Custom, Excise & Service Tax Tribunal
M/S Pawan Kumar Singh, Kaka Carpets, ... vs Commissioner Of Central Excise ... on 6 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH : ALLAHABAD COURT No. I APPEAL No. C/3593, 3596-3598 & 3792/2012-CU[DB] With MISC Application No. C/MISC/70280 & 70326-70328/2016 (Arising out of Order-in-Original No. 10/RKB/CCE/NCH/2012 dated 28/06/2012 passed by Commissioner of Central Excise (Adjudication), New Delhi) For approval and signature: Honble Mr. Anil Choudhary, Member (Judicial) and Honble Mr. Anil G. Shakkarwar, Member (Technical) ======================================================
1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3. Whether their Lordships wish to see the fair copy of the order?
Seen
4. Whether order is to be circulated to the Department Authorities?
Yes ====================================================== M/s Pawan Kumar Singh, Kaka Carpets, Yadavendra Kumar Roy, Rita Roy, & S.K. Vishwakarma Appellant Vs. Commissioner of Central Excise (Adjudication), New Custom House Near IGI Airport, New Delhi. Respondent Appearance:
Shri Sujay N. Kantawala, (Adv.) with Shri Sanjay Kumar (Adv.) in Appeal No. C/3596-3598/2012 & Shri Atul Gupta (Adv.) in Appeal No. C/3792/2012for Appellant Shri Rajeev Ranjan, Joint Commissioner (AR), for Respondent CORAM:
Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. Anil G. Shakkarwar, Member (Technical) Date of Hearing & Date of Decision: 06/10/2010 FINAL ORDER NO. 71036-71040/2016 Per: Anil G. Shakkarwar All the appellants were issued with a common Show Cause Notice bearing No. DRI/LZU/LRU/SEIZ/23/08/3755 dated 16-02-2010 & common Adjudication Order was passed therefore, above stated appeals are taken together for decision.
2. Brief facts of the case are that the M/s Kaka Carpets presented three Shipping Bills bearing Nos. 702/DBK//2008, 703/DBK/2008 & 704/DBK/2008, all dated 07/06/2008, under claim for drawback for export of commodity Indian Hand Knotted Woollen Carpets with ICD, Bhadohi which was functioning under the overall control of Commissioner of Central Excise, Allahabad. As per the declaration under the said Shipping Bills there were total 1011 rolls of carpets put together in said three Shipping Bills. Thus, three Shipping Bills put together had declared FOB value of Rs.2,45,11,179/-. The invoices connected with the said Shipping Bills are respectively 1514/2008, 1515/2008 & 1516/2008, all dated 04/04/2008. The said Shipping Bills were assessed at ICD, Bhadohi and the examination was conducted by Superintendent, ICD, Bhadohi & cleared by him by giving let export order. The consignment was carried in Container No. ESPU-8012774. The said container contained the goods covered by said three Shipping Bills and it was cleared by ICD, Bhadohi on 07/06/2008 and the gateway port for the said container was JNPT, Nhava Sheva. The custodian at ICD, Bhadohi was CWC. On 20-06-2008 the said container lying at Hind Terminals, CFS, Nhava Sheva was opened by DRI Officers of JNPT, Nhava Sheva in presence of two independent witness, partner of M/s Kaka Carpets and representative of Shipping line M/s Emirates Shipping line. At the time of opening of the said container on 20-06-2008 the container was having Customs bottle Seal No. 003759 affixed on it which was found to be intact in the presence of Panchas. The said seal was broken and then the doors of the containers were opened. It was noticed that the container was stacked with rolls of carpets packed in polythene bags. The said rolls of carpet in polythene bags were unloaded and it was requested by the representative of M/s Kaka Carpets that after the examination of 1011 rolls of carpets it would be difficult to repack them without the help of skilled manpower. The goods were once again re-stuffed in the same container and the container was re-sealed with bottle seal No. 043186 on 20-06-2008. On 24-06-2008 Officers of DRI, Lucknow in presence of Panchas, representative of shipping line M/s Emirates Shipping line and representative of M/s Kaka Carpets verified the bottles seal No. 043186 affixed to Container No. EPSU-8012774 which was found to be intact and subsequently the said bottle seal was broken and contents were unloaded. The officers opened and examined 322 rolls of carpets and samples from the carpets were drawn then it was decided to examine the remaining cargo on the next day i.e. 25-06-2008. Thereafter, another container was arranged for stacking of examined cargo. The examined 322 rolls of carpets were stuffed in container were stuffed in the Container No. TGHU-0617350 on 24-06-2008 and bottle seal No. 009573 was used to seal the said 20 ft. container. The cargo left to be examined was again