2000 (12) TMI 117 - AT - Customs

Tribunal upholds Customs Act penalty for export over-invoicing.

OM PRAKASH BHATIA Versus COMMISSIONER OF CUSTOMS, DELHI

OM PRAKASH BHATIA Versus COMMISSIONER OF CUSTOMS, DELHI - 2001 (127) E.L.T. 81 (Tri. - LB) Issues Involved:1. Whether over-invoicing of goods for export is an offence under the Customs Act, 1962.2. Jurisdiction of Customs Officers to challenge the declared export value for non-dutiable goods.3. Applicability of Section 14 of the Customs Act for valuation of export goods.Summary:1. Over-invoicing of Goods for Export:The Tribunal held that over-invoicing of goods for export is an offence under the Customs Act, 1962. The adjudicating authority found that the appellants attempted to export ladies' skirts by declaring an inflated value to claim a higher drawback. The actual market value was Rs. 45/- per piece, while the declared value was Rs. 434/- per piece. The Commissioner of Customs imposed a redemption fine of Rs. 10,00,000/- and a penalty of Rs. 20,00,000/-. The Tribunal confirmed that over-invoicing with the intent to claim fraudulent drawback is punishable under the Act.2. Jurisdiction of Customs Officers:The appellants argued that Customs Officers lacked jurisdiction to challenge the declared export value for non-dutiable goods. They relied on the Tribunal's decision in J.G. Exports & Ors. v. Collector of Customs, New Delhi, which held that Section 14 of the Act was not applicable to over-valuation of export goods. However, the Tribunal found this view inconsistent with other authoritative pronouncements and overruled it. The Tribunal affirmed that Customs Officers have the jurisdiction to determine the value of export goods under Section 14, even if the goods are non-dutiable.3. Applicability of Section 14 of the Customs Act:The Tribunal examined the legal provisions for the declaration of value in respect of goods entered for export under Section 50 of the Act. It was clarified that the value of export goods must be determined in accordance with Section 14(1) of the Act, irrespective of whether the goods are chargeable to duty. The Tribunal referenced several cases, including the Calcutta High Court's decision in Collector of Customs v. Pankaj V. Sheth, which upheld the Customs authorities' jurisdiction to assess the value of goods for export. The Tribunal concluded that the provisions of Section 14 apply to all export goods for determining their value, ensuring compliance with statutory requirements.Conclusion:The Tribunal ruled that over-invoicing for export is an offence under the Customs Act, 1962. It upheld the jurisdiction of Customs Officers to challenge the declared value of export goods, including non-dutiable items, under Section 14 of the Act. The appeal filed by M/s. Om Prakash Bhatia was rejected, affirming the penalties imposed by the Commissioner of Customs.