AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 1253
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.... shipping bills as well as past exports made by that exporter and merchant exporters related to the Directors of M/s. Rochees Watches Pvt. Ltd. It was noticed that FOB of all such exports were over-valued by the exporters calling for determination thereof as follows : Export made by Manufacturer Exporter M/s. Rochee Watches Pvt. Ltd. Past/Live Consignment details Period FOB declared FOB determined Past Exports 1-1-2000 to 5-8-2004 51,21,17,945 14,17,10,591 Live consignments covered by Shipping Bill Nos. 1002 & 1003 both dated 21-8-2004 filed in Air Cargo, Jaipur 21-8-2004 87,95,880 15,00,000 Live consignments covered by Shipping Bills Nos. 1023671 to 1023676 all dated 10-1-2005 filed in ICD, Jaipur 2004-05 2,35,21,894 44,75,000 MERCHANT EXPORTER APPELLANTS Exporters Period of Export FOB declared FOB determined M/s. Rochi Ram & Sons 1-1-2000 to 5-8-2004 15,55,48,124 4,11,95,555 M/s. Jaipur Time Industries 1-1-2000 to 5-8-2004 9,87,62,865 2,51,03,300 M/s. Rajasthan Watch Manufacturers 1-1-2000 to 5-8-2004 10,52,01,906 2,74,85,687 M/s. India Watch Parts Manufacturers 1-1-2000 to....
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....ndia Watch Pvt. Mfr. 82071770 19149228 62922542 14963063 3566987 11396076 HMD Exim Pvt. Ltd. 57625800 15900000 41725800 9876180 2684960 7191220 Prakash Sales Agency 6456456 1904000 4552456 1008000 304640 703360 Total 1017784866 272448361 745336505 176152235 47746273 128405962 1.4 Market enquiry conducted by STF in India and overseas revealed that there was misdeclaration of value of exports made by the exporter appellants to defraud exchequer making undue claim of DEPB. Learned adjudicating authority upon hearing the exporter and examining evidence before him passed Order of adjudication dated 30-9-2009 with the following consequences : Appeal No. C/544/2011 M/s. Rochees Watches Private Limited (1) Declared FOB value Rs. 51,21,17,945/- in respect of 'Quartz analog wristwatches' exported from Air Cargo Complex, ICD (Rajsico) & ICD (Concor), Jaipur during 1-1-2000 to 5-8-2004 by M/s. Rochees Watches Private Limited, Jaipur was rejected and PMV was determined as Rs. 14,17,10,591/- under Section 14(1) of the Customs Act, 1962 for allowing DEPB benefit by the comp....
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....f Rs. 15,00,00,000/- (Rupees fifteen crores) was imposed on M/s. Rochees Watches Private Limited, Jaipur under Section 114(i) & (iii) of the Customs Act, 1962. Appeal No. C/545/2011 Shri Ishwar Das Moolrajani Penalty of Rs. 10,00,00,000/- (Rupees ten crores only) was imposed on Shri Ishwar Das Moolrajani, Managing Director/Partner of M/s. Rochees Watches Private Limited, M/s. Rochi Ram & Sons, M/s. Jaipur Time Industries, M/s. Rajasthan Watch Manufacturers, M/s. India Watch Parts Manufacturers, Jaipur under Section 114(i) & (iii) of Customs Act, 1962. Appeal No. C/546/2011 Shri Nanak Das Moolrajani Penalty of Rs. 5,00,00,000/- (Rupees five crores only) was imposed on Shri Nanak Das Moolrajani, Director/Partner on Shri Nanak Das Moolrajani, Director/Partner of M/s. Rochees Watches Pvt. Ltd., M/s. Rochi Ram & Sons, M/s. Jaipur Time Industries, M/s. Rajasthan Watch Manufacturers, M/s. India Watch Parts Manufacturers, Jaipur under Section 114(i) & (iii) of Customs Act, 1962. Appeal No. C/561/2011 M/s. Rochi Ram & Sons, Jaipur (1) Declared FOB value Rs. 15,55,48,124/- in respect of 'Quartz analogue wristwatches' exported from Air Cargo Com....
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.... Jaipur was rejected at PMV was determined as Rs. 2,74,85,687/- under Section 14(1) of the Customs Act, 1962 for the purpose of determination of DEPB benefit of the competent authority. (2) 'Quartz analog wristwatches' of which PMV determined as - Rs. 2,74,85,687/- (Declared FOB value of Rs. 10,52,01,906/-) under Section 113(d) & (i) of the Customs Act, 1962 were confiscated the goods having been exported and are not available for confiscation. Redemption fine of Rs. 1,31,21,000 (Rupees one crore thirty one lakhs twenty one thousand only)/-, was imposed on M/s. Rajasthan Watch Manufacturers, Jaipur in lieu of confiscation under Section 125 of the Act. (3) Penalty of Rs. 2,75,00,000/- (Rupees two crores seventy five lakhs only) was imposed on M/s. Rajasthan Watch Manufacturers, Jaipur under Section 114(i) & (iii) of the Customs Act, 1962. Appeal No. C/559/2011 M/s. India Watch Parts Manufacturers (1) Declared FOB value Rs. 8,20,71,770/- in respect of 'Quartz analog wristwatches' exported from Air Cargo Complex/ICDs, Jaipur during 1-1-2000 to 5-8-2004 by M/s. India Watch Parts Manufa....
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....(1) of the Customs Act, 1962 for the purpose of determination of DEPB benefit by the competent authority. (2) 'Quartz analog wristwatches' of which PMV determined as Rs. 19,04,