AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (8) TMI 1103
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....ervaluing export goods with the fraudulent intention of claiming undue export benefits like DEPB credit and drawback. There was also the charge that in the case of certain export consignments, export proceeds were not realized within 180 days from the date of export. The DEPB scripts so obtained were sold to different importers who imported goods without payment of customs duty by making use of such scrips. In some cases scrips were only partially used. The actions proposed under the Show Cause Notice were to hold the exported goods liable to confiscation under section 113 of the Customs Act, to impose penalty for their actions rendering the goods liable to confiscation, to demand the ineligible drawback granted to the first two appellants, to disallow the unutilized portion of the DEPB scrips and to demand the duty foregone on account of the imports made using the DEPB scrips sold by the first two appellants. Adjudication of the Show Cause notice resulted in following consequences among other consequences. (i) DEPB credit of Rs. 1.5 crores was denied to Saluja Exim and Saluja Exim Ltd on account of exports for which export proceeds were not realized in 180 days from date of exp....
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.... the above argument. (a) Vrundavan Exports Vs. CC-2005 TIOL-1156-CESTAT (b) Prayag Exporters Pvt. Ltd VS. CC-2000 (121) ELT 819 (c) Badri Prasad Pvt. Ltd VS. CC 1995 (80) ELT-624 (d) Shilpi Exports Vs. CC-1996 (83) ELT-302 (ii) No duty can be demanded from the exporter of the goods. The Appellants have not imported any goods but were only exporters. So no demand of duty can be made under section 28 on the Appellants. The decisions in K. Sons Overseas India Pvt. Ltd VS. CC-2001 (132) ELT 93 (tri) and Jupiter Exports Vs CC-2001 (131) ELT 147 (Tri). (iii) All requirements of Notification 45/2002-Cus dated 22-04-2002 have been fulfilled. If at all there is any liability on the appellants for goods imported. It is argued that all the conditions of Notification 45/2002-CUs is satisfied and there can be no case for demand of duty on imports (iv) The export goods were not over-invoiced. It is submitted that the department is relying only on the statements of Shri. Dhiraj Saluja and Shri. Neeraj Saluja to prove over valuation. These statements were taken under duress. The Kolkata Customs which had investigated the matter of overvaluation had adjudicated the mat....
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....d evidence. In the matter of overvaluation it is to be noted that the overvaluation is worked out on the basis of amounts transferred into the bogus accounts and the amounts are not worked out for each consignment. This amount may be only about 15% of the total value of exports made by the appellants. (v) As per the provisions of section 113 (i) any goods entered for exportation which do not correspond to in any material particular with information furnished with the entry made is liable to confiscation. In this clause expression like attempted to be exported used in some of the other clauses of the same section is not used. So it is obvious that goods can be held to be liable to confiscation even after actual export. As per decisions of the Courts goods have to be available for confiscating the goods but these decisions are not applicable for holding the goods to be liable to confiscation. (vi) When the goods are held to be liable to confiscation penalty can be imposed under section 114A of the Customs Act. 6. We have considered arguments on both sides and perused the records. 7. We have also perused the order dated 10-06-2011 passed by the Joint Director of Foreign ....
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....o whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any willful misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisons of this sub-section shall have effect as if for the words one year'' and six months'', the words five years'' were substituted. 10.2. This section does not state that duty should be demanded from the importer. It states that duty should be demanded from person chargeable with duty. Even the first proviso talks about issuing notice to the importer or the exporter. Further Section 2 (26) of Customs Act defines importer as (26) importer, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer; It may be noted that no explanation is given for the e....
