2022 (8) TMI 1009 - AT - Customs

Exporters vindicated by Tribunal; overvaluation claims dismissed due to lack of evidence. Procedural errors cited.

Shri Dinesh Sharma, Shri Davinder Singh Dawer @Goldy, M/s. Darbar Exports, Shri Jugal Kishore Dawer, M/s. GTB Exports, Ms. Kiran Dawer, M/s. Hazrat Mart, Smt. Isha Dawer, Shri Bharat Gambhir, Shri Dinesh Sakhuja, M/s. Ganpati Incorporation, Shri Varun Bhandari, M/s. Samriti Enterprises and M/s. G.H. Creation Versus Commissioner of Customs (Import & General), New Delhi

Shri Dinesh Sharma, Shri Davinder Singh Dawer @Goldy, M/s. Darbar Exports, Shri Jugal Kishore Dawer, M/s. GTB Exports, Ms. Kiran Dawer, M/s. Hazrat Mart, ... Issues Involved:1. Whether the appellants are bona fide exporters or simply freight forwarders.2. Whether the appellants are bogus firms.3. Whether the appellants overvalued the exported goods for availing undue Drawback/DEPB benefits.Detailed Analysis:1. Bona Fide Exporters or Freight Forwarders:The department alleged that Shri Goldy manipulated exports to avail benefits and over-invoiced exports. It was claimed that he managed exports for various firms and deposited foreign currencies collected from tourists into their accounts. The appellants contended they were genuine exporters, having received payments through proper banking channels and complied with all customs procedures. The Tribunal found that the department heavily relied on the statements of Shri Goldy and others, which were retracted and not corroborated as per Section 138B of the Customs Act. The Tribunal concluded that the appellants were genuine traders and exporters, conducting transactions on their own account, supported by their bank accounts and documentation.2. Bogus Firms:The department's case was that the firms were controlled by Shri Goldy and were merely name lenders. However, the Tribunal noted that the appellants had IEC codes, filed proper shipping bills, and received payments in foreign currency through legal channels. The independent nature of the firms was corroborated by bank statements and other documentation. The Tribunal found that the evidence presented by the department was insufficient to prove that the firms were bogus and that Shri Goldy was acting as a freight forwarder.3. Overvaluation of Exported Goods:The department alleged overvaluation based on reports from COIN Dubai and London, which indicated lower declared values in importing countries. However, the Tribunal found that no concrete evidence or market surveys were conducted to substantiate the overvaluation claims. The Tribunal highlighted that the transaction value declared by the exporters was accepted by customs officers, and no collusion was alleged between the exporters and customs officers. The Tribunal concluded that the charge of overvaluation was not conclusively established, as the transaction value for exports is based on the price agreed upon between the buyer and seller.Additional Points:- The Tribunal noted serious violations of principles of natural justice, as some appellants were not given the opportunity to inspect documents or cross-examine witnesses.- The Tribunal found the order of confiscation under Section 113(d) & (i) of the Customs Act to be bad, as the goods were already exported and not available for confiscation.- The demand for recovery of drawbacks or DEPB jointly and severally was found to be legally untenable.- The Tribunal did not address the jurisdiction of the DRI to issue the show cause notice, keeping the issue open due to pending review petitions before the Hon'ble Apex Court.Conclusion:The Tribunal set aside the impugned order, finding it unsustainable due to lack of concrete evidence, procedural violations, and incorrect legal conclusions. All appeals were allowed with consequential relief as per law.