allowed to remain in Container No. ESPU-8012774 and it was sealed by use of bottle seal No. 009572 on 24-06-2008. On 25-06-2008 in presence of same Panchas who were presented on 24-06-2008 for opening the container were again present on 25-06-2008, in presence of said Panchas, in presence of representative of M/s Kaka Carpets and that of Shipping line DRI Officers again open the Container No. ESPU-8012774 examined and found 626 rolls of carpet in the said container. They took measurement of all the rolls and size declared in the packing list was compared with measurement taken by them. They came to a conclusion that total no. (626+322) of carpet rolls were found in the container which was dispatched from ICD, Bhadohi. They also took measurement of carpets representing all the three Shipping Bills. Subsequently, they have carried out investigation on four aspects:- (i) The value declared by the exporter in respect of goods presented for export through said three Shipping Bills dated 07-06-2008, (ii) Total Square meters of carpets declared in respect of goods presented for export through said three Shipping Bills No. 702,703 & 704 all dated 07-06-2008 (iii) Value of similar goods exported for the period from 2004-05 to 2008-09 to examine whether drawback already disbursed was in excess of their admissibility, (iv) The role of the officers who were assigned the duty of examination, assessment and clearance of export cargo.
3. On the basis of actual counting of carpets on 24 & 25-06-2008, it appeared to Revenue that 63 rolls out of 1011 rolls of carpet declared to have been presented for export through Shipping Bills No. 702,703 & 704 all dated 07-06-2008 were short.
4. On the basis of samples drawn during examination of carpets on 24 & 25-06-2008 market enquiries were conducted by DRI Officers and it appeared to them that when they arrived at value of goods declared in said Shipping Bills determined under Rule 5 of Customs Valuation (Determination of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962, the value should have been Rs.6,47,173/- in respect of said Shipping Bill No.702/DBK/2008 instead of declared FOB value of Rs.790398.24/-. It appeared to Revenue that in a similar manner the value determined in respect of Shipping Bill No. 703/DBK/2008 was Rs.11,95,603/- in place of declared FOB value of Rs.83,06,306/-. Further in respect of Shipping Bill No. 704/DBK/2008 it appeared to Revenue that FOB value determined was Rs.10,61,196/- as against the declared FOB value of Rs.82,76,621.94/-. It, therefore, appeared to Revenue that drawback claimed by M/s Kaka Carpets in said three Shipping Bills respectively as Rs.10,54,016/-, Rs.11,04,300/- & 11,00,700/- was more than their admissibility.
5. On the basis of market enquiries about quality and value of carpets exported by M/s Kaka Carpets, it appeared to Revenue by invoking provisions of Rule 5 the Customs (Valuation of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 to the goods already exported from 02-02-2004 to 24-06-2008, the value declared by M/s Kaka Carpets in various Shipping Bills from 02-02-2004 to 24-06-2008 where the goods were already exported was Rs.1,59,66,35,071/- on which total drawback already disbursed was Rs.16,93,96,338/- on the basis of their investigation and by invoking the provisions of Section 14 of the Customs Act, 1962 on the goods exported from 02-02-2004 to 24-06-2008, it appeared to Revenue that the correct FOB value should have been Rs.53,91,27,749/- and appropriate drawback which was apparently admissible to M/s Kaka Carpets on the basis of such FOB value arrived at by invoking said Section 14 of the Customs Act, 1962 on goods already exported was to be Rs.4,93,16,928/- and it appeared to Revenue that excess drawback to the tune of Rs.12,00,79,410/- was disbursed to M/s Kaka Carpets from 02-02-2004 to 24-06-2008.
6. The DRI Officers also examined the role played by officers who examined the goods presented through the said three Shipping Bills dated 07-06-2008. The said Shipping Bills were assessed by Shri Rajendra Kumar, Superintendent. The said Shipping Bills were processed by Shri Ajay Shukla, Inspector. The goods in respect of said Shipping Bills were examined by Shri Pawan Kumar Singh, Superintendent who also issued Let Export order. Further, Shri S.K. Vishwakarma, Inspector had taken part in the stuffing of the export goods in the container and was involved in the examination of goods presented for export through the said three Shipping Bills. It appeared to Revenue that Shree Rajeev Ranjan, Assistant Commissioner, ICD Customs, Bhadohi failed to discharge his duties sincerely and hence became liable to penalty under Section 114 of Customs Act, 1962.