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....e lost on account of DEPB licenses obtained fraudulently can be recovered from exporters. 10.6. We note the observations of Gujarat High Court and agree with the finding of the adjudicating authority in this regard. 11. The next issue to be considered is whether there was overvaluation. The evidences relied upon by Revenue to prove overvaluation is the fact that the appellants had opened 10 bogus bank accounts in Centurion Bank, Ludhiana to which money was transferred from the accounts of the appellants and cash was withdrawn from these accounts. The statements of Shri. Neeraj Saluja on 26-12-2003 and 27-12-2003 prove that such money was paid to hawala operator Shri Gulshan Kochar to remit it back to the foreign buyer who remitted money into the account of the appellants purporting it to be value of export goods. There are some supporting documents as seen at page 2 to 18 of File B-76 recovered from the Rahon Road Office of Neeraj Saluja showing details of instructions given to Gulshan Kochar. Extracts from a note book stated to be maintained by Hawala operator and produced by him is also relied upon as evidence. This extract is not a very reliable evidence because the diary ....
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....ount of M/s Saluja Exim of one month. It manifests the transfer of US dollars 6,58,948 into the account of M/s Saluja Exim between 19.11.03 to 17.12.03. As manifest by the statements of Shri Gulshan Kochhar, he admittedly routed the foreign remittances to the bank accounts bearing nos as 579126 and 577639 of M/s Saluja Exim Ltd and M/s Saluja Exim through hawala n the said Centurion Bank. In the absence of any retraction by Shri Gulshan of his statement or any contradictory evidence on record to the above page of diary maintained by him, I find that this piece of evidence is sufficient to corroborate the disclosures made by Shri Gulshan in his statements regarding the transfer to the above said foreign remittances to the Centurion Bank accounts of M/s Saluja Exim and M/s Saluja Exim ltd. The amount of DEPB works out to be Rs. 3,93,55,968/- and drawback as Rs. 1,33,342/- in respect of shipping bills for which remittances had been received in the Centurion Bank during the said period. The DEPB licenses for the above amount were sold by the exporters to various importing firms (details of notices given in the brief facts above). The bank account statements [Transaction History Enquiry....
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....rought to the fore that he had made an arrangement with his overseas buyers under which they would be given belter discounted prices and they would in turn allow them to raise inflated invoices and to mention their references in swift messages received from telegraphic transfers for such over-invoiced remittances arranged by Shri Gulshan through hawala operation. He brught to the fore that there was no practive of mentioning of L/C on swift messages for Telegraphic transfer remittances and the same was done for not giving any indication about linkage to hawala. He further disclosed that they had made arrangements of over-invoicing with their buyers at Dubai and Russia and had been getting remittances for over-invoiced part through Telegraphic Transfers (TT) in Centurion Bank, Ludhiana. He put forth that they had claimed the incentive of about 16-18 crores. He admitted that they had adopted unfair means to over-invoice the export goods from June 2003 onwards in order to avil undue drawback/DEPB to the extent of Rs. 4 crores including s. 1.5 crores of incentive for which no payment had been received from overseas buyers by that time. He also expressed his willingness to retun the sam....
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....s. These are,- (i) The Shipping bills in respect of which export proceeds have not been realized within 180 days from date of export is not specified. (ii) The extent of overvaluation is not clearly quantified. Further there are inherent contradictions in the findings and quantification as may be seen from the following paragraphs. 13.1 Para 22 of the SCN states that DEPB credit and drawback in respect of shipping bills for which remittance is received in Centurion Bank, Feroze Gandhi Market, Ludhiana is proposed to be denied. DEPB credit of Rs. 1,50,00,000/- on account of non-realization of export proceeds plus Rs. 2,43,55,968/- on account of overvaluation are denied as per para 132 (iii) and 132 (iv) of the impugned order. This corresponds to Rs. 3,93,55,968/- mentioned in para 22 of SCN. But this amount corresponds to Shipping Bills for which foreign exchange was received in Centurion Bank, Ludhiana. Thus an amount of Rs. 1.50 crores is denied on the ground that foreign exchange is not realized and the same amount is stated to be received in Centurion Bank. We see this as a contradiction. As already mentioned the appellants have raised the issue that there was no propos....