TaxTMI 
TaxTMI 
2002 (3) TMI 463
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.... application dated 5-11-99, the applicant has stated that he is a sole proprietorship concern and Shri Anil Kapoor is its proprietor and it was formed in the year 1994-95. 2.2 The applicant is a Government of India recognised 'Trading House' engaged in the manufacture and exports of cotton, acrylic, woollen knitwear and also into the trading/export of various items like stainless steel utensils, toothbrush, toothpaste, shaving cream, marble kitchenware etc. The applicant's export turnover during last two years have been to the tune of Rs. 65 crore per year approx. The applicant started this proprietorship concern in the year 1994-95 and in course of their manufacturing activities and exports they have obtained about sixty duty free advance licences under DEEC Scheme from the office of the Directorate General of Foreign Trade (DGFT) against which the applicant were entitled to import various duty free items such as acrylic fibre, raw wool, wool tops, mohair scoured and mohair top so that they could use them in their manufacturing process directly and/or through other processors manufacturers and ultimately such duty free imported material were to be utilised exclusively for ....
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....wledged by them vide their letter dated 20th August 1999 and 23-9-1999 and grant waiver of fine, penalty and interest and also immunity from prosecution for any offence under the Customs Act, 1962, Indian Penal Code and/or any other Central Act and (IV) direct the authorities concerned including DRI, Delhi Zone, New Delhi not to proceed further with the subject matter till the pendency and final disposal of this application and (V) pass such other further order(s), direction(s) as this Hon'ble Commission may deem fit and proper under the facts and circumstances of the present case." 3. It may be mentioned that the applicant has approached the Settlement Commission under Section 127B of the Customs Act, 1962. During the material time, para (a) to first proviso stipulated that application can be filed by an applicant if he has filed bill of entry, shipping bills etc. or a show cause notice had been issued. It was only through the Finance Act, 2000 that "and in relation to such Bills of entry or Shipping Bills" was added. 4. The Revenue vide letter dated 12-10-99 has reported that the Directorate has initiated investigati....
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....It may be mentioned that the applicant has complied with the orders from time to time so also the Revenue. 8.2 Incidentally, it may also be mentioned that DRI had filed a complaint in the Court of Additional Chief Metropolitan Magistrate against the Proprietor of M/s. Beeta Exports for non-appearance, in pursuance of summons issued under Section 108 of the Customs Act, 1962. The said complaint has been disposed off by the Hon'ble Additional Chief Metropolitan Magistrate, New Delhi stating inter alia that provisions of Settlement Commission are self-contained and the Settlement Commission has all exclusive jurisdiction over the case and that the Settlement Commission has admitted the said application. The Hon'ble Additional Chief Metropolitan Magistrate, New Delhi has observed as below :- "Since the matter has been settled the complaints cause of act which arose prior to the settlement cannot proceed further. The execution of NBWs were stayed till today. They are withdrawn." 8.3 In this background, it may be mentioned that the statement of Shri Anil Kapoor was recorded on 24-7-1999 wherein he has stated that he is engaged in export and import business, that he had....
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.... Consultant submitted that the goods are dutiable in Dubai. Under the existing instructions, particularly under DEPB Scheme the market inquiry is required to be conducted by the Customs authorities, as the DEPB rate is dependant on the actual value of the goods and on the value so determined the DGFT permits credit. In this case no market inquiry report has been produced by the department. (III) It was further submitted that there is also no dispute that the sale proceeds has been received and the realization certificate has been already submitted. Unless these evidences are discredited there is no reason why the value declared by the applicant cannot be accepted. (IV) The learned Advocate in this context referred to the Madras High Court judgment, reported in the [1999 (105) E.L.T. 258 (Mad.)] in the case of J.G. Exports v. Commissioner of Customs, Chennai. The learned Consultant drew the attention of the Commission to Paragraphs 10, 12, 14, 15, 16 of the said judgment. Copies of the circulars referred to therein were produced by the Advocate. (V) Para 2 of Circular No. 69/97, dt. 8-2-97 reads as : '2. Object of limiting the amount of Credit Based o....
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....y from prosecution under the Central Excise Act, Foreign Trade (Development and Regulation) Act and FERA. (III) The Directorate of Enforcement, New Delhi, was represented by Shri Johnson K. George, Chief Enforcement Officer. The representative of Enforcement Directorate, inter alia, referred to the report submitted on 24th Sept. 2001, stating that the investigation and other proceedings, including prosecution proceedings initiated by the Enforcement Directorate against the captioned party relates to non-realisation of export proceeds amounting to Rs. 40.06 crores and consequent violation of the provisions of Sections 18(2) and 18(3) of FERA, 1973. These two matters, the one before the Commission and the other before the Enforcement Directorate, are independent of each other. (IV) The Revenue was represented by Shri Umakant Mishra, Sr. Intelligence Officer, Directorate of Revenue Intelligence, New Delhi. The Revenue, reiterated the written submissions dt. 5-2-2002. It was submitted that there is no dispute of duty liability under the DEEC scheme. As regards the DEPB liability the party's contention that the value declared by the importer is not within their purview d....
