TaxTMI 
TaxTMI 
2013 (8) TMI 508
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....on the factual scenario of a particular case. 20. In the instant case, what the Tribunal appears to have done is to refer to the arguments of parties and then came to abrupt conclusions without discussing in detail as to how the conclusions of the Commissioner were erroneous. That having not been done the order is vulnerable. Accordingly, we set aside the order of the CEGAT and remit the same to it for fresh adjudication. It is to be noted that present CEGAT is known as Customs Excise and Service Tax Appellate Tribunal (in short 'CEGAT'). The appeals are allowed to the aforesaid extent. We express no opinion on the merits of the case." 3. Briefly stated the facts of the case are as follows : The appellant-company M/s. Peerless Consultancy Services Pvt. Ltd. (PCS in short) entered into an agreement with Ria Multiple Enterprises, Taman Ria Jaya, West Malaysia, Malaysia for shipment of high precision stainless steel balls of 6.35 mm and 3.17mm at the prices as would appear from the contract and the invoices raised by the appellant. The contract between the appellant company and the said foreign buyer was made in usual course of international business where the price was th....
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.... restricted the total DEPB credit to Rs. 60,19,377/-, at 22% of the purported ascertained FOB value. The Commissioner further imposed penalties of Rs. 20 lakhs, Rs. 1 lakh and Rs. 1 lakh on the appellant Nos. 1, 2 and 3, all under Section 114 of the Act. He further directed finalisation of provisional assessments in respect of the said goods covered by the 16 Shipping Bills as per the said order. 6. The issue involved in the instant case is whether there has been overvaluation of the 16 consignments of steel balls exported by the appellant during the period May to August, 1999 for the purpose of obtaining higher DEPB credit than eligible. The goods exported were high precision stainless steel balls of 6.35 mm diameter and 3.17 mm diameter conforming to AISI 316 standard. 7. The Commissioner came to the above conclusion on the following grounds namely :- (i) The FOB value declared was highly inflated only to avail greater amount of DEPB credit. (ii) None of the export documents, contract with the foreign buyer, orders placed to the local suppliers, bills raised by the local suppliers were of any sort of technical characteristic/specifi....
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....t Rs. 2,73,60,806.00. Accordingly, he adjudged the DEPB credit admissible at Rs. 60,19,377.00. 9. The defence put forth by the appellant-firm are as follows :- (a) As regards the quality of the product exported by them, the Customs Authorities at the time of export had drawn samples and got them tested and they were found to be conforming to AISI 316 (stainless steel) grade. The goods were sent to foreign buyer, M/s. Ria Multiple Enterprises, Malayasia; but the documents were sent to M/s. Dudly Enterprises, Singapore in terms of the contract made through bank. Though they did not receive the payments, for the supplies made initially and there was a delay. Subsequently, they had received full payment in respect of all the 16 consignments within the period extended by the Reserve Bank of India. Thus the entire transactions were undertaken through banking channels and the proceeds were also realized through the banking channels. They have given the full details of the payments and receipts for the supplies made enclosing copies of the permission granted by the Reserve Bank of India and also GR number and date, invoice number and date, date of receipt and payment etc. along with ....
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....cate that they have procured the goods at the rate of 70 paise in respect of steel balls of 3.17 mm and at the rate varying from Rs. 1.10 to Rs. 1.25 in respect of steel balls of 6.35 mm. Therefore, the Department's conclusion that the price has been inflated has no basis whatsoever. (e) They have also submitted that there are other exporters who have exported similar products between June, 1998 to March, 1999 and in these cases, the exporters have declared an FOB value ranging from 70 paise to 82 paise per piece in respect of steel balls of 3.17 mm diameter and prices ranging from Rs. 1.28 to Rs. 1.29 per piece in respect of steel balls of 6.35 mm diameter and these prices have accepted by the Customs and these exporters have been given DEPB credit on the basis of such declaration. As against this, the FOB value declared by them comes to 70 paise per piece in respect of steel balls of 3.17 mm diameter and Rs. 1.30 in respect of steel balls of 6.35 mm dia. which compares very well with the exports made by other parties. They have given the details of such exports which are given below :- Name of the Exporter Quantity Size of Steel Balls FOB Value Unit Price in Rs.....
