Customs, Excise and Gold Tribunal - Delhi
Expo Globe India Ltd. vs Commissioner Of Customs on 14 May, 2002
Equivalent citations: 2003(152)ELT216(TRI-DEL)
ORDER K.K. Bhatia, Member (T)
1. The appellants filed four Shipping Bills all dated 15-3-2000 at the ICD, Tughlakabad, New Delhi for the export of items declared as "Multi-Coloured Printed Books with jacket and Cover" claiming DEPB benefit as per the relevant Group Code and the DEPB Schedule @ 16% of FOB value. The consignments were declared at the FOB value Rs. 3,80,92,071/-and involved DEPB credit of Rs. 60,94,731/-. The exports were meant to M/s. American Expo Ltd. Houston, Texas, USA. On examination, the goods were not found to be the Multi Coloured Printed Books as declared by the exporters and they were further found to be printed in USA. In a statement dated 24-3-2000 recorded from Shri Arvind Srivastava, Head International Business of the exporters, he submitted that the books sought to be exported were purchased from the market and they were not eligible for DEPB benefit. Consequently, the export consignments were seized under Section 108 of the Customs Act, 1962 and the proceedings were initiated against the party. They were issued a show cause notice dated 4-10-2000 in which they were called upon to show cause why the books sought to be exported should not be confiscated under Section 113(d) and why the DEPB benefit of Rs. 22,49,114.00 on the books already exported should not be denied to them. They were further called upon to show cause why a penalty should not be imposed on them under Section 114. On considering the reply of the party, the Commissioner of Customs, ICD Tughlakabad, New Delhi in his order observed that as regards to the question of DEPB credit in case of re-export of imported goods, a reference was made to DGFT for clarification and the DGFT vide their letter dated 16-8-2001 have advised as follows :
"The DEPB Scheme aims to neutralise the incidence of basic Customs duty on the inputs used in the export produce as per Standard Input/output Norms. Accordingly, the DEPB rates for multi coloured printed books have been worked out on the basis of the inputs given against Sl. No. A1569 of Chemical and Allied Products as given in Handbook of Procedures (Vol. II). In the case referred to by you, the multi coloured printed books imported from USA are being re-exported to the same supplier in USA. Such transactions are not covered for the benefit under the DEPB Scheme. Goods imported may be re-exported in the same or substantially same form under Para 11.7 of the Policy and on exports made under para 11.7 benefit of DEPB is not available."
2. The above clarification received from DGFT was duly communicated to the noticee party. The Commissioner in his order has observed that the interpretation of the policy made by the DGFT is binding and consequently, he held that the DEPB benefit is not available to the noticee party. As regards the valuation of the export consignments, the Commissioner in his order has observed that the books in question are offered for sale to the same overseas supplier at about nine times of the price at which the goods were originally purchased from them and that too after a lapse of one and a half years. He has accordingly rejected the contention of the party that there was no deliberate over valuation of the export consignments. He further observed that in the present case the overseas supplier of the books and the buyer of the export books happened to be the same person/company. He has further observed that the description of the impugned books was multicoloured printed books with jacket and cover, while at the time of their import, the word "multi-coloured" was missing; that the insertion of the word "multi-coloured" in the description of the export consignments makes it clear that the sole intention of the exporter was to obtain DEPB benefit. He has further held that in no uncertain terms the DEPB benefit is not admissible in respect of re-exported consignments. He has however, observed that there was no purpose of going into the question of over-valuation since over valuation was admitted with a view to earn DEPB benefit. Consequently, the Commissioner, in his order, ordered for the confiscation of the impugned books under Section 113(d) of the Customs Act, 1962 read with EXIM Policy. He however gave an option to the party to redeem the same on payment of a fine of Rs. 5 lakhs. He further imposed a penalty of Rs. 50,000/- on the appellants under Section 114(1).
3. This is an appeal against the impugned order of the Commissioner, Customs. I have heard Shri L.P. Asthana, Advocate for the appellants and Shri H.C. Verma, JDR for the respondents. The ld. Counsel for the appellants submits that since the consignments have not been allowed to be exported and have actually not been exported, there is no question of their claiming any DEPB benefit. He however contends that the observation of the Commissioner in his order that they have admitted the over-valuation of the export consignments in their submissions, is factually not correct. It is contended that they are a merchant exporter and they had to procure the books in question from the market; that they had given a quotation/offer to M/s. American Expo Ltd., Houston, Texas, U.S.A. which is accepted by them. It is, therefore, contended that the allegation of over invoicing is based merely on suspicion, conjecture and surmise and is not based on any evidence. It is further contended that the domestic sale price in respect of the volumes sought to be exported by them in most cases is higher or equal to the export price; that this fact indicates that the sale price by the book sellers offered to them was genuine in the normal course of trade and that it also indicates that their purchase price and export price was fair and reasonable. The Id. Counsel, however, fairly submitted that he is not contesting the liability to confiscation of the export consignments and imposition of redemption fine. But, he would request for reduction in the fine and setting aside of the penalty. I have considered the submissions made before me. As already recorded above, the merits of the case are not much in challenge before me in this appeal. It is also not disputed that the consignments of the goods sought to be exported under the DEPB scheme which were earlier imported could not have availed the DEPB benefit as clarified by the DGFT in his communication dated 16-8-2001 - a copy of which was provided to the appellants. Even if one gives due margin to the contention of the party against the allegation of over-invoicing of export consignments, the untenability of their claim for the huge amount of DEPB benefit in the light of the Policy provisions pointed out in the DGFT letter - which must have certainly been known to them - cannot be eschewed. In this view of the matter, no infirmity can be found in the order of the Commissioner of Customs. I further find that a fine of Rs. 5 lakhs for a consignment of the value of over Rs. 3.8 lakhs (sic) and a penalty of Rs. 50,000/- are not excessive. Consequently, the appeal fails and the same is accordingly dismissed.