Customs, Excise and Gold Tribunal - Delhi
Texcomash Exports vs Commissioner Of Customs on 19 January, 2000
Equivalent citations: 2000(117)ELT396(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in the appeal filed by M/s. Texcomash Export is whether the value of goods exported by them was overvalued by them.
2. Briefly stated the facts are that the Appellants filed a Shipping Bill (SB) No. 4462, dated 12-7-1994, under claim for duty drawback, for export of 16000/- pieces of men's shirts made of 100% viscose for export to Russia. The price declared by them was Rs. 2,48,25,878.40 and the drawback claimed was Rs. 155.16 per piece. A show cause notice dated 8-8-1994 was issued to them for denial of drawback claim and for confiscation of goods as the inquiry conducted from Shri Rajan Gupta of M/s Dress "N" Style, Vasant Place Market, New Delhi and M/s Sneh Libas, Vasant Place Market New Delhi revealed that the wholesale price of the shirt would be about Rs. 50/- to 75/- per piece and retail price would be about Rs. 90/- to 110/-. The Commissioner, Customs, New Delhi under the impugned order, directed appropriation of Rs 2 lakhs towards fine from the bank guarantee furnished by the appellants for the export of goods in question, denied the drawback to the appellants under Section 76(1) (b) of the Customs Act and imposed a penalty of Rs. 50,000/- under Section 114(iii) of the Act, holding that Shri Rajan Gupta of M/s Dress 'N' Style had specifically stated, in his opinion dated 20-7-1994, that a shirt with 100% viscose of normal finish with deor design would cost Rs. 50/- to Rs 65/-; that his retraction on cross examination was not convincing which is an after thought.
2. Shri A.K. Jain, learned Advocate, submitted that the opinion of Shri Rajan Gupta was obtained on 20-7-1994 whereas the sample was drawn only 30-8-1994; that the file does not show that any sample was drawn at any other time. He further, submitted that once the Adjudicating Authority allows the cross examination of a departmental witness, he is duty bound to take into account the answers made by him during cross examination for deciding the charges levelled in the notice; that once a departmental witness resiles from his earlier statement during his cross examination, his earlier evidence cannot be relied upon. He relied upon the decision in Keshoram Bora v. State of Assam, AIR 1978 S.C. 1096 wherein it was held by the Supreme Court that "when once a prosecution witness is declared hostile the prosecution clearly exhibits its intention not to rely on the evidence of such a witness and hence his version can-not be treated as the version of the prosecution itself. Reliance was also placed on the decision in Balkan and Anr. v. State of Rajasthan, 1976 Crl L.J. 828 (Raj.) wherein the Rajasthan High Court held that no part of the evidence of a hostile witness could be used. The learned Advocate also referred to the decision in the case of Union of India v. Abdidkadu Abdulgani Hasmani, 1991 (55) E.L.T. 497 (Guj.) in which the Gujarat High Court held that the stage of recording statements under Section 108 of the Customs Act arises only when an inquiry is started either for confiscation of goods or for imposing penalty. The learned Advocate contended that deposition in cross-examination is to be regarded as a statement under Section 108 of the Act. He also mentioned that an opinion (that too in the form of a letter) without any mention therein of any statutory provision and without any signature of any customs official is of no legal consequence and reliance was placed on the decision of the Appellate Tribunal in the case of Kartar Singh v. Collector of Customs - Order No. A/218/87-NRB, dated 1-4-1983 that when departmental witness does not appear for cross-examination, his evidence is to be deleted from the record and reliance was placed on the decision in the case of Nemimth Appayya Hanamannanam -AIR 1966 Mys 154.
The learned Advocate also submitted that there was no mention in the show cause notice for denying the drawback and as such denial of drawback is beyond the scope of the show cause notice which is not permissible. Reliance was placed on the decision in Thermo Plastic Industries v. C.C.E., Mumbai, 1999 (33) RLT 439 (T). He further, mentioned that there are no provisions under the Customs Act to impose penalty and to order confiscation of goods if the market value is found lower than the drawback amount claimed in terms of Section 76(1)(b) of the Act. He reiied on the following decisions.
