2005 (11) TMI 135 - AT - Central Excise

Tribunal Annuls Penalties Due to Lack of Evidence; Upholds PMV for Current Consignment, Not Applicable to Previous Shipments.

The Tribunal set aside the penalties imposed under Section 114 of the Customs Act, 1962, due to insufficient grounds for confiscation and lack of evidence ... EXIM Policy - DEPB credit - inflated value given for getting undue benefit under the DEPB Scheme - Penalty - ascertaining the Present Market Value (PMV) of the export goods - HELD THAT:- It is well known that the Customs department is undertaking a lot of agency function. The import/export statistics for the country is prepared by the Customs department. Various types of cess/fees for other departments are collected by the Customs. Similarly, the ascertainment of PMV is one such function undertaken by the Customs for the licensing authority. There is no provision under the Customs Act for levy of penalty for mis-declaration of PMV. As regards the present case, the Department has arrived at the PMV of the goods to be exported on the basis of expert opinion of HMT. Moreover, the statements of Shri Shantilal Jain and Shri G. Vimal Bhandari testified the fact that the watches have been purchased at a lower price compare to what has been declared in the shipping bill. Prima facie, there is evidence of inflation of the value of the goods declared in the shipping bill. However, the appellants contended that they have realized the entire Foreign Exchange. Revenue has not established that similar or identical goods have been exported at lesser value. Hence there is not any evidence to show that the value declared by the appellants in the shipping bill violates Section 14 of the Customs Act, 1962. Moreover, there is no findings by the adjudicating authority that the export goods are liable for confiscation. The fact that the goods are not available cannot be the reason for not holding them to be liable for confiscation. In fact, this omission on the part of the adjudicating authority is very fatal to the case. As there is no finding that the export goods are liable for confiscation, no penalty under Section 114 of the Act can be imposed. Therefore, we set aside the penalties but uphold the determination of PMV at Rs. 230/- per piece for the purpose of DEPB credit as far as the present consignment is concerned. However, in respect of the earlier consignments, the value determined for the present consignment cannot be adopted. The appeal and disposed of in the above terms. Issues:- Allegations of over-invoicing and claiming undue benefit under DEPB Scheme- Value declared in shipping bill vs. actual value of export goods- Imposition of penalties under Section 114 of Customs Act, 1962- Application of Circulars and Customs Act provisions in determining Present Market Value (PMV)- Evidentiary value of expert opinion and statements of involved parties- Compliance with principles of natural justice in the proceedings- Confiscation of export goods and imposition of penaltiesAnalysis:The case involved allegations of over-invoicing to claim undue benefits under the DEPB Scheme, with the appellants accused of inflating the value of Quartz Analog Watches in the shipping bill. The Customs authorities proceeded against the appellants based on investigations and seized incriminating documents, leading to penalties imposed under Section 114 of the Customs Act, 1962.The appellants raised various arguments challenging the proceedings, including the retraction of statements by involved parties, time limits for ascertaining PMV, and compliance with Circulars issued by the Ministry of Finance. They contested the expert opinion of HMT Ltd. on valuation grounds and argued against the imposition of penalties based on misdeclaration.The Tribunal considered the Customs Department's role in determining PMV for DEPB credit and highlighted the absence of provisions in the Customs Act for penalty imposition on PMV misdeclaration. The Tribunal noted evidence suggesting inflated values but emphasized the lack of proof of identical goods being exported at lower values. It found no grounds for confiscation of export goods and consequently set aside the imposed penalties.Ultimately, the Tribunal upheld the determination of PMV at Rs. 230/- per piece for the present consignment but ruled that this value could not be applied to earlier consignments. The decision focused on the lack of confiscation grounds and the absence of findings supporting penalty imposition under Section 114 of the Customs Act, leading to the penalties being set aside.In conclusion, the Tribunal's judgment addressed the issues of over-invoicing, PMV determination, penalty imposition, and compliance with legal provisions and Circulars. The decision provided a nuanced analysis of the evidence and legal arguments presented, resulting in the setting aside of penalties while upholding the PMV determination for the present consignment.