7. It appeared to Revenue that Shri Pawan Kumar Singh, Superintendent scrutinized Examination Order, Examination Report, Shipping Bills, Invoices & other documents and stuffing conducted was under his supervision in the presence of CWC Officers, representatives of shipping line and exporter. It appeared to Revenue, further, that export was permitted by Shri Pawan Kumar Singh, Superintendent after superficial examination of documents only and thus he failed to discharge his duties. Further, in respect of Shri S.K. Vishwarkarma , Inspector; it appeared to Revenue that Shri S.K. Vishwarkarma did not follow the circular and instructions issued from time to time and export was permitted after superficial examination only and, therefore, he failed to discharge his duties. Similarly, it appeared to Revenue that Shri Ajay Shukla, Inspector failed to discharge his duties of proper appraisal of the Shipping Bills in question.
8. On the basis of above stated investigations said Show Cause Notice dated 16-02-2010 was issued which had following proposals:- (i) Why the goods covered by Shipping Bill Nos. 702, 703, 704/DBK/2008 all dated 07-06-2008 should not be confiscated under section 113(i), 113(ii) and 113(d) of Customs Act, 1962 for attempting improper exportation by resorting to misdeclaration in respect to material particulars like- quantity, description, value and drawback amount furnished in the said Shipping Bills, (ii) Why value of the export goods covered by said three Shipping Bills should not be determined in accordance with the provisions of Rule 5 of Customs (Valuation of Export Goods) Rules, 2007 and why P.M.V./F.O.B. value of said export goods should not be determined at Rs.6,47,173/-, Rs.11,95,603/- Rs.16,01,196/- respectively, (iii) why drawback amount of Rs.10,54,010/- claimed against Shipping Bill No. 702 should not be disallowed in terms of Section 76 (1)(b) as the present Market value of the export goods is Rs.6,47,173/- which is lower than the drawback amount claimed in the said Shipping Bill, (iv) Why drawback amount admissible in respect of said Shipping Bill No. 703 & 704 respectively should not be arrived at Rs.1,59,015/- and Rs.2,12,959/- and why assessment of goods by said Shipping Bills should not be finalized at F.O.B. value of Rs.11,95,603/- & Rs.16,01,196/- respectively and why excess amount of drawback of Rs.18,23,026/- should not be disallowed, (v) Why value of the exported goods during the period from 02-02-2004 to 24-06-2008 should not be determined in accordance with the provisions contained in Section 14 of Customs Act, 1962 and Rule 5 of Customs (Valuation of Export Goods) Rules, 2007 and why F.O.B. value of the said exported goods should not be determined as Rs.5,03,34,314/-, (vi) Why drawback already disbursed for the period from 02-02-2004 to 24-06-2008 should not be re-determined at Rs.54,59,285/- on the basis of F.O.B. value of Rs.5,03,34,314/- and excess drawback of Rs.1,37,91,203/- (1,92,50,488/- - Rs.54,59,285/-) should not be disallowed and recovered in terms of Sub-Section 1 of Section 75 of Customs Act, 1962 read with Customs, Central Excise duties & Service Tax Drawback Rules, 1995 and why interest in terms of Section 75A(2) of said Rules should not be recovered, (vii) Why penalty under Section 114(iii) & Section114AA of the Act should not be imposed on M/s Kaka Carpets, Yadavendra Kumar Roy, partner of M/s Kaka Carpets and Smt. Rita Roy partner of M/s Kaka Carpets (viii) why Bank Guarantee of Rs. 20 lacs & 50 lacs furnished by M/s Kaka Carpets in respect of provisional release of seized goods and for release of drawback amount of Rs.1.38 in respect of past exports should not appropriated and adjusted against dues, (ix) Why penalty under Section 114 of Customs act, 1962 should not be imposed on Shri Birendra Singh, Manager; Shri Rajendra Kumar, Superintendent; Shri Pawan Kumar Singh, Superintendent; Shri Ajay Shukla, Inspector; Shri S.K. Vishwarkarma, Inspector; M/s Kataria Carriers; M/s Cleared Shipping Forwarders and Shri Rajeev Ranjan, Assistant commissioner, (x) Why value of the export goods exported during the period from 02-02-2004 to 24-06-2008 covered by Annexure-8 of said Show Cause Notice should not be determined at Rs.48,30,47,470/- under Rule 5 of Customs (Valuation of Export Goods) Rules, 2007 and Section 14 of Customs Act, 1962, (xi) why drawback amount admissible should not be determined at Rs.4,34,46,504/- on F.O.B. value of Rs.48,30,47,470/- and why excess drawback of Rs.10,60,14,744/- should not be recovered in terms of Section 75(1) of Customs Act, 1962 read with Customs, Central Excise duties & Service Tax Drawback Rules, 1995 and why interest should not be recovered under Section 75A(2) of Customs Act, 1962, (xii) Why value of the goods exported during 29-07-2004 to 16-06-2008 covered by Shipping Bills Shown in the Chart at Annexure-IX the said Show Cause Notice should not be determined at Rs.57,45,965/- under Rule 5 of Customs (Valuation of Export Goods) Rules, 2007 and Section 14 of Customs Act, 1962, (xiii) Why drawback should not be determined at Rs.4,11,139/- on FOB value of Rs.57,45,965/- and why excess drawback of Rs.2,73,463/- should not be disallowed in terms of Section 75(1) of Customs Act, 1962 read with Customs, Central Excise duties & Service Tax Drawback Rules, 1995 and why interest on the same should not be recovered in terms of Section 75A(2) of Customs Act, 1962.
