Document Fragment View

Matching Fragments

Shri Sundaranathan T., Advocate for the Appellant Smt. K. Komathi, Authorized Representative for the Respondent CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL) FINAL ORDER NOs. 40268-40274 / 2022 DATE OF HEARING: 24.06.2022 DATE OF DECISION: 30.06.2022 Order :
These appeals are filed by the exporters of leather goods to whom Show Cause Notices dated 27.10.2019, 27.11.2019, 03.12.2019, 21.08.2019, 06.09.2019, 05.12.2019 and 27.01.2020 were issued alleging, inter alia, that there was switching of the samples sent / taken to the Central Leather Research Institute (CLRI) for getting favourable certification for the goods as 'Finished Leather' and thereby facilitating fraudulent export of 'Semi-finished Leather', to evade payment of export duty and to avail duty drawback, apart from other incentives.
4

Appeal. No(s).: C/40617-40621/2021-SM & C/40113 & 40114/2022-SM

2. A perusal of the Show Cause Notices reveal, inter alia, that a team of officers from the Special Intelligence and Investigation Branch (SIIB), Custom House, Chennai carried out a surprise check at the Container Freight Station (CFS), Virugambakkam, on 07.10.2016 where some of the consignments of finished leather meant for export were lying at Godown No. 03, which was sealed by the said officers; that the said officers visited the CFS on 14.10.2016 wherein they appeared to have found relevant documents, including the first test report of the CLRI dated 07.10.2016; that thereafter, the said officers, with the help of Custodian and CHA, examined the consignments in the presence of Mahazar witnesses and Customs Broker; that accordingly, Mahazar dated 14.10.2016 was drawn; that as per the Show Cause Notices, samples were forwarded for testing to the CLRI vide letter dated 08.11.2016; that the CLRI thereafter vide its letter dated 09.11.2016 certified that the samples did not satisfy the norms and conditions laid down in the Public Notice No. 21/2009-14 dated 01.12.2009; that thereafter, some of the exporters approached the Hon'ble High Court by filing writ petitions; that the Hon'ble High Court, in one of its orders, allowed the export of the impugned consignments subject to certain terms and conditions; that thereafter, the Revenue proposed confiscation of the goods in question covered under the shipping bills involved under Section 113(i) of the Customs Act, 1962, apart from proposing to demand duty, redemption fine, penalty under Section 114(ii) ibid., withdrawal of duty drawback amount claimed and penalty under Section 114AA ibid.; the Show Cause Notices have relied upon various documents.

03. 6.2 He would also submit, referring to another Mahazar dated 07.11.2016 drawn in the presence of witnesses at Room No. K 306, SIIB Section, Narmada Block, 3rd Floor, Office of the Commissioner of Customs, III Commissionerate, No. 60, Rajaji Salai, Custom House, Chennai, that the Revenue has nowhere mentioned as to what was the subject matter of examination by the CLRI and from where the samples were drawn and that if at all there was a valid drawing of the sample leather from the impugned consignments, how and where the same was preserved from the first Mahazar dated 14.10.2016 to the other Mahazar dated 07.11.2016, which was drawn a day prior to sending the samples to the CLRI for examination/report.

11. Further, the Revenue has only alleged about the switching of samples, but has nowhere established how and where the switching had taken place since, admittedly, right from day one, the goods were at the godown of the CFS, the accessibility of which may not be that easy.

12. These facts coupled with the fact that the Mahazar dated 14.10.2016 did not witness drawing of any samples, throws sufficient doubts about the allegation of switching of samples and, in any case, the Revenue has not explained anywhere as to the source of the sample which was sent to the CLRI for testing/report. The above is sufficient to dislodge the veracity of the second report which goes to the very root of the report of the CLRI dated 09.11.2016.