2017 (11) TMI 2060 - AT - Customs

Tribunal Overturns Order on Export Overvaluation Allegations Due to Insufficient Valuation Details; Appeals Allowed.

The Appellate Tribunal CESTAT ALLAHABAD set aside the impugned order against the appellants, who were accused of overvaluing goods for export to claim ... Duty drawback - overvaluation of goods - whether the appellants have resorted to overvaluation of the goods proposed to be exported to U.S.A. for availing drawback, by mis-declaration? - HELD THAT:- It is held that no valuation of the goods proposed to be exported have been done as a result of the purported inspection. Thus, the allegation of overvaluation is without any basis. Thus, the show cause notice is held to be not maintainable as it does not disclose the gist of allegation, the appellants were required to meet. Accordingly, the impugned order is set aside. Appeal allowed. Issues:1. Allegation of overvaluation of goods for availing drawback by mis-declaration.Analysis:The judgment by the Appellate Tribunal CESTAT ALLAHABAD, delivered by Member (J), revolves around the issue of whether the appellants resorted to overvaluation of goods intended for export to the U.S.A. for availing drawback through mis-declaration. The show cause notice alleged that the appellants filed a Shipping Bill for the export of specific goods at a certain value, which entitled them to a particular drawback amount. The Shipping Bill was appraised due to the high prices of the goods, and an inspection revealed that the goods were manufactured from old and used clothes, leading to suspicion of overvaluation to claim a wrongful drawback. The Revenue contended that the appellants exported used/old goods to claim an undue benefit.Upon hearing the parties, the Tribunal found that the show cause notice lacked a proper valuation of the goods proposed for export following the inspection. Consequently, the allegation of overvaluation was deemed baseless, rendering the notice unsustainable as it failed to provide the necessary details for the appellants to respond adequately. As a result, the impugned order was set aside, and the appellants were granted consequential relief as per the law. Ultimately, all appeals were allowed, providing a favorable outcome for the appellants.In conclusion, the judgment highlights the importance of substantiating allegations with proper valuation and evidence, emphasizing the necessity for clarity in show cause notices to ensure fair proceedings and the right of the appellants to respond effectively to the charges brought against them.