Custom, Excise & Service Tax Tribunal
Sea Impex vs Nhava Sheve - Ii on 17 August, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Single Member Bench
Customs Appeal No. 88029 of 2019
(Arising out of Order-in-Appeal No. 127 to 130 (DBK)/2019/(JNCH)/Appeal-I
dated 06.06.2019 passed by the Commissioner of Customs (Appeals), JNCH,
Nhava Sheva, Mumbai-II)
M/s. Sea Impex Appellant
Mohalla Dehirya Chowk,
Gokul Dass Road, Moradabad,
U.P. 244 001.
Vs.
Commissioner of Customs, Nhava Sheva-II Respondent
Jawaharlal Nehru Custom House, Nhava Sheva, Dist. Raigad 400 707.
Appearance:
None for the Appellant Shri S.K. Hatangadi, Assistant Commissioner, Authorised Representative for the Respondent CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Date of Hearing: 17.08.2022 Date of Decision: 17.08.2022 FINAL ORDER NO. A/85852/2022 This appeal has been filed against order-in-appeal No 127 to 130 (DBK)/2019/JNCH/Appeal-I dated 06.06.2019 of the Commissioner of Customs (Appeals), Nhava Sheva, Mumbai-II. By the impugned order, following has been held:-
"6.18 Accordingly, the Order-in-Original No. 537/2018-
19/ADC/NS-II/CAC/JNCH dated 26.07.2018 passed by the Joint Commissioner of Customs, Drawback, NS-II, JNCH, Nhava Sheva is upheld as far as the appellants are concerned with the following modifications:
i) The penalty of Rs 1,00,000/-imposed on Ms Nammo, Proprietor of M/s. Sea Impex in terms of section 114 (ii) of the Customs Act, 1962 at para 27 (vii) of the operative part of the Order-in-Original 537/2018-19/ADC/NS-II/CAC/JNCH dated 26.07.2018 is set aside.
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ii) The penalty of Rs 50,000/-imposed on Sh K D Thakkar, Proprietor of M/s. K. D. Thakkar in Thakkar, Proprietor of M/s. K. D. Thakkar in terms of Section 158(2) of the Customs Act, 1962 at para 28) of the operative part of the Order-in-Original 537/2018-19/ADC/NS-II/CAC/JNCH dated 26.07.2018 is set aside.
iii) The penalty of Rs 10,000/-imposed on Pandurang Ingle, employee of M/s Kishor Doongarshi Thakkar in terms of Section 158(2) of the Customs Act. 1962 at para 27 (xiv) of the operative part of the Order-in-Original 537/2018-19/ADC/NS- /CAC/JNCH dated 26.07.2018 is set aside.
iv) The penalty of Rs 10,000/-imposed on Uday Dattaram Rasal, employee of M/s. K. D. Thakkar in terms of Section 158(2) of the Customs Act, 1962 at para 27 (xvii) of the operative part of the Order-in-Original 537/2018-19/ADC/NS-II/CAC/UNCH dated 26.07.2018 is set aside.
7. Accordingly, the Appeal Nos. 152/2018, 1284/2018, 153/2018 and 1283/2018 of M/s Sea Impex and Shri K D Thakkar, Proprietor of M/s. K. D. Thakkar, Shri Pandurang Ingle, Shri Uday Rasal are partly allowed in above terms."
2.1 Appellant had filed Shipping Bill No 8854489 dated 23.09.2017 for export of items declared as Brass Pankutty, Brass Deco Tea Pot and Iron Basket for declared FOB value of Rs.21,34,536.04 under drawback and MEIS scheme. They claimed drawback benefit of Rs.2,28,358.21 and MEIS benefit of Rs 42,288.55. On examination it was found that:-
"For item no 1- Brass Artware Pankutty S/3 pcs set containing total 62 cartons, out of these 46 cartons (Sr No 17 to 62) of Brass Artware Pankutty were Not Found, however, another undeclared Cartons containing "Glass marbles" were found, and the rest of the cargo was found as per declaration on the shipping bill."
