adopted by the Revenue was correct or as adopted by the Appellants based on the extant FTP and clarifications issued in this regard. As already discussed and elaborated upon in view of the extent policy guidelines as well as clarifications, it is obvious that the interpretation of DGFT Authority would prevail over Customs Authority, which has also been admitted by DGEP in their circular (quoted supra). Therefore, if that norm is followed instead of the calculation method adopted by the Revenue, the requirement of Notification No. 57/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y BL/JR had declared making charges as value addition, which is not acceptable as per FTP. Whereas, in fact, as per Para 4.82(c) of HBP, the making charges do represent value addition under FTP because the scheme is designed to import gold for export of jewellery at some rate by making value addition of making charges and margin. Appellants have also refuted that they were declaring higher values to customs and reducing the same after export, and not informing the same to the customs. Revenue has submitted that exporters were neither declaring value at the time of export nor at the time of pricing. On the grounds that the Appellant - DIL should have made independent verification of value addition and just not rely on the customs attested invoice. The Appellant - DIL has stated that the customs attested documents give exporter the entitlement for quantity of duty-free gold and the Appellants were bound by it. 37.9. We further find that such verification, as regards the percentage of wastage declared and value addition etc., was to be done by the customs authorities at the time of export, especially, when it is declared to be an export under replenishment scheme. That is, before givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Appellant has valued the gold jewellery under export, in the export shed in presence of the Customs officials. He has certified certain other parameters including weight and purity but that does not make him accomplice. No case of any suppression or collusion in the valuation report is made out. In this view of the matter, we allow the appeals of the jewellery valuer Mr. Satyanarayana Sharma and set aside the penalties imposed on him. 37.13. Consequently, we hold that no penalties are imposable on any of the parties/Appellants. Accordingly, all the penalties imposed on all the Appellants are set aside. 37.14. The Appellants have also raised an objection on account of limitation for adjudication. According to the Appellants, the Order has been passed in violation of Sec 28(9) of the Customs Act 1962, which in the sense, mandates that SCN issued under Sec 28(4) must be adjudicated within one year from the date of notice, whereas, in the instant case, the notice was issued on 31.08.2018 but the Adjudication Order was passed only on 26.08.2020. They have also stated that while the Order refers to extension of time limit of one year by DGRI vide its letter dt.21.08.2019, the same has ..... 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