TaxTMI 
TaxTMI 
2014 (12) TMI 812
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....h entitles them to claim DEPB benefit at the specified rates which are related to the FOB value of the goods exported. While processing 3 shipping bills, it was realized that there was huge difference between the ARE-1 value (i.e. ex-factory value) declared by the manufacturers of Porcelain Mugs and FOB value (i.e. export price) declared by the appellants. The FOB value was 4 to 5 times the ARE-1 value. In view of such huge difference, investigations were taken up. Searches were conducted at the office premise of the appellants (1) and (2). During the search, large number of incriminating documents were recovered which indicated ARE-1 value of various consignments exported in past as also FOB value, documents recovered also indicated price negotiations between the appellants and the importer in U.K. It was revealed that the appellants have accepted to add .08 pounds per pc of mug on the ARE-1 value and export at that price. It was also revealed that some of the manufacturers from whom the appellants were procuring the Porcelain mugs were also supplying the same directly to the buyer in U.K. During searches, duplicate set of invoices indicating the same number were recovered while o....
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....judicating authority had erred in ignoring this vital aspect. The ld. Counsel also argued that even the drawback rate which is applicable to All Industry and that of branded goods are different. This itself shows that Government recognizes higher value of branded goods. The other contention of the ld. counsel was that initially 14 consignments were provisionally released which were finalized on the basis of market enquiries. Once the matter was finalized based on the market enquiry, there is no question of re-establishing or making enquiry for valuation of the same goods and the approach of the department is perverted. Another contention of the ld. advocate was that the Hon'ble Supreme Court in the case of M/s. Vishal Exports Overseas Ltd. reported in 2007 (209) E.L.T. 331 (S.C.) has accepted the value which was 4 to 5 times the local market value in respect of Porcelain Mugs and in view of the said decision of the Hon'ble Supreme Court, there is no reason for the department even to start the investigation. Ld. Counsel also stated that the ratio of the decision of the Hon'ble Supreme Court in the case of Om Prakash Bhatia reported in 2003 (155) E.L.T. 423 (S.C.) is not applicable t....
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....y price and FOB value of the so called tailor-made/branded goods. In any case, there is no evidence brought forward by the appellants to indicate that the goods were tailor-made and had very special designs. Even if such goods were to have special designs or any such features, the manufacturer himself would increase the price and therefore, ARE-1 value would be higher. Therefore, this argument is totally baseless and misleading. Ld. AR also explained that the Jt. DGFT has not accepted the value but has kept the matter pending till the finalization of the value by the Customs and it is in pursuance of such order that the copy of the impugned order has been marked to Jt. DGFT. As far as Hon'ble Supreme Court's decision in the case of M/s. Vishal Export Overseas is concerned, ld. AR explained that in the said case, Tribunal also accepted the declared FOB value and Supreme Court only upheld the order of the Tribunal. In the said case, FOB value was accepted by the Tribunal due to lack of evidence and department had fixed the export value based upon a hypothetical basis. It was in view of the lack of evidence that the FOB value was accepted and hypothetical value arrived by Customs was ....
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.... not increase the ARE-1 value. By branding, the retail price of the goods may increase but would not affect the purchase price of the buyer from the manufacturer as the brand is that of buyer and not that of manufacture. We also note that no evidence whatsoever has been produced by the appellants to support their contention that the goods were tailor-made and were made of special designs and no such correspondence was produced to support their contention. These arguments appear to being advanced in order to justify the misdeed. Here the comparison is between the ARE-1 price and the FOB value. In the said comparison the factor mentioned by the appellants are not relevant. In view of these facts, we reject the appellants' contention. Factors mentioned by the appellant may be relevant for retail market and not to the transaction covered. 7. The other contention of the appellants is that the Jt. Commissioner had accepted the value based upon the market enquiry and therefore, the department cannot now say that the FOB price declared by them is on the higher side. We have gone through the note sheets relating to such acceptance. At that point of time, the ARE-1 were not produced by....
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....plicable to the present case. We have gone through the said decision of the Hon'ble Supreme Court. In fact, as pointed out by learned AR the said decision only upholds the order of this Tribunal. In the said case, the FOB value were 400 to 500% more than the purchase value but were accepted as no evidence to question the FOB value could be produced. The proposed value was totally hypothetic value by customs. In the present case, the correspondences with the buyer and the fact that the prices were to be manufacturers' price plus .08 pounds per pc of mugs is not questioned by the appellants and we feel this is very vital evidence to determine the correct FOB value. Moreover in respect of number of consignments, there were parallel set of invoices, one based upon the earlier mentioned formula and another indicating 400 to 500% more of the said value as indicated in the export document. The invoices had the same number. During arguments, on a query from the Bench, ld. advocate stated that one of these is proforma invoice and another one is actual invoice. We are not impressed with this explanation. Normally, proforma invoice will indicate a higher value and after negotiation the final ....