2017 (9) TMI 202 - AT - Customs

Tribunal decision: Confiscation upheld, duty demands dismissed, DEPB credit disallowed under Section 28

M/s. Stella Industries Pvt. Ltd. Versus Commissioner of Customs, New Delhi

The Tribunal set aside the demand under Section 28, upheld confiscation due to mis-declaration of exported goods, disallowed DEPB credit, and dismissed ... DEPB scheme - Jurisdiction - export of consignment of ‘Eau De Perfume’ - denial of DEPB benefit on the ground that alcohol content is more than 70%, whereas the DEPB credit is available only when the percentage of alcohol is upto 70% - case of appellant is that the Customs have no jurisdiction to deny DEPB credit and recover the same as duty of Customs - Held that: - At best, Customs authorities can take up the matter with the Licensing authority under the Foreign Trade Development Regulation Act for non-grant of such DEPB credit. From the record, we find this has already been done. However, in view of mis-declaration by the appellant, the order for confiscation of the export goods is upheld but the demand raised under section 28 is set aside. Demand of ₹ 11,58,438/- involving goods which have been already exported under various shipping bills - Held that: - no sample of the goods covered by earlier consignments have been drawn by the Customs Authorities. Further, there is no reference to any test reports of such earlier samples - Misdeclaration has to be established on the basis of positive evidence and cannot be by implication that the goods were same as what was exported later. In the absence of any kind of evidence with reference to goods exported earlier, the allegations of misdeclaration in the earlier consignment cannot be upheld. For the same reason, the benefit of DEPB already claimed by the appellant in respect of such exports cannot be denied. Appeal allowed - decided partly in favor of appellant. Issues:1. Jurisdiction of Customs to deny DEPB credit and recover the same as customs duty.2. Utilization of DEPB credit for raising demands under Section 28 of the Act.3. Treatment of export benefits granted by DGFT as duty under Section 28 of the Act.4. Mis-declaration by the Appellant regarding the exported goods.5. Invoking the extended period of limitation for raising demands against the Appellant.6. Liability for confiscation of goods and imposition of penalties.Analysis:1. The case involved appeals against an Order-in-Original regarding the export of 'Eau De Perfume' where the DEPB benefit was claimed. The Customs authorities issued a show cause notice (SCN) alleging that the alcohol content in the exported goods exceeded the permissible limit of 70%, leading to disallowance of DEPB credit, duty demands, and proposed penalties and confiscation of goods.2. The appellants contended that Customs lacked jurisdiction to deny DEPB credit and recover it as customs duty, citing various case laws. The Tribunal noted that DEPB credit was not utilized in this case and set aside the demand under Section 28, upholding the confiscation due to mis-declaration.3. Regarding the treatment of export benefits as duty under Section 28, the Tribunal found that while the DEPB credit was not utilized, mis-declaration justified confiscation of goods but not the demand under Section 28.4. The issue of mis-declaration by the Appellant was raised, with the Tribunal finding discrepancies between the declared goods and the actual alcohol content in the samples. The Tribunal upheld the confiscation due to mis-declaration but set aside the demand under Section 28.5. The appellants argued against invoking the extended period of limitation for raising demands, which the Tribunal considered in the context of the samples drawn in 2011. The Tribunal found that without evidence from earlier consignments, the allegations of misdeclaration could not be upheld.6. The Tribunal analyzed the liability for confiscation and penalties, upholding confiscation for mis-declaration in specific shipping bills but setting aside duty demands and penalties related to earlier consignments due to lack of evidence supporting misdeclaration. The final order modified the impugned order accordingly, disallowing DEPB credit, upholding confiscation, and setting aside duty demands and penalties from earlier consignments.