9. Before the Original Authority, it was submitted that on behalf of the M/s Kaka Carpets and two partners Mr. Y.K. Roy and Mrs. Rita Roy as follows;- (a) In respect of past clearances the declared value was endorsed by proper officer as is evident from the assessed respective Shipping Bills and the entire export proceeds for the goods exported have been duly received through designated authorized agents which have been duly certified by the concerned bank. (b) The four stray invoices relied upon (RUD 93) in the Show Cause Notice in support of the allegation of overvaluation of the goods have not evidentiary value and do not demonstrate the incorrectness of the declared values. (c) The prices of the carpet, a handicraft material, fluctuate enormously depending on design, variety, quality of the raw material used, wastage percentage of the raw materials used. (d) The information collected from the alleged representative manufacturers and exporters of carpet is not creditable since the basis for such information was not disclosed by the said alleged representative exporters of carpet. (e) The Test Report of IICT, Bhadohi was issued as the samples drawn from three Shipping Bills and it cannot be relied upon in respect of goods which were exported in the past. (f) Section 76(1)(b) provides that no drawback shall be allowed in respect of any goods the market price of which is less than the amount of drawback due thereon. The said provision is not applicable in their case because the purported market enquiry to determine PMV is patently erroneous. (g) In respect of shortage of 63 rolls it was stated at the time of examination of goods in ICD, Bhadohi no discrepancies were noticed and that at the time of sealing of container at ICD, Bhadohi, containers contained 1011 rolls. (h) All the payments were made to and received by the parties were through account payee cheques & RTGS fund transfer. If carpet is supplied to buyer A and if he supplies the carpets to buyer B, then buyer B gives Weschel to buyer A and the same Weschel is endorsed by buyer A on the backside and buyer A handover it to the supplier of the goods that is noticee. The payment for the goods supplied stands effected by buyer A when such Weschel is presented by exporters bank to the buyers bank and buyers bank honours the same and releases payment which is received and credited in exporters account.
10 Shri Pawan Kumar Singh, Superintendent submitted before the Original Authority that the allegations against him in para 113 of impugned Show Cause Notice were denied by him and further submitted as follows:-
(a) His implication in the instant case on the basis of presumption that the examination carried out was superficial was incorrect and he performed his duties with utmost diligence and in accordance with the practice that was followed for examination of such goods in the said ICD, Bhadohi.
(b) He has further submitted that nobody has implicated him to establish that he was involved in the alleged fraud or to indicate that he even had knowledge of the same.
(c) He has further submitted that there was no allegation in the Show Cause Notice that he received any pecuniary consideration. He has further submitted that it was held in case of A.P. Sales Versus Commissioner of Customs, Hyderabad reported at 2006 (198) E.L.T. 309 (Tri. Bangalore) that if the Officer is found to be involved in dereliction of duty penalty under Section 114 of Customs Act, 1962 is not imposable on him.
11. Shri S.K. Vishwakarma, Inspector submitted before the Original Authority that the Show Cause Notice has wrongly applied provisions of Section 114 of Customs Act, 1962 and that under the said section penalty can be imposed on attempt to improper export and only on confiscation of goods under Section 113 of Customs Act, 1962. He has further submitted that the numbers of roll received were acknowledged on the Shipping Bills and orally ascertained by the said Assistant of CWC. As per the practice the accounting and staking of carpets was duty and responsibility of CWC and that he has accepted the figures entered in the Shipping Bill as correct and true. He has further submitted that on 20-06-2008 when the seal of the subject container ESPU-8012774 was broken to open the container, the rolls of carpet contain therein were not counted. The shortage of 63 rolls was detected at a subsequent date to the date of opening of the container which was sealed at ICD, Bhadohi.
