TaxTMI 
TaxTMI 
2010 (2) TMI 634
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....16,000 pieces and the value Rs. 56,48,617.84. SIL claimed drawback of Rs. 6,21,348/On receipt of information that SIL over-valued the garments exported to avail undue drawback, officers of the Department visited the ICD Hyderabad on 16-8-2008. The goods under export were examined in presence of witnesses. It was found that as against 16,000 pieces declared in the Shipping Bill, there were 16415 pieces sought to be exported. These included 6531 pieces of damaged garments not fit for use. The exporter had declared a price of 8.5 USD per piece in the Shipping Bill. The authorities took a tentative view that the. exporter had mis-declared the quality, quantity and value of the. goods under export in order to obtain higher amount of drawback not....
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.... average price of USD 8.5 per garment. The purchase order was for the entire stock lot and that the variation of 415 pieces found was 2.5%. The Commissioner had not appreciated the relevant facts. He had sermonized that the appellants should have established a system of checks and cross-checks; it should not have depended on semi-skilled workers to ascertain the quantity under export. In his view, even if the buyer had consented to purchase stock lot, export documents should have been more specific as to the quality of goods. It is argued that from the E-mail of the buyer dated 19-7-2008, it was evident that the garments under export were seconds/stock lot and the average price of USD 8.5 per piece had been mutually agreed. The appellants h....
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....iscation of 16415 pieces under Section 113(d) of Customs Act as the consignment was ultimately exported and there was no prohibition to export stock lot. Further, Section 113(h)(ii) was not applicable in respect of 16,000 pieces which matched the description entered in the Shipping Bill. The excess quantity was a bona fide mistake and constituted only 2.5%. Section 113(h)(ii) was not applicable in respect of 9884 pieces in respect of which there was no valuation dispute. Section 119 was wrongly invoked as the goods involved had not been used to conceal any offending goods. Moreover there was no proposal in the show cause notice to confiscate any goods under Section 119 of the Act. As the confiscation was wrongly ordered under Section 113 of....
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.... counted 16,415 pieces as 16,000. The excess constituted only 2.5% variation. There was no misdeclaration as regards description or value. We find that the Commissioner rejected the explanation advanced by the appellants for the discrepancies found and held that even if the consignment comprised stock lot/seconds, invoices and the Shipping Bill should have carried the correct description. He found that it was highly inconceivable that the exporter having huge turnover had mechanism to verify the correctness of quantity packed for export. He observed that exporter should have established system of checks and cross-checks to arrive at the correct quantity without depending on illiterate semi-skilled workers. It was highly regrettable that the....
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.... penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty of a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws." 7. From the facts of the case and the impugned order, we are not able to conclude that the exporter had mis-declared the price of the goods under export. There was no valid reason to reject the claim of the appellants that it had engaged in negotiations with the foreign buyer and the true price was declared in the Shipping Bill as per the purchase order for the stock lot which was in possession of the appellant. The claim that the illiterate labour had erroneously counted 16415 pieces as 16,000 w....
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....nder Section 119 of the Act cannot be upheld as the same is not backed by a matching proposal in the show cause notice. We also find that the judgments relied on by the Commissioner do not cover the facts of the case. Barring an inadvertent excess of 415 pieces of garments we do not find any misdeclaration in the Shipping Bill. This mis-match does not justify any penalty on the exporter. We find that the Commissioner wrongly placed reliance on the judgments of the High Court in the case of Comex Co. v. CC, Madras (supra) and the Supreme Court in the case of Gujarat Travancore Agency (supra). In the instant case, the Commissioner appears to have attributed the discrepancies to the appellant not managing its affairs properly . There is no fin....