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TMI Blog2022 (7) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962 and released provisionally and allowed export to Bangladesh on execution of Bond covered by Bank Guarantee by the exporter. 2.2 Market enquiry in respect of the goods, attempted to be illegally exported, revealed that the declared value was highly inflated and over invoiced by more than 3 (three) times as the ascertained collective value. 2.3 It was also observed that the Bangladesh government allows shipment only against Letter of Credit, the export consignment against Letter of Credit were only shown/declared to Bangladesh Customs while the consignments against DA basis were not declared to the Bangladesh Customs in order to facilitate the Bangladeshi importer for which they prepared duplicate manifest by fabricating and forging the export documents with the signatures and seals of Custom officers with fake rubber stamps. 2.4 During search conducted at the premises of Custom House Agents, Rubber Stamps, having impression of Inspector of Customs & Superintendent of Customs, Mahadipur Land Customs Station and one N. C. Das were recovered along with incriminating documents. Investigations revealed that the said Custom House Agent had prepared duplicate invoice for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent set of documents with particulars like value and quantity of the consignments forged and fabricated to suit two different purposes. 2.10 The documents involving both D.A. as well as Letter of Credit were not being negotiated in the manner as prescribed under the provisions of Para 3 (1) (a) of Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 notified under Notification No. FEMA 14/2000- RB dated 03.05.2000 and therefore the transactions effected relating to such exports cannot be construed as a normal business transaction in terms of prevailing commercial statutes. Consequently, the remittances as received against the Bills of export where mode of payment has been shown as D.A. appears to be an illegal movement of foreign exchange across international borders carried out solely for the purpose of availment of undue post export benefit by the exporter in the exporting country by claiming such inward remittances as sale proceeds of the exported goods. 2.11 Accordingly, the invoices of the concerned export consignments were not genuine and valid commercial documents for the purpose of legal transaction and consequently the value as declared were re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, whereas the market verification committee of S&D unit under the Commissioner conducted the fresh enquiry in local market after a lapse of three years from the date of export that too with the representative of the exporter, thereby prejudicing the market verification process itself. (iii) Not associating the noticee/exporter in the market verification conducted by DRI in course of investigation cannot be a ground for rejection of the market enquiry report in as much as law does not speak anything to the effect that the market enquiry should be conducted in presence of the noticee. (iv) Doctrine of natural justice was followed as the Adjudicating Authority allowed the noticee firm to cross examine the proprietors of the said wholesale dealers with whom DRI made the market enquiry. As such, there was no need of further market inquiry as conducted under order of the Adjudicating Authority. (b) In the Order, the Commissioner has observed that the exporter had submitted some purchase documents before the adjudicating authority from which it revealed that rate of purchase of goods were at a value higher than the FOB value declared by the exporter. But it appears that veracity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exporter along with his accomplices in the instant case though not punishable under the Customs Act per se, it however shows the mensrea of the exporter to indulge in illegal activities. By supplying forged set of export documents to his counterpart in Bangladesh, the exporter had only facilitated acceptance of his grossly over-invoiced export consignments so as to gain undue enrichment by availing undue DEPB benefit. 3.1 We have heard Shri Manish Mohan, Additional Commissioner, Authorized Representative, on behalf of appeallnat revenue and Shri Arjit Chakraborty, Advocate for the respondent. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For dropping the charges against made against the respondent Commissioner has in the impugned order has observed as follows: "The charges framed in the show cause notice and specific proposals are based mainly on following grounds: i. Overvaluation of export goods i.e. synthetic fabrics by the exporter in order to avail undue DEPB benefit ii. Mode of payments for export to Bangladesh was not accepted and allowed in Bangladesh for import in terms of prevailing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... samples of fabrics sealed in presence of Customs officers to be verified in market in presence of Customs officers and themselves so that they get correct value of goods. Since they were not present physically during market verification done by the investigation, they wanted the verification to be done in their presence. They also submitted that as per CBEC circular 37/99 dated 24.06.99 on DEPB restricting DEPB benefit to 50% of market value of export goods which is not violated in the present case and contested the market value