12. The Original Authority did not appreciate any of the submissions made by above stated noticees.
13. The Original Authority has accepted all the allegations against M/s Kaka Carpets and Mrs. Rita Roy. In respect of Shri Pawan Kumar Singh, Superintendent the finding of the Original Authority is that Shri Pawan did not discharge his duty properly. He has further observed that had Shri Pawan Kumar Singh discharge his duties properly, wrongly claimed drawback could have been detected and that his inaction Shri Pawan Kumar Singh allowed the misdeclared goods to be loaded.
14. In respect of Shri S.K. Vishwakarma Original Authority held that had Shri S.K. Vishwakarma discharged his duty properly, the fraud perpetrated by exporter would not have gone undetected and that by his inaction, Shri S.K. Vishwakarma allowed the goods to be loaded.
15. On the basis of findings the Original Authority has passed the order which is reproduced below:-
(i) I order rejection of FOB value of Rs.2,45,11,179/- declared by the exporter in the Shipping Bills No. 702,703 & 704 all dated 07-06-2008 as per the provisions contained in Explanation (iii) of Rule 8 of Customs (Determination of Price of Export Goods) read with clause (iii) of the second proviso to Section 14 of the Customs Act, 1962.
(ii) I order re-determination of FOB value of exported goods covered by Shipping Bills No. 702,703 & 704 all dated 07-06-2008 in accordance with the provisions contained in Rule 4 to 6 of Customs (Valuation of Export Goods) Rules, 2007 as Rs.34,43,972/- (Rupees Thirty Forty Lacs Forty Three Thousand Nine Hundred Seventy Two only) by resorting to Rule 5 Computed Value method of the Valuation Rules, 2007.
(iii) I order to disallow drawback amount of Rs.32,59,016/- (Rupees Thirty Two Lacs Fifty Nine Thousand and Sixteen only) as claimed by the exporter on the Shipping Bills No. 702,703 & 704 all dated 07-06-2008 in terms of Section 76(1) (b) of the Customs Act, 1962.
(iv) I order confiscation of carpets exported vide Shipping Bills No. 702,703 & 704 all dated 07-06-2008 with a declared FOB value of Rs.2,45,11,179/- under claim of drawback of Rs.32,59,016/- under Section 113(i), 113(ii) & 113(d) of the Customs act, 1962 for being attempted to be improperly exported in contravention of the provisions of Section 11, Section 14, Section 50(2) and Section 75 of the Customs Act, 1962 read with Customs, Central Excise Duties & Service tax Drawback Rules, 1995 & Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and Rule 11 of foreign trade Regulations, 1993. Since the goods were released provisionally, the same are allowed to be redeemed on payment of redemption fine of Rs.10,00,000/- ( Rupees Ten Lacs Only) in lieu of confiscation thereof.
(v) I order rejection of FOB value of Rs. 1,59,66,35,071/- (Rupees One Fifty Nine Crores Sixty Six Lacs Thirty Five Thousand and Seventy One only) declared by the exporter in respect of exports made during the year 2004-05 to 2008-09 as per the provisions contained in Explanation (iii) of the second proviso to Section 14 of the Customs Act, 1962.
(vi) I order the re-determination of FOB value of goods exported during the year 2004-05 to 2008-09 at Rs.53,91,27,751/- (Rupees Fifty Three Crores Ninety One Lacs Twenty Seven Thousand Seven Hundred fifty One only) in accordance with the provisions contained in Rule 4 to 6 of the Customs (Valuation of Export Goods) Rules, 2007.
(vii) I reject the drawback amount of Rs.16,93,96,338/- (Rupees Sixteen Crores Ninety Three Lacs Ninety Six Thousand Three hundred Thirty Eight only) as claimed by the exporter on the goods exported during the period 2004-05 to 2008-09 in terms of Section 76(1)(b) of the Customs Act, 1962.
(viii) I hold the drawback admissible on the goods exported during the period 2004-05 to 2008-09 is hereby calculated at Rs.4,93,16,928/- (Rupees Four Crores ninety Three Lacs Sixteen Thousand Nine Hundred Twenty Eight only).
