TaxTMI 
TaxTMI 
2011 (4) TMI 1
X X X X Extracts X X X X
X X X X Extracts X X X X
....he exports of ready-made garments, engineering goods, handicrafts, woollen garments, leather goods, etc. On 24th February, 2003, the exporter filed seven shipping Bills (Nos. J- 903000127-129 and J-903000131-134) for export of goods declared as 'ladies tops' valued at Rs. 390/- per piece and 'denim shirts' valued at Rs. 417/- per piece consigned to one M/s. Zao Jainyo Overseas, Moscow, Russia at a total FOB value of Rs. 4,14,63,360/-. The exporter claimed a duty drawback of Rs. 49,75,536/-. 3. Based on secret information that the afore-mentioned goods had been over-valued with the intention of claiming undue drawback amounts, customs authorities carried out 100% examination of the consignment on 26th February, 2003; drew samples, and forwarded the same to one M/s. Skipper International for their opinion regarding their market value. 4. On 27th February, 2003, Mr. Sanjeev Jain, director of the exporter company was also examined, and in his statement recorded under Section 108 of the Act he stated that the goods covered by the shipping bills were not manufactured by his company, but were supplied by one Mr. Gupta. Payments to Mr. Gupta in respect of the goods were made th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nscribe his signature on the same. It was further stated that he was neither shown any goods nor any documents. 8. On 14th December, 2004, the exporter replied to the show cause notice denying all the allegations contained therein. The exporter also questioned the authenticity of the report dated 12th March, 2003 submitted by M/s. Skipper International. 9. The Commissioner of Central Excise, Delhi-III adjudicated on said show cause notice vide Order-in-Original dated 31st January, 2005. Relying on the decisions of the CESTAT, wherein the market enquiries conducted by the revenue in the absence of and without notice to the exporter had been held to be invalid, the Commissioner dropped the proceedings against the exporter, and allowed the draw back as claimed by the exporter. The Commissioner held as follows : "In the light of above decisions of Hon'ble Tribunal, I find that the enquiry conducted from M/s. Skipper International, in the absence of and without any notice to the exporter company or its Director, cannot be assigned any evidential weightage as it does not depict if the identical garments had ever been purchased by M/s. Skipper International for the given pric....
X X X X Extracts X X X X
X X X X Extracts X X X X
....awed. Secondly, M/s. Skipper International was dealing in (sic.) export surplus garments, therefore, it had expertise in the market valuation of such goods. If fabric and stitching are of poor quality, certainly, the items would not be having the price of prime quality export garments as declared by the exporter. 10. Another entirely unacceptable aspect in the appellant's conduct is that it has refused to place on record the material which it should be in possession of to substantiate the values declared. The appellant is a merchant exporter and has purchased the garments, valued over Rs. 4 crores from the market. It is to be expected that the appellant would have taken care to place the order for the goods on competent manufacturers or traders along with proper specification regarding material, make, and size and those manufacturers or traders would give the appellant proper invoices and other documents. Instead of producing such evidence, it has chosen to state that procurement is through one illusory Gupta, whose particulars are not known to the appellant. Such abnormal vagueness can only be attributed to an effort to cover up inconvenient facts. It is well settled that a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not even made a party to the appeal filed by the Revenue. 13. Per contra, Ms. Rashmi Malhotra, learned counsel appearing on behalf of the Revenue strenuously urged that the impugned judgment deserves to be affirmed, and the CESTAT rightly did not consider the effect of retraction by M/s. Skipper International, as the same was not dealt with by the Commissioner as well. Learned counsel urged that the exporter cannot be allowed to urge this ground at this stage, as the same was not raised by it before the CESTAT. In support of the contention, decision of this Court in M/s. Builders' Association of India v. State of Karnataka & Ors - (1993) 1 SCC 409 was pressed into service. According to the learned counsel, since the retraction was tendered after twenty one months of the submission of original report, it had lost its efficacy and, therefore, had no bearing on the authenticity of the report. 14. It is trite law that the amplitude of an appeal under Section 130E(b) of the Act, in relation to the rate of duty of customs or to the value of goods for the purposes of assessment, is very wide but it is equally well settled that where the CESTAT, a fact finding authority, has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted goods; (ii) the exporter was required to declare the value of the goods expected to be received from the overseas purchaser and not the market value of such goods in India and (iii) since in that case, no duty was payable on the export, Section 14 of the Act could not be applied to determine the value of the goods. It was, inter alia, held that the definition of "prohibited goods" in Section 2(33) of the Act indicates that if the conditions prescribed for import or export of the goods are not complied with, it would be considered to be "prohibited goods". It was held that for determining the export value of the goods, it is necessary to refer to the meaning of the word "value" as defined in Section 2(41) of the Act and the same must be determined in accordance with the provisions of sub-section (1) of Section 14 of the Act. The Court observed thus : "...For determining the export value of the goods, we have to refer to the meaning of the word "value" given in Section 2(41) of the Act, which specifically provides that value in relation to any goods means the value thereof determined in accordance with the provisions of sub-section (1) of Section 14. ......... ....