(i) United Timber Industries v. Commissioner Customs - 1999 (107) E.L.T. 704 (T)
(ii) Collector of Customs, Kandla v Dimple Overseas Ltd. 1995 (76) E.L.T. 48 (T) He finally submitted that the opinion given by Rajan Gupta is of no use as the procedure for drawing the sample was not followed and relied upon the decision in Injecto Ltd. v. C.C.E., New Delhi, 1999 (32) RLT 147 (T), that entire remittance have been received by them. He also claimed interest on the amount of drawback not paid to them and relied on the decision in Rafiq Khan v. Laxmi Narayan Sharma, (1997) 2SCC 228.
4. Countering the arguments, Shri Prabhat Kumar, learned SDR reiterated the findings as contained in the impugned order and submitted that in departmental adjudication of cases under the Customs Act, strict principles of evidence are not applicable; that the Department has not to prove its case with mathematical precision; that Shri Rajan Gupta had mentioned all the particulars about the shirt in the opinon tendered by him; that the Appellants in their communications dated 10-8-1994, 17-8-1994 and 22-8-1994 has clearly mentioned while requesting for provisional release of the goods, that they would give an undertaking for not pressing their claims for drawback not only in respect of the consignments in question but also in relation to the previous consignments which had already been exported, that it is evident from these communication that the Appellants knew about the overvaluation of goods exported by them. He, further, submitted that deposition in cross examination cannot be regarded as a statement recorded under Section 108 of the Customs Act as it would make the court a party to the case; that the Commissioner's findings that deposition by Gupta in cross-examination was an after thought, is correct in the circumstances of the case. He finally mentioned that as per provisions of Section 113(i) of the Customs Act any goods entered for exportation under claim for drawback are liable for confiscation if the goods do not correspond in any material particulars with the entry made under the Act and accordingly penalty is imposable under Section 114 of the Act.
5. In reply, the learned Advocate submitted that the provisions of Section 113(i) are not attracted as these apply only to dutiable or prohibited goods which is not so in the present matter; that in shippng bill, the value declared is FOB and not the market value.
6. We have considered the submission of both the sides. The department's case of overvaluation is based on the opinions given by Shri Rajan Gupta of Dress 'N' style and by M/s Sneh Libas. At the time of adjudication the person who gave the opinion on behalf of M/s Sneh Libas was not produced for cross examination. Shri Rajan Gupta was cross examined and he categorically replied that the shirt shown to him for his opinion was wrinkled and mutilated one and he had never bought or sold any "Deycor' Design shirt and that he quoted the price considering the shirt to be export surplus goods. We observe from the opinion tendered by him on 20-7-1994 that the shirt shown to him was of 100% viscose with normal finish and wholesale price would be Rs. 50 to Rs. 60/-. The Department no doubt is not required to prove its case with mathematical precision. They have, however, to prove with sufficient material that the Shirt's price was only Rs. 110% in retail market. They have not sucessfully established that the shirt shown to Rajan Gupta was the same shirt which form part of the consignment in question, particularly in view of the fact that he, in his cross examination, has categorically stated that the shirt shown to him was a different one. The department had also not questioned him on his retraction. The Department had also not succeeded in establishing the credentials of Rajan Gupta for expressing his opinion about the exported goods as he was only a dealer in ready garments in wholesale and has not exported any garments and does not have any knowledge about the value of the goods which are meant for export. He had also deposed that he does not particularly deal in fashion design garments and the prices of fashion design garments can vary depending on fashion, design, etc. There is no other evidence brought by the Department except the opinion given by Rajan Gupta which has not been confirmed by him in his cross examination. We are thus of the view that the Department has not succeeded in substantiating the charges of overvaluation. In absence of any corroboration of the retracted statement we feel that the benefit of doubts has to be extended to the Appellants. We also take note that the learned Advocate for the Appellants has mentioned that the entire remittances have been received by the appellants. In the light of these facts and circumstances, we set aside the impugned order and allow the appeal.