Custom, Excise & Service Tax Tribunal
M/S. Fairdeal Impex vs Cce, Coimbatore on 21 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI C/398/2005 (Arising out of Order-in-Original C. Cus. No. 1/2005 dated 12.05.2005 passed by the Commissioner of Customs, Central Excise, Coimbatore). M/s. Fairdeal Impex : Appellant Vs. CCE, Coimbatore : Respondent
Appearance None For the applicant Shri K. Veerabhadra Reddy, JC (AR) For the respondent CORAM Honble Shri D.N. PANDA, Judicial Member Honble Shri MADHU MOHAN DAMODHAR, Technical Member Date of Hearing/Decision: 21.09.2016 FINAL ORDER No. 41601 / 2016 Per: D.N. Panda None present for the appellant.
2. Ld. DR explains that the allegations appear in page-16 of the adjudication order are as under:-
(i) M/s. Fairdeal Impex, New Delhi was a merchant Exporter, having Certificate of Importer-Exporter Code No.3203000920
(ii) According to the Certificate IEC was issued on 25.4.03 by the Office of Joint Director General of Foreign Trade, Coimbatore having the address 727, Jothi Illam, Trichy Road, Ramanathapuram, Coimbatore-45 and having Branch-1 at 7/102, Sannathi Street, Thirumuruganpoondi, Avinashi Taluk, Coimbatore District and Branch (2) at 1/40, Basement, Old Rajinder Nagar, New Delhi-110 060.
(iii) During investigation the summons issued to the Coimbatore address and Branch Office (1) address were returned undelivered by Postal Authorities with remarks no such addressee at the said address.
(iv) Shri Shankar, the authorised signatory, who had filed the shipping bills did not respond to the summon. As per the statement of Shri Ved Barat, Manager Shri Shankar left the concern without intimation.
(v) M/s. Fairdeal Impex informed that they purchased the knitted garments at New Delhi form on M/s Priyanka Overseas, New Delhi and M/s Priyanka Overseas informed that the goods were supplied to them by M/s Alpha Export, New Delhi.
(vi) The purchase price of goods quoted in the invoices of M/s Priyanka Overseas, New Delhi also appeared to be inflated value as they had not originally sent the goods and they had purchased the same from one M/s Alpha Exports. All the firms are trading company and the value appeared to be unreasonable since the market price of the goods are lower than the purchase price.
(vii) M/s Fairdeal Impex had filed shipping bills bearing Sl.Nos.39331, 39332, 39333, 39336 and 39337 dated 07.11.03 under DEPB Scheme and also filed Shipping Bill Nos.39334, 39335, 39380 to 39385 dated 07.11.03 for export under Drawback Scheme.
(viii) M/s Fair deal Impex failed to furnish the true description and value of the export goods and misdeclared the description of goods exported under DEPB Scheme vide SB Nos. 39331, 39332 dated 07.11.03 as Knitted Socks (Blended) whereas test report confirmed that the socks were made up of Filament Yarn of Polypropylene fibre.
(ix) The product declared viz Knitted Socks (Blended) or socks made up of filament yarn is not eligible for DEPB benefit since the said product is not notified for DEPB rate as per Public Notice No.2 (RE-2003)/2002-2007 dated 31.03.2003. According to Annexure, under the Product Group Textile Products Code 89 only Cotton Socks (Knitted) is notified for DEPB rate against Sl.No.11. As no export shall be allowed under DEPB scheme unless the DEPB rate of the export product notified the DEP Credit is inadmissible in respect of 1,11,240 pieces of Socks exported under the said shipping Bills.
(x) M/s Fairdeal Impex mis-declared the value of socks and Cotton Knitted T shirts with intention to get higher credit under DEPB. The value declared for socks was Rs.86/- per pair whereas PMV ascertained was only Rs.20 and the value declared for Cotton Knitted T Shirt was Rs.248/- whereas the PMV ascertained only Rs.27/- per piece.
(xi) The Marked Value for the 20400 pieces of Knitted T Shirt exported under DEPB Scheme vide Shipping Bill Nos. 39336 and 39337 dated 7.11.03 was only Rs.5,50,800/- against declared value of Rs.50,65,830/-.
(xii) M/s Fairdeal Impex failed to declare the true value of the goods and mis-declared the value and highly over invoicing the following goods exported with intention to get ineligible excess drawback.
(xiii) 36288 pieces of Cotton Knitted Vests at Rs.158/- per piece under Shipping Bill Nos.39334 and 39335 dated 7.11.03 to the total FOB Value of Rs.57,34,410/-. The actual PMV ascertained by the department at Rs.20/- per piece worked out at Rs.7,25,760/-.