(ix) I order that the drawback amount of Rs.12,00,79,410/- (Rupees Twelve Crores Seventy Nine Thousand Forty Hundred ten only) paid in excess than actually due, to be recovered under the provisions of Section 75 of Customs act, 1962 read with Customs, Central Excise Duties & Service Tax Drawback Rules, 1995. The interest on the excess availed drawback is also liable to be recovered in terms of Section 75A(2) of the Customs Act, 1962.
(x) I order confiscation of the carpets valued at Rs.1,59,66,35,071/- involving drawback amount of Rs.16,93,96,338/- exported during the period from 2004-05 to 2008-09 from various ports viz. JNPT, Nhava Sheva, Mumbai; ICD, Bhadohi & Air cargo Complex, IGI Airport, New Delhi as they did not correspond in material particulars viz. quantity, quality and value furnished by the exporter i.e. M/s Kaka Carpets on the shipping bills. However, as the goods are not physically available, I refrain from imposing any redemption file in lieu of confiscation.
(xi) I impose a penalty of Rs.5,00,00,000/- (Rupees Five Crores only) on M/s Kaka Carpets under section 114(iii) of the Customs act, 1962 for contravention of aforesaid provisions.
(xii) I impose a penalty of Rs.1,00,00,000/- (Rupees One Crore only) each on Mr. Y.K. Roy & Mrs. Rita Roy, Partners under Section 114(iii) & 114AA of the Customs Act, 1962 for being personally liable for their role in improper exportation and furnishing false declaration in contravention of aforesaid provisions.
(xiii) I order enforcement of Bank Guarantees of Rs. 20 lacs and Rs. 50 lacs furnished against provisional release of the export goods covered under Shipping Bills No. 702,703 & 704 all dated 07-06-2008 and further order appropriation of the same towards recovery of inadmissible drawback amount of Rs.12,00,79,410/- paid on the past exports, redemption fine and personal penalties imposed on M/s Kaka Carpets and it s two partners.
(xiv) I drop the proceedings against Mr. Rajiv Ranjan, the then Assistant Commissioner, as the charges levelled against him is not substantiated and does not stand proved.
(xv) I also drop the proceedings against Mr. Rajender Kumar, Superintendent and Mr. Ajay Shukla, Inspector as the Show Cause Notice does not indicate any specific omissions or commissions which would make them liable for penal action under Section 114 of the Customs act, 1962.
(xvi) I impose a penalty of Rs.1,00,000/- (Rupees One Lac only) each on Mr. Pawan Kumar Singh, Superintendent and Mr. S.K. Vishkarma, Inspector under Section 114 of the Customs Act, 1962 for their acts of omission and commission which rendered the exported goods liable to confiscation.
(xvii) I also drop the proceedings against Mr. Birendra Singh, Manager, Central Warehousing Corporation, ICD: Bhadohi, M/s Clearship Forwarders (P) Ltd. & M/s Kataria Carriers as they have not violated any provisions of Customs Act, 1962.
16. Aggrieved by the said Order-in-Original the appellants have filed these appeals before this Tribunal.
17. Heard the ld. Counsel for M/s Kaka Carpets, Yadavendra Kumar Roy & Mrs. Rita Roy. He has submitted that the Original Authority has summarized the issues involved in this case at Para 200 of impugned order and further submitted that when the goods were sealed at ICD, Bhadohi there was no shortage of goods he has further submitted that the market enquiries which were carried out were not from reputed exporters. Further, the market of the goods was in Dubai still the prices that the goods fetch in Dubai were never enquired into. On the basis of enquires made at the place of manufacture, the prices at the place of sale cannot be ascertained. So far as the past clearances from 02-02-2004 to 24-06-2008 are covered the value of the goods exported was assessed, the goods were exported, drawback claimed was found to be admissible, the export proceeds were received and therefore, there is no reason to reopen the assessment of goods exported during the past period. In respect of the goods under seizure, he has submitted that Page 75 of the Show Cause Notice takes cognizance of the same wherein it is stated that out of the declared value of Rs.2.45 crore since after resealing and export of consignment with 63 rolls less than the declared rolls, the export proceeds received by the exporter were around Rs.2.15 crore which establishes that the valuation alleged in the Show Cause Notice is totally unfounded. Rs.30 lakhs less received compared to the declared FOB value was on account of non-export of 63 rolls of carpet. He has further prays for disbursement of drawback involved in said three Shipping Bills bearing No. 702, 703 & 704. He has further relied on this Tribunal Final Order Nos. A/490-498/2007 in the case of Tex-Age Versus Commissioner of Customs (Exports), Nhava Sheva reported at 2008 (221) E.L.T. 395 (Tri. Mumbai) and submitted that in the said case law it has been held that when there are no allegations made that remittances by foreign firms were made from their own pockets or proprietor of those firms were under control of exporters and that ultimately the issue was carried before Honble Supreme Court of India which was