2.2 For the said misdeclaration the goods were seized under Panchanama and the samples drawn for further inquiries and investigation.
2.3 During the course of investigations it was also found that appellant had vide Shipping Bill No 4781229/ 16.03.2017, 4781859/ 16.03.2017, 8165126/ 22.08.2017 and 8165178/ 3 C/88029/2019 22.08.2017, had exported the similar goods by misdeclaring the value to claim higher drawback and benefits under MEIS scheme 2.4 After completion of investigations and enquiries, a show cause notice was issued to the appellant which has been adjudicated by the Joint Commissioner holding as follows:
"Order
(i) I reject the declaration FOB value of Rs. 21,34,536.04 of the above mentioned Shipping Bill and Rs.
67,22,110.60 of the past (04) Shipping Bill of the similar goods, rule 8 of the Customs Valuation (Determination of Value of Export goods) Rules, 2007 (CVR) and order to re-determine it to Rs. 7,32,210.10 for the above mentioned Shipping Bill and Rs. 58,98,381/- for past (04) Shipping bills as per Rule-6 of the Customs Valuation (Determination of Value of Export goods) Rules, 2007 (CVR) has with section 14 of the customs act, 1962.
(ii) I reject the drawback claim of Rs. 2,28,358.21 under the above mentioned Shipping Bills and Rs. 7,25,987.80 for the past (04) Shipping bills of the similar goods and restrict it to Rs. 77,545.70 for the above mentioned Shipping Bill and Rs. 6,37,025/- for past(04) shipping bills, on re-determined FOB value of Rs. 7,32,240.10 and Rs. 58,98,381/- respectively.
(iii) I reject the MEIS benefit of Rs. 42,690.73 under the above mentioned Shipping Bills and Rs. 1,34,445/- for the past (04) Shipping bills of the similar goods and restrict it to Rs. 14,684.80 for the above mentioned Shipping bill and Rs. 1,17,967/- for past (04) Shipping bills on re-determined FOB value of Rs.7,32,240.10 and Rs. 58,98,381/- respectively.
(iv) I order to recover the loss of revenue to the exchequer caused by the exporter to the tune of Rs. 88,962.80 on account of drawback and Rs. 16,478/- on account of MEIS benefit availed for the past (04) shipping bills along with the applicable interest from the exporter, as per Rule 16 of Customs, Central Excise Duties & Service Tax Drawback Rules,1195 read with Section 75A of the Customs Act, 1962.
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(v) I order to confiscate the goods attempted to be exported vide shipping bill no 8854532 dated 23.09.17 under Section 113 (e), (i) & (ia) of the Customs act, 1962. However, I give an option to exporter to redeem the goods for the purpose of back to town after payment of redemption fine of Rs. 3,00,000/- (Rupees Three Lakhs only) and after clearing of all dues and payment of all fines as applicable.
(vi) I impose a penalty of Rs. 2,00,000/- (Rupees Two Lakhs Only) on M/s Sea Impex (IEC-2916901027), under section 114(iii) of the Customs Act, 1962.
(vii) I impose a penalty of Rs. 1,00,000/- (Rupees One Lakhs only) on Mrs Nammo, Proprietor of M/s Sea Impex, under section 114(iii) of the Customs Act, 1962.
(viii) I impose a penalty of Rs. 1,00,000/- (Rupees One Lakhs only) on Mrs Nammo, Proprietor of M/s Sea Impex, under section 114AA of the Customs Act, 1962.
(ix) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on Customs Broker, M/s. Kishor Doongarshi Thakkar (11/1031), under section 114(iii) of the Customs Act, 1962.
(x) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on Customs Broker, M/s. Kishor Doongarshi Thakkar (11/1031), under section 158(2) of the Customs Act, 1962.
