TaxTMI 
TaxTMI 
TaxTMI 
2013 (5) TMI 69
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....m. 1.3 Appeal No. C/265/2009 is by Shri V.S. Suresh, Senior Director (Finance) of the assessee-company challenging the penalty of Rs. 10 lakhs under Section 114 imposed on him. 1.4 Appeal No. C/266/2009 is by Shri S. Suryanarayana, Director (Supply Chain Management) of the assessee-company challenging the penalty of Rs. 10 lakhs under Section 114 imposed on him. 1.5 The appeal No. C/296/2009 is by M/s. DHL Lemuir Logistics Pvt. Ltd. who is Freight Forwarder and CHA against imposition of penalty of Rs. 5 lakhs under Section 114 of the Customs Act, 1962. 1.6 The appeal No. C/248/2009 is by M/s. GBR Freight Forwarders, who is Freight Forwarder and CHA against imposition of penalty of Rs. 5 lakhs under Section 114 of the Customs Act, 1962. 1.7 The appeal No. C/184/2009 is by M/s. Hermes Travel & Cargo Pvt. Ltd. who is Freight Forwarder and CHA against imposition of penalty of Rs. 5 lakhs under Section 114 of the Customs Act, 1962. 1.8 All these appeals arise out of common impugned order passed by the Commissioner and involve common facts and legal issues and, accordingly, dealt with by this common order. 2. Heard both sides extensively. 3.&ems....
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....ght forwarders basing on the commercial invoices raised by them at a later date after export of goods. (f) Out of the above charges paid to their freight forwarders/agents by M/s. DRL in respect of exports made by sea, the freight forwarders are retaining the charges like Bill of lading Fee (BL Fee) and transferring the remaining amounts, which are in fact payable to the respective carriers, viz. Maersk, Hapag Lloyd, etc. (g) In all the cases, the freight forwarders themselves are acting as Custom House agents also and dealt the exports goods of M/s. DRL in respect of filing of shipping bills, furnishing declaration relating to description, value, freight and insurance charges, etc. (h) While filing shipping bills in respect of proposed export consignments of M/s. DRL, by air, the charges of weight (volume) are only declared towards freight element and thereby arriving at 'FOB' value from 'CIF' value in the shipping bills and leaving all other charges incurred towards transportation and paid to carrier of the exports for carriage of export goods. (i) There are many instances that even the amounts declared as 'freight' at the time of filing shipping bills bef....
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....tion 28AB of the Customs Act. (d) Proposing appropriation of Rs. 19,83,700/- paid during investigation. (e) Proposing penalties on the assessee-company and its three officials and proposing penalties on the three companies who acted as Freight Forwarders-cum-CHAs. 3.3 The Commissioner by the impugned order held that the exported goods were liable to confiscation for misdeclaration of value. He held that the goods were overvalued with a view to get higher DEPB credit. He demanded duty of Rs. 1,10,09,602/- along with interest from the assessee-company. He imposed penalties on all the appellants as already mentioned. 4. The learned advocate for the appellants challenges the order inter alia on the following grounds :- (a) Contracts for Exports have been entered into on CIF/CIP basis and from the sale prices after deducting amount attributable to freight, FOB values have been declared in the shipping bills. (b) The dispute relates to arriving at the 'FOB value' from the 'CIF'/CIP' value for the purpose of claiming DEPB credit. There is no definition of freight charges either in the Customs Law or under the Foreign Trade Policy. There is also no metho....
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....benefit availed as Rs. 19,83,970/- and voluntarily paid the said amount before the issue of show-cause notice and even without raising objection regarding time-bar. This shows their bona fide. They are not contesting demand to this extent. (i) The demand being on alleged excess DEPB credit, the question of demanding interest under Section 28AB by treating the same as duty of Customs is without the authority of law. (j) As all the appellants followed the industry practice prevailing at the time, no mala fide can be attributed and no penalty can be imposed. 5. The learned Deputy Commissioner (AR) supported the impugned order by referring to the findings and reasoning of the Commissioner. He made the following submissions : (a) There was no scope for doubting that the amounts paid to the ship-owners/agents towards transport of goods in whatever names they described have to be considered only as amount towards freight. By claiming inflated freight, the appellants have taken undue benefit in the form of excess DEPB credits and the same have been rightly demanded and penalty imposed. (b) Referring to the Circular of the Board No. 30/98-Cus., dated 30-4-1998,....
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....Act/FTDR Act. The terms like FOB, CIF, CIP are well known "Incoterms" (International commercial terms) as duly noted by the Commissioner in his order. The means of the terms FOB & CIF as noted by the Commissioner are as follows : FOB : "In an FOB contract, a buyer and a seller agree on a designated FOB point. The seller assumes the cost of having goods packaged and ready for shipment from the FOB point The buyer assumes the costs and risks from the FOB point as well as all subsequent transportation costs and insurance charges." CIF : "In CIF contract, the selling price includes all cost, insurance and freight for any goods sold. The seller arranges and pays for all relevant expenses involved in shipping the goods from their point of exportation to a given point of importation." In the light of the above, the claim of the appellant-company that amounts paid in the name of FSC, SCC, etc., to the carriers engaged in international transportation is not part of freight and need not be deducted from CIF value to arrive at FOB value cannot be accepted and the same deserves to be rejected. 6.5 Having examined the scope of the term freight as above, we find that the executives of....
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....ent to the clearance of the goods under Section 47 of the Act vide Union of India v. Jain Shudh Vanaspati Ltd. [1996 (86) E.L.T. 460 (S.C.)]. Therefore, as rightly held by the Tribunal, if the contention of the appellant's counsel that when the goods were already cleared, no demand notice can be issued under Section 28 of the Act is accepted, we will be rendering the words "where any duty has been short-levied" as found in Section 28(1) of the Act as unworkable and redundant, inasmuch as the jurisdiction of the authorities to issue notice under Section 28 of the Act with respect to the duty, which has been short-levied, would arise only in the case where the goods were already cleared. In view of the clear finding with regard to the mis-declaration and suppression of value, which led to the under-valuation and proposed short-levy of duty, we do not see any lack of jurisdiction on the part of the adjudicating authority to issue notice under Section 28(1) of the Act." 7. However, we find that in the present case show-cause notice has been issued demanding differential duty under Section 28(1) of the Customs Act, 1962. Undisputedly, there was no duty on P or P medicaments,....