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....2 The case before the Commission has three segments. 1. Violation relating to DEEC 2. Violation relating to import and export of DEPB 3. Violation in relation to fraudulent drawback schemes 11.3 The case was investigated by the Commissioner (Investigation) and he has pointed out that the amount payable by the applicant under DEEC Scheme is Rs. 8,63,25,976/- and not Rs. 7,95,75,715/- as admitted by the applicant. 11.3.2 On the issue of DEPB and drawback, the Commissioner (Investigation) did not quantify the liability as the records were with the Revenue and therefore the Revenue was directed to quantify the same. 11.4 The Revenue vide their letter dated 6-9-2001 has submitted as follows :- "I. DEPB DUTY LIABILITY As regard the DEPB claims made by the Party, kind attention is drawn to this office letter No. 23/73/99-DZU, dated 11-10-2000 & 27-4-2001 (copy enclosed). As is evident from the aforesaid letters, the value of the goods exported by the party declared at the Dubai port by the importer is much less than that declared by the party in shipping documents with ....
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.... facie tallying with the Shipping Bills provided by the Settlement Commission. Accordingly, for finding out duty liability on account of Drawback, this list has been taken into consideration. In this connection, enquiries were made with the Canara Bank, F-19, Cannaught Circus, New Delhi. Vide letter, dated 3-9-2001 (copy enclosed), Canara Bank submitted a list of Shipping Bills/GRs where export proceeds have been realised. Scrutiny of this list shows that out of 289 Shipping Bills, only in eight cases involving a total drawback involving Rs. 23,45,540/- export proceeds have been realised by the party as per details given below :- Sl. No. S/Bill No. DBK amount in Rs. 1. 1030219 443450 2. 1030220 345170 3. 1030221 310240 4. 1029472 316960 5. 1029475 588120 6. 1027205 341600 7. 1029474 235200 8. 1030365 345170 Total 23,45,540/- Therefore, the party has failed to realise the export proceeds in remaining 281 Shipping Bills involving Drawback of Rs. 2,83,82,777/-. The party is not entitled to this Drawback amount received by them in these cases, where export proceeds are not realised an....
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....1030927 8850 Chldn. 2 pc. Suit sets 2.50$ (Rs. 107.65) 8.9$ The above data clearly shows that in respect of 3 out of 7 S/Bills mentioned above, the Drawback claimed on the goods exceeds the market value of the goods thereby inviting prohibitions of Section 76(1)(b) of the Customs Act, 1962 indicating that the Drawback claim was not admissible to the party in these cases. However, the true extent of the fraud and implications thereof can only be ascertained when all export documents such as export invoices, Bill of lading etc. are available. The party may be asked to provide all these documents in case of all Shipping Bills, under Drawback Scheme. Overseas inquiries are being conducted in this regard separately. In view of the above, it is evident that M/s. Beeta Exports are required to refund Drawback amount of Rs. 2,83,82,777/- in respect of 281 S/Bills for which export proceeds have not been realised till now. Even in respect of remaining 8 S/Bills involving Drawback of Rs. 23,45,540/- there is a suspicion of over-valuation of FOB values to fraudulently avail Drawback benefits and even this amount of drawback might not be admissible to the party ....
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....sample drawn to ascertain gold contents. In view of above facts, we submit we made the export totally as per Law and realised the export proceeds thereof as per the requirements of Law. As far as declaration of value at Importer's place is concerned, that is not within our purview/jurisdiction. We have realised through Banking Channels the full Export Proceeds as declared in Shipping Bills. We also have to submit that the declaration of lower value has no benefit for us. As far as Delhi's Chamber of Commerce invoices are concerned, we have no connection with that. Further, in these invoices, the description given is Fountain Pen Nibs only and not Fountain Pen Nibs (made of 7.8 carat gold). In view of above given submission, we submit that DRI's plea is based on assumption and conjectures. We pray this Hon'ble Commission that we be allowed the benefit of DEPB for exports made of Fountain Pen Nibs made of 7.8 to 7.96 carat gold. 3. Customs duty liability under Drawback Scheme : In this regard, we refer to your letter dated 20th September 2001, wherein you had enclosed therewith copy of report of DRI. The department had sought refund of drawback of Rs. 2,83,82,777.00 (Rs....
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....ly for the purpose of Country of Origin and has no other evidentiary value. The contention of the applicant appears reasonable. For an act of omission and commission by a third party, namely, the importer at Dubai, the liability cannot be fastened to the exporter in India. 14. This is more so when it is viewed against the background that the applicant has realised the export proceeds and has submitted the relevant documents from the bank. Once the amounts stands realised, it cannot be said that export value shown in the document is inflated one with an ulterior motive. The country is interested in getting foreign exchange to the extent indicated in the relevant shipping bills and once that is being done, perhaps, it would not be a proper conclusion to allege that the applicant has manipulated the documents to defraud Customs duty at Dubai and therefore the theory advanced by the applicant is reliable. 15. It may be mentioned that in the case of J.G. Exports v. Commissioner of Customs, Chennai - 1999 (105) E.L.T. 258 (Mad.) in the High Court of Judicature at Madras - S.S. Subramani J.) - (Writ Petition No. 8884 of 1998 in W. M. P. No. 13542 of 1998, decided on 20-7-1....
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....oods or with respect of levy of duty excised on such goods". It is true that Section 37B was inserted in the Act only in December, 1985 but that fact cannot whittle down the binding effect of the circulars or instructions issued by the Board earlier. Such instructions were not issued earlier for fancy or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So, the circular, whether issued before December, 1985 or thereafter should have the same binding effect on the department. 21. Through a catena of decisions this Court has pronounced that Revenue cannot, be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter than an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the department, more so when others have acted according to such instructions. Vide Collector of Central Excise, Bombay v. Jayant Dalal Private Ltd. [1996 (88) E.L.T. 638], Ranadey Micro Nutrients v. Collector of Central Excise [1996 (87) E.L.T. 19], Poulose and Mathen v. Collector of Central Excise [1997 (9....