decided in Civil Appeal No. 4465-4473/2008 through its ruling dated 05-09-2016 wherein the Honble Supreme Court has observed that the perusal of the judgment of CESTAT shows that the entire material placed before it has been discussed and on that basis, a finding of fact arrived at to the extent that the allegations of flow back of the remittances by way of Hawala could not be proved by the Department and that it was further recorded by CESTAT that the invoices etc which were raised of particular amounts were duly checked by the Department at the time when the exports were being made and that the entire amount as reflected in the said invoices was received by the exporters and in view of such finding of fact and in the absence of any evidence to show that the money was remitted by way of Hawala, the Honble Supreme Court has held that the case of over-invoicing has not been established by the Department. He has further submitted that out of Rs.2.45 crore FOB value declared in the said three Shipping Bills as stated at para 17 (Supra) Rs.2.15 crore was realized and the bank realization certificate for same were also available and that the short payment of 30 lakhs was on account of short delivery of goods to the extent of 63 rolls of carpet. He, further, submitted that the allegations in the Show Cause Notice in Page 76, that Rs.35.90 lakh more remittance was received were neither supported by any evidence nor any further proceedings were initiated in respect of the same.
18. The ld. Counsel, Shri Piyush Kumar, Advocate representing Shri Pawan Kumar Singh, Superintendent submitted as follows:-
(a) The Panchnama was made and the measurements were recorded by the DRI Officers in the presence of their chosen witness behind the back of Shri Pawan Kumar Singh, who was the officer of the ICD, Bhadohi and that the Panchnama is the sole evidence for making allegations of shortage, and the same cannot be construed as evidence sufficient to confirm the charge of less quantity or allegation of negligence on the part of Shri Pawan Kumar Singh.
(b) In the instant case, the examination was carried out by the examining Officer who found the goods to be in order had endorsed the report to that effect on the reverse of the Shipping Bills and on the basis of that report Shri Pawan Singh has countersigned and granted Let Export. Therefore, it is erroneous to hold that Shri Pawan Kumar Singh was negligent in his duties.
(c) The Investigating Officer had examined a number of persons concerned with clearance of the consignment and none of them have given any statement in respect of Shri Pawan Kumar Singh indicating that Shri Pawan Kumar Singh was remotely aware of any misdeclaration or he had connived with the exporters and that there were no allegations about the pecuniary gain by Shri Pawan Kumar Singh in the whole case.
(d) There is no provisions in Section 114 of the Customs Act, 1962 for imposition of penalty for dereliction of duty and failure to perform duty efficiently and relied upon various Final Orders issued by this Tribunal such as in the case of Harvinder Singh Versus Commissioner of Customs (Exports), Mumbai reported at 2015 (328) E.L.T. 512 (Tri. Mumbai), A.P. Sales Versus Commissioner of Customs, Hyderabad 2006 (198) E.L.T. 309 (Tri. Bangalore), Commissioner of Customs, New Delhi Versus M.I. Khan reported at 2000 (120) E.L.T. 542 (Tribunal) & Parvathy Kailasam Versus Commissioner of Central Excise, Tirupathi reported at 2010 (258) E.L.T. 405 (Tri. Bangalore).
19. The ld. Counsel for S.K. Vishwakarma submitted that when the container No. ESPU-8012774 was opened on 20-06-2008 the seal which was fixed on the said container at ICD, Bhadohi was broken but immediately the counting of the said goods contained therein was not taken up. The said container was once again resealed by bottle seal in the absence of Shri S.K. Vishwakarma but in the presence of representative of exporter. The said container was once again opened on 24-06-2008 in order to examine the goods. The container with leftover cargo was once again sealed i.e. the container through which goods had been transported from ICD, Bhadohi to Nhava Sheva. Further, once again the container was opened on 25-06-2008 and the Panch witnesses who witness the proceedings on 24-06-2008 were the Panch witnesses who witness the proceedings on 25-06-2008 at Nhava Sheva Port and or all the three occasions such as 20-06-2008, 24-06-2008 & 25-06-2008, Shri S.K. Vishwakarma was not called when the goods were counted, and therefore he is not responsible for shortage of goods after several times goods stuffed & de-stuffed from one container to another. He has further submitted that had the container been intercepted immediately after it left the control of Shri S.K. Vishwakarma and had such shortage was found then only he was responsible for negligence of his duty. The ld. Counsel relied on various case laws such as Sunshine Overseas Versus Commissioner of Customs & Central Excise, Daman Vapi reported at 2011 (263) E.L.T. 617 (Tri. Ahmedabad) which was affirmed by the Honble Gujarat High Court as reported at 2013 (296) E.L.T. A122 (Gujarat).