arrived by the DRI. In the present case even if the valuation preferred by DRI is accepted the DEPB benefit is less than 50% of market value. I find that they also wanted to cross-examine the proprietors of whole sale dealers from whom DRI made market verification. As per available records, I find that Sri Suman Chakraborty, Proprietor of M/s. Suman Trading Company and Sri Apporva Murkerjee, Proprietor of M/s. A.M. International was examined by Sri N.K. Chowdhury, advocate of Sri Ashoke Das, proprietor of M/S A.S. Traders. The exporter during personal hearing before me pleaded that valuation done in SCN was not acceptable as the noticees were not involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, Chowrangee Lane, Kolkata - 700 016. The result of the Joint market verification report is reproduced below in tabular form: S N o Value (per mtr.) in Rs. M/s. S.S. International M/S. Jain Textile M/s. Shree Balajee Trading Co. M/s. Om Trading M/s.Fashion India Description of Samples Qtyy 2011 2009 2011 2009 2011 2009 2011 2009 2011 2009 1 Synthetic fabrics (Phiroza blue colour) 01 pc 80 73 80- 85 70 90 75 82- 85 Running busines s for last one year 81-84 68 2 Synthetic fabrics (white colour) 01 pc 78 71 70- 75 64 87 72 75- 80 Do 69-73 62 3 Synthetic fabrics (black colour) 01 pc 80 73 80- 85 70 90 75 85- 90 do Not dealing at pressen t 68 The above market enquiry made jointly by the Customs Officers and representative of exporters suggests that the lowest and highest whole sale price of the white colour export fabrics in the year 2009 were Rs. 62.00and RS.72.00 respectively. For blue and black colour fabrics the lowest and the highest price was Rs. 68.00 and Rs.73.00 in 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bangladesh importer to evade payment of Customs duty. The charge of confiscation of vehicles under section 115(2) of the Customs Act' 1962 used for carrying goods under cover of subject 5 bills of export cannot stand as I have rejected the charge of over valuation of export consignment covered under the bills of export in question. (2) Mode of payment: - In the impugned SCN, it has been alleged that in case of export to Bangladesh, payment by opening of Letter of Credit was the only mode of payment accepted and allowed as per Bangladesh import policy. In the present case the exporter had shown the mode of payment in the bills of export on DA basis in respect of shipping bill nos. 88, 89 and 90/EXP/MAU/DEPB/MDPR/2009 dated 06.01.2009. In respect of bill of export no. 91//EXP/MAU/DEPB/MDPR/2009 dated 06.01.2009 mode of payment was under letter of credit no. 094108010537 dated 27.12.2008. Since, the payment terms in 3 bills of export was shown as DA basis, the goods covered under these bills of export were not permissible for export to Bangladesh. In support of their contention, they have relied upon a report of the 6th meeting of the SAARC sub group on Customs Co-operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents presented before and passed by the Indian Customs was not forged. It is the second set of documents meant to be presented before Bangladesh Customs by importer from Bangladesh side which is forged specifically with a view to show a lower......." 4.3 From the impugned order it is evident that the Commissioner has determined the value of impugned export consignments on the basis of the verification jointly undertaken jointly by the members of the market verification committee and Mr. Nathmal Jajodia, Director of M/s. Jai Vikshu Niketan and Sri Sandeep Jati, authorized representative of M/s. A.S, Traders. It is also noted by the Commissioner for the joint verification of the market price of the impugned goods, he had invited the conversant officers of DRI. Commissioner also refers to the communication made by the ADG DRI, refusing to be the part of such joint market verification. He notes that, Vide letter DRI F. No. 4/Kol/APP/2009/9552 dated 02.01.12 received from ADG, DRI, KZU, it was informed that "in course of investigation by DRI, market enquiry was conducted by DRI officers, details of which are given in Para-16 of SCN. As DRI is the investigating agency, DRI office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used results of market enquiry for the purpose. However, the details of the enquiry such as the persons contacted, whether they dealt with similar fabrics and the results were not intimated to the appellant. Information gathered at the back of the exporter cannot be used to penalize him in adjudication. In the instant case, confiscation and penalty were ordered based on the results of the market enquiry made without involving the appellant in any manner." 4.7 In case of bard Exports [2018 (363) ELT 903 (T-Mum)] tribunal observed: "4. On going through the impugned order of the Commissioner, we note that the entire case of the Revenue is based upon the result of two market enquiries. We note that the ready-made garments were Baba Suits, Boys trousers, Boys T- shirt-knitted, etc. The first market enquiry conducted by the Revenue was from a number of small stores selling more or less the said goods. The market survey specifically says that "identical ready-made garments were not available in the said shops, some what similar goods are available". We observe here that the value of the clothing depends upon the number of factors including the quality of fabric used, stitching qualit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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