(xiv) 10200 pieces Cotton Knitted Top and 10200 pieces cotton Knitted Trousers at Rs.400/- and Rs.300/- per piece respectively were exported under shipping Bill Nos. 39380 and 39381 dated 7.11.03 for the total FOB value of Rs.71,40,000/-. The actual PMV ascertained by the department was Rs.100/- per piece for Tops and Rs.90/- per piece for trousers and the total actual value worked out to Rs.19,38,000/-
(xv) 1560 pieces of Cotton knitted T Shirt with hood and 3540 pieces of Cotton Knitted T Shirt without hood at Rs.390/- for both items were exported under shipping Bill No.39382 dated 7.11.03 to the total FOB value of Rs.19,89,000/-. The actual PMV ascertained by the department was Rs.120/- per piece for Shirt with hood and Rs.110/- per piece for shirt without hood and the total actual value worked out to Rs.5,76,600/-
(xvi) 49800 pieces of 100% Cotton Knitted T-Shirts at Rs.247/50 per piece (excluding shut out quantity 1800 pieces of 15 cartons against declared quantity of 51,600 pieces of 430 cartons) under Shipping Bill Nos.39383, 39384 and 39385 dated 7.11.03 to the total FOB value of Rs.1,23,25,500/- (for 49800 pieces) The actual PMV ascertained by the department was Rs.27/- per piece for 100% Cotton Knitted T Shirt and the total actual value worked out to Rs.13,44,600/- (for 49800 pieces) [39385 It has been referred in the Examination report on Shipping Bill No.39385 Not produced 61 carton] Total FOB value declared for the goods exported Under Drawback Scheme : 2,71,88,910 Total actual/true value proposed to be adopted by the department based on PMV : 45,84,960 Difference in value : 2,26,03,950 M/s Fairdeal Impex thus overvalued the exported goods under Shipping Bill Nos. 39334, 39335, 39380 to 39385 all dated 7.11.03 to the tune of Rs.2,26,03,950/- to get higher drawback benefit by mis-declaring the value with intention to get ineligible excess drawback.
xvii. The Test result of samples of exported goods by M/s. SITRA and Market enquiry conducted in this regard revealed the fact that the goods were highly over-invoiced with intention to get higher credit under DEPB and also to claim excess drawback.
2. According to Revenue, from the above, it appears that the exporter with intention to claim undue pecuniary benefit in the form of DEPB scrips mis-declared the description of export goods as well as the value thereof. Offending goods were over-invoiced to claim DEPB benefit and that on ineligible goods (Knitted Socks-Blended) which is made up of filament yarn of polypropylene fibre and mis-declared the value thereof. It failed to furnish the true value of the goods over invoicing the goods to get higher drawback benefits. Thus contravened the provisions of Section 50 of the Customs Act, 1962 read with Section 2 (41) and 14 of the said Act. They also contravened the provisions of Foreign Trade (Development and Regulations) Act, 1992 and Foreign Trade (Regulation) Rules, 1993 and Export and Import Policy. These violations in turn attracted the provisions of Section 113 (d) and (i) of the Customs Act, 1962 as the exporter attempted to export the goods contrary to law, rendering the goods liable for confiscation and the exporter liable for penal action under Section 114 of the Customs Act, 1962.
3. Revenue submitted that M/s Fairdeal Impex, New Delhi were directed to show cause to the Commissioner of Customs and Central Excise, Coimbatore, 6/7, A.T.D. Street, Race Course Road, Coimbatore-18 as to why-
(i) the DEPB benefit in respect of goods exported under SB Nos. 39331, 39332 and 39333 dated 7.11.03 should not be denied as the exported product was not covered and notified under DEPB Scheme.
(ii) the DEPB credit in respect of Cotton Knitted T Shirt exported under SB Rs. 39336 and 39337 should not be restricted to the extent of 50% Present Market Value ascertained by the Department.
(iii) the FOB value of the goods (Cotton Knitted T Shirt) exported under shipping bill No. 39383, 39384 and 39385 dated 07.11.03 which were highly over valued to Rs.1,23,25,500/- should not be re-determined as Rs.13,44,600/- ascertained by the department and the drawback should not be denied under Section 76 of the Customs Act, 1962 as the market price of the exported goods is less than the amount of drawback due thereon.
(iv) the FOB value of the goods exported under Shipping Bill Nos. 39334, 39335, (Vests) 39380, 39381 and 39382 all dated 07.11.03 which were highly overvalued should not be re-determined as detailed below and the drawback should be allowed accordingly.
Shipping Bill Nos Re-determined Value Declared Value INR INR 39334 and 39335 dt 07.11.03 (Vests) 7,25,760/-
57,34,410 39380 and 39381 dt 07.11.03 (Top and Trousers) 19,38,000/-
71,40,000 39382 dt. 07.11.03 (Cot. Knit T-Shirt with/without Hood) 5,76,600/-
19,89,000
(v) the goods exported under mis-declared description vide shipping bill Nos. 39331, 39332 and 39333 dated 07.11.03 and the goods exported under mis-declared value vide 39336, 39337 dated 07.11.03 (under DEPB) and SB.Nos. 39334, 39335, 39380, 39381, 39382, 39383, 39384 and 39385 dated 07.11.03 (under Drawback) should not be held liable for confiscation under Section 113(d) and (i) of the Customs Act,1962.
(vi) a penalty should not be imposed on them under Section 114 of Customs Act, 1962 for the contravention of the provisions of the above said Act.
4. Ld. DR further explains on each and every part of breach of law made by appellant following questionable modus operandi to over value the goods without any substance, in connivance with the seller of the goods and fabricated invoices were produced to the customs while attempting to export the same. When market enquiry was conducted, the value of the cotton kitted T-shirts declared was Rs. 248/- whereas that was worth Rs.27/- only as per market enquiry. Similarly, the value of the socks was worth Rs.20/- while that was declared as Rs. 86/-. The adjudicating authority examined the composition of the goods and found that spurious goods were attempted to be exported declaring higher value thereof and attempted to export.
5. Entire contention of Revenue is substantiated from the adjudication record itself and also from the market enquiry conducted in respect of the goods attempted to be exported. Appellant failed to discard allegation of Revenue without any cogent evidence.
6. In view of the concurrent findings by the authorities below and evasive practice adopted by the appellant misdeclaring value of export to claim higher DEPB, there is no scope at all to grant relief to appellant. Accordingly, appeal is dismissed.
(Dictated and pronounced in open Court)
(MADHU MOHAN DAMODHAR) (D.N. PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
BB
1