20. The ld. Joint Commissioner for Revenue has supported the Order-in-Original No. 10/RKB/CCE/NCH/2012 dated 28-06-2012.
21. We have taken rival contentions into consideration. We find that there are four aspects in the investigation and adjudication of this case.
(i) Assessment of goods presented for export through said Shipping Bills bearing No. 702, 703 & 704.
(ii) Shortage of goods found in the container on 25-06-2008 at Gate Way Port.
(iii) Valuation of goods already exported and recovery of disbursed drawback in respect of them &
(iv) Personal penalty imposed on Departmental Officers.
22. We find from various submissions as stated above that the container was not inspected immediately after it was removed from ICD, Bhadohi. The counting of the contents of container was carried out much later after eighteen days of container being out of the control of Officers. For counting contents of the goods at the Gate Way Port several times it was reopened, resealed, & shifted from one container to another. Therefore, it cannot be established beyond doubt that the goods stuffed in containers at the time of sealing of container at ICD, Bhadohi were less than that declared in the said Shipping Bills. The fact also has emerged that when the goods were actually exported after provisional release Overseas importer received 63 rolls less than that declared in the said three Shipping Bills but the valuation of the goods exported through said three Shipping Bills was not reduced by the importer but the less payment by the Sunshine Overseas importer was on account of short delivery of goods. Therefore, the market enquiries conducted in respect of goods which were exported through the said three Shipping Bills is not established to be correct since importer in foreign country has remitted full amount for the quantity received. Further, we find that for the valuation of goods which were exported from 02-02-2004 to 24-06-2008, the Show Cause Notice has resorted to Section 14 of Customs Act, 1962. Section 14 of Customs Act, 1962 empowers valuation of export goods and export goods is defined at Clause 19 of Section 2 of Customs Act, 1962 as the goods which are to be taken out of India to a place outside India. It clearly establishes that the goods which are presented for export are export goods and goods which are exported do not satisfy the definition of export goods. Therefore, provisions of Section 14 of Customs Act, 1962 are not applicable to goods which have already left the shore of Indian Territory and the export of which has already taken place. Therefore, we hold that all the allegations and findings in respect of goods which were exported during the period from 02-02-2004 to 24-06-2008 are totally unsustainable. We also find that the penalty under Section 114 of Customs Act, 1962 cannot be imposed for dereliction duty on the part of the Officers. We, therefore, hold that penalty imposed on Shri Pawan Kumar Singh & Shri S.K. Vishwakarma is not sustainable. We, therefore, hold that it could not be established that at the time of export of goods from ICD, Bhadohi the exporter misdeclared the goods and therefore we hold that penalty imposed on exporter and its Partners Mr. Yadavendra Kumar Roy & Mrs. Rita Roy is also not sustainable. The only issue now remain is about disbursement of drawback involved in the said three Shipping Bills. We, therefore, remand the case to drawback disbursement Authority with a direction to take into account export of the goods really taken place and total remittance that is received for the quantity of goods exported and allow drawback as per provisions of law. We set aside the remaining part of the Order-in-Original impugned and remand to the drawback disbursement Authority for disbursal of drawback on the goods exported through said Shipping Bill No. 702/703/704/DBK/2008 all dated 07-06-2008 on the basis of actual quantity of export and on the basis of actual foreign exchange realized as per the provisions of law. The appellants shall be entitled for all consequential relief, in accordance with law. Four Miscellaneous Application bearing Nos. 70280/2016, 70326/2016, 70327/2016 & 70328/2016 also stand disposed of as infructuous.
(Dictated and pronounced in Court)
Sd/- Sd/-
(Anil Choudhary)
Member (Judicial)
(Anil G. Shakkarwar)
Member (Technical)
Ansari
1
2
ST Appeal Nos. 3593, 3596-3598 &
3792/12
MISC Application Nos. 70280 & 70326- 70328/2016