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....ea about the international price for such steel balls. Ans. Personally I don't have idea. 22Q. Have you procured any quotations for supply of such Steel Balls from any other party than what you have mentioned in your answer to the question No. 9? Ans. : Yes, we have taken several quotation from other parties also but they all either were higher in price or they did not meet the precision quality of those suppliers whom we selected. 23Q. Can you submit such quotations? Ans : Yes but we have to dig from our records and it may take time. We will however try to submit by Thursday 29th March, '01." There is nothing wrong in a person not "personally" having idea about international prevailing price of the goods. The quotations obtained clearly gave a broad idea thereof. (c) Though it has been claimed that the exported goods were precision items intended for very sophisticated use, there was no mention of the quality/specifications of the goods in any of the relevant documents such as the export contract, invoices raised by the Indian suppliers, export invoice, shipping bills etc. It is categorically stated therein that not only did th....
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....eclared values of the subject goods but also brings out the difference in quality and price between AISI 316 grade and AISI 304 grade of the steel balls. (f) The remittance actually started only after initiation of the investigation by DRI, otherwise the exporter sat tight after sending goods worth Rs. 14.91 crore without the cover of any letter of credit. The remittances were received on and from March 3, 2000 onwards and the entire sale proceeds were received within the extended period(s) allowed therefor by the Reserve Bank of India, the prescribed authority. For relisation of the sale proceeds legal notice had to be sent to the foreign party when repeated requests to remit the entire amount payable failed. (g) Though it was claimed that the quality of the exported goods were tested by an expert, the noticees failed to submit any evidence in the form of the report of such expert or the bill raised by him and even failed to provide his name. The quality of the export goods were tested by the Department itself and found to be of the quality declared. (h) The local supplier M/s. Kalibon Industries failed to submit evidence of purchase of the raw materials and the bil....
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....ting authority and, therefore, leave should be granted to adduce the said report as additional evidence on behalf of the department. (iv) the contemporaneous exports relied upon by the appellant was for very small quantities and the export in these cases took place in June and September 98 and January and March 1999. Therefore, the said export cannot be considered for comparison purposes for the reason that the quantities exported are not comparable and nor the periods of exports. 12. We have carefully considered the rival submissions. 12.1 As regards the Department's request for submission of additional evidence at this stage, we are unable to agree with this request for the following reasons. The show-cause notice was issued in this case on 11-4-2001 and the case was adjudicated in June 2001. There is a lapse of almost 10 years on the part of the Department in wanting to submit the additional evidences in the case. This plea was not raised before the adjudicating authority when the order was passed in June 2001 nor when the case came up before the Tribunal when the Tribunal passed the order in February 2002. This plea was not taken by the Department when they filed civil....
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....ect of steel balls of 6.35 mm diameter. Thus, it is clearly established that the present market value which they have arrived at, is based on documentary evidences. In respect of transactions undertaken by them, we further observe that some of these were supplied under AR-4 and in respect of these transactions, the value declared therein, compares very favourably with the FOB value of exports undertaken by the Appellant and therefore, we find that the present market value arrived at by the Appellant are within permissible limits. We further observe that the appellant-firm has realized the full export proceeds amounting to Rs. 14,91,81,854.00 through proper banking channels and within the extended period granted by the Reserve Bank of India. Merely because there has been a delay in the realization of export proceeds (which have been condoned by the competent authority namely, Reserve Bank of India), the Department's conclusion that the entire transaction is a sham one has no basis whatsoever, and has to be rejected totally. 13. The Department has argued that based on the enquiry conducted by them, the cost of manufacture of steel balls of 3.17mm dia. is only about 50-55 paise per....
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....; Printed Price List or a Catalogue indicating the local price. (e) Sale Invoice of the Authorised Dealers or any other evidence. The guidelines further provide that in any case where PMV declared by the exporter cannot be verified with reference to the parameters mentioned above, or is higher than 150% of AR-4 value and the Assistant Commissioner is of the opinion that PMV declared is not acceptable, the exporter shall be given an opportunity to justify the correctness of the PMV declared by issue of a Show Cause Notice indicating the reasons for reducing the PMV value. In view of these guidelines, the Revenue has not succeeded in making out a case against the appellant-firm as the PMV declared is not more than 150% of AR-4 value. 15. We find that during the material period, the Department allowed export of goods by other exporters under DEPB Scheme at much higher FOB values than what has been declared by the Appellant in the instant case and the details of the transactions were available with the Department for cross-checking [ref. para 9(e) above for details]. If the FOB values in these cases could be accepted by the Department, there is no reason why in the....