(xi) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on Shri. Kishor Doongarshi Thakkar, proprietor M/s. Kishor Doongarshi Thakkar under section 114(iii) of the Customs Act, 1962.
(xii) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on Shri. Kishor Doongarshi Thakkar, proprietor M/s. Kishor Doongarshi Thakkar under section 114AA of the Customs Act, 1962.
(xiii) I impose a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on Shri. Kishor Doongarshi Thakkar, proprietor M/s. Kishor Doongarshi Thakkar under section 158(2) of the Customs Act, 1962.
(xiv) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) on Shri Pandurang K. Ingale (Kardex No. I-135), Employee of M/s. Kishor Doongarshi 5 C/88029/2019 Thakkar, under Section 158(2) of the Customs Act, 1962.
(xv) I impose a penalty of Rs. 25,000/- (Rupees Twenty Five Thousand only) on Shri Pandurang K. Ingale (Kardex No. I-135), Employee of M/s. Kishor Doongarshi Thakkar, under Section 114(iii) of the Customs Act, 1962.
(xvi) I impose a penalty of Rs. 25,000/- (Rupees Twenty five Thousand only) on Shri Pandurang K. Ingale (Kardex No. I-135), Employee of M/s. Kishor Doongarshi Thakkar, under Section 114AA of the Customs Act, 1962.
(xvii) I impose a penalty of Rs. 10,000/- (Rupees Ten Thousand only) on Shri. Uday Dattaram Rasal, Employee of M/s. Kishor Doongarshi Thakkar, under Section 158(2) of the Customs Act, 1962. (xviii) I impose a penalty of Rs. 25,000/- (Rupees Twenty five Thousand only) on Shri. Uday Dattaram Rasal, Employee of M/s. Kishor Doongarshi Thakkar, under Section 114(iii) of the Customs Act, 1962. (xix) I impose a penalty of Rs. 25,000/- (Rupees Twenty five Thousand only) on Shri. Uday Dattaram Rasal, Employee of M/s. Kishor Doongarshi Thakkar, under Section 114AA of the Customs Act, 1962.
(xx) I impose a penalty of Rs. 25,000/- (Rupees Twenty five Thousand only) on Shri. Mukund Patil, Export Executive of JWR Logistics Ltd CFS, under Section 114AA of the Customs Act, 1962.
(xxi) I impose a penalty of Rs. 25,000/- (Rupees Twenty five Thousand only) on Shri. Hanman Sopan Gaikwad, Receiving Surveyor, JWR Logistics Ltd CFS, under Section 114AA of the Customs Act, 1962."
2.5 Aggrieved by the order in original, appellants preferred appeal before the Commissioner (Appeals) which has been determined by the Commissioner (Appeals) as per the impugned order referred in para 1 above.
3.1 The appeal was filed along with the application for condonation of delay. The application for condonation of delay 6 C/88029/2019 was vide miscellaneous order No M/85093/2020 dated 22.01.2020 was allowed.
3.2 Interestingly appellant has chosen to abstain themselves from the hearing when so ever the appeal and application for condonation of delay was listed. Even on the date when the application for condonation of delay was allowed, appellant had chosen to abstain.
3.3 Since issue involved in the appeal is in very narrow compass, the appeal has been taken up for consideration after hearing the Authorized Representative for the revenue.
3.4 I have heard Shri S K Hatangadi, Assistant Commissioner, Authorized Representative for the revenue. Learned Authorized Representative submits that the appeal being against the order in appeal passed by the Commissioner (Appeals) in the matter relating to claim of drawback is not maintainable before the tribunal and hence needs to be dismissed as non maintainable.
4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Undisputedly the appellant has filed this appeal against the order in appeal, which has determined the issue in relation to the claim of drawback as is evident from the following para of the order in appeal:-
"6.2 The appellant, M/s. Sea Impex is an exporter of 'Brass Artware. They purchased the goods from local market at Moradabad and Firozabad. The goods attempted to be exported were declared as Brass Pankutty, Brass Deco Tea Pot & Iron Baskets. They filed Shipping Bill under a claim for duty drawback and MEIS benefits. On examination of the consignment covered the Shipping Bill No 8854489 dated 23.09.2017 the item 'Brass Pankutty' meant for export was found short. As against declaration of total 62 cartons of item no.1- Brass Artware Pankutty S/3 pcs set physical inventory revealed that 46 Cartons (Sr. Nos. 17 to 62) of "Brass Artware Pankutty-S/3 Pcs set were not found. Instead, another undeclared 46 Cartons containing "Glass Marbles" were found. Misdeclaration of goods was made to claim higher drawback and MEIS benefits. Sample was taken from the consignments for testing and market inquiry. The test conducted revealed that the composition of goods attempted to be exported was brass. During the market inquiry the average 7 C/88029/2019 price of the items was found to be grossly over-invoiced. It was revealed during the investigation on the basis of the material on record, market inquiry and the statements of the appellant and other persons, that the appellant had attempted to export cheap quality goods which were actually procured at a much lower price by misdeclaring the value and quantity with a view to fraudulently claim undue benefit of duty drawback and MEIS. The conscious knowledge of the exporter of as to description of the goods as well as value of the export made from India was proved and they had intentionally availed undue claim of Drawback and MEIS.
6.3 Above background of attempted exports by mis-declaration opened way for further investigation into the past exports made by the appellant during the period from March to August 2017. It was noticed by investigation that similar goods of lower quality were exported during March to August 2017 by over-valuing the same and higher drawback and MEIS claim was made defrauding Revenue. The evidences in the form of market inquiry clearly indicated that the appellant had overvalued the goods and claimed excess drawback and MEIS benefit than entitled. Thus, I find that reliance on the market inquiry report by the Authority is legal and proper. Furthermore, the appellant has also not brought out any evidence to prove it otherwise. Accordingly, I hold that in the absence of any evidences put forth by the appellant, the evidences Le attempt to export goods other than that declared and market enquiry report, act in the forefront to prove mis-declaration on the part of the appellant.
6.4 As discussed earlier, the documentary evidences prove overvaluation, which obviously was with a fraudulent aim to claim excess drawback and MEIS benefits. Hence the inadmissible drawback and MEIS benefits in case of live consignment were rightly rejected and the drawback and MEIS benefit in case of past exports was rightly ordered to be recovered. It is admitted fact that the goods were misdeclared with respect to quantity, description and value. Hence the value of the goods was rightly rejected and it value was re-determined fairly by conducting market inquiry.
6.7 In view of the above, I uphold the re-determination of the declared FOB value of Rs.21,34,536.04 to Rs.7.32.210.10 in 8 C/88029/2019 terms of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 and restriction of the duty drawback amount to Rs.77,545.70 and MEIS to Rs 14,684.80 in case of Shipping Bill 8854489 dated 23.09.2017, the re-determination of the declared FOB value of Rs.67.22,110.80 to Rs.58,98,381/-in terms of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 and restriction of the duty drawback amount and MEIS in case of past 4 Shipping Bills viz 4781859 dated 16.03.2017, 4781229 dated 16.03.2017, 8165126 dated 22.08.2017 and 8165178 dated 22.08.2017 as also recovery of duty drawback amounting to Rs 88,962.80 and an amount of Rs 16,478/- on account of MEIS in case of the said past 4 Shipping Bills as ordered by the adjudicating authority (OA).
6.8 The undisputed facts in this case are that the Appellant attempted to export Brass Artware products as declared in the Shipping Bill. However, on examination it was found that there was misdeclaration of the quantity, description and value of the goods. The discrepancy was found during the physical examination of the consignment. Had the Customs officer not examined the goods the discrepancy would have gone unnoticed. Further the appellant has not submitted any evidence before me to the effect that they had requested the assessing officer or the examination Officer seeking permission for taking the goods back to town before examination. In view of the above undisputed facts of outright mis-declaration the goods have been rightly confiscated by the original adjudicating authority. The appellant-exporter mis-declared the value, description and nature of goods in case of Shipping Bill 8854489 dated 23.09.2017 with intent to avail undue drawback and MEIS benefit. The over-valuation and mis-declaration of the export goods was done with a sole motive to claim undue/excess drawback and MEIS benefit. Therefore, confiscation of the above exported goods is upheld under Section 113€, 113(i) and 113(ia) of the Customs Act, 1962."
4.3 Appellants have themselves in para 1 of the Appeal Memo, under heading 'Statement of Facts" stated as follows:
9 C/88029/2019 "M/s Sea Impex having office at Mohalla Dehirya Chowk, Gokul Dass Road, Moradabad, UP 244001 (hereinafter called Appellant) filed Shipping Bill No 8854489 dated 23.9.2017 CHA/CB for Export of BRASS ARTWARE BRASS PANKUTTY, BRASS TEA POT AND IRON BASKET to UAE. Total FOB value declared at Rs 21,34,536/- The said Shipping Bill was filed under claim of duty drawback of Rs 2,28,358/- and MEIS benefit of Rs 42,288/-. The goods were carted in the CFS- M/s JWR Logistic at Nhava Sheva as per details given in the invoice."
4.4 Section 129 A (1) of the Custom Act, 1962 provides as follows:
Section 129A. Appeals to the Appellate Tribunal. -
(1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order -
(a) a decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority;
(b) an order passed by the Commissioner(Appeals) under section 128A;
(c) an order passed by the Board or the Appellate Commissioner of Customs under Section 128, as it stood immediately before the appointed day;
(d) an order passed by the Board or the Principal Commissioner of Customs or Commissioner of Customs, either before or after the appointed day, under section 130, as it stood immediately before that day :
Provided that no appeal shall lie to the Appellate Tribunal and the Appellate Tribunal shall not have jurisdiction to decide any appeal in respect of any order referred to in clause (b) if such order relates to, -
(a) any goods imported or exported as baggage;
(b)any goods loaded in a conveyance for importation into India, but which are not unloaded at their place of destination in India, or so much of the quantity of such goods as has not been unloaded at any such destination if goods unloaded at such destination are short of the quantity required to be unloaded at that destination;
(c) payment of drawback as provided in Chapter X, and the rules made there under :
10 C/88029/2019 4.5 In Preamble to the impugned order, at 1, the above provision has been elaborated stating as follows:
"1. The Order in Appeal is issued free of charge to the concerned persons.
Appeal to the CESTAT Any person aggrieved by the Order in Appeal may file an appeal under the Section 129A, in quadruplicate in the Form C A -3, to-
The Customs Excise & Service Tax Appellate Tribunal Jai Centre, 3rd Floor, 34 P D Mello Road, Masjid (East) Mumbai - 400008.
(ii) Revision Application to the Government of India In case the order is of the nature referred to in the first proviso to Sub-section (1) of Section 129 (A) of the Act, read with Rules 8A & 8B of the Customs (Appeals) Rules, 1982, a revision application under Section 129 D of the Act may be filed , in triplicate, in the Form C A - 8, to -
The Under Secretary to the Government of India Revision Applications Ministry of Finance, Department of Revenue. HUDCO Vishala Bldg, 6th Floor, B Wing Bhikaji Cama place, R K Puram, New Delhi.
4.6 Undisputedly the issue in the present case is in relation to payment of drawback as provided in Chapter X, and the rules made thereunder, hence the appeal against the order in appeal (impugned order) shall not lie to the Appellate Tribunal and Appellate Tribunal has no jurisdiction to decide such an appeal.
4.7 In view of the specific provision of section 129 A(1) of the Customs Act, 1962, this appeal is not maintainable before the Appellate Tribunal, and needs to be dismissed for this reason.
5.1 Appeal is dismissed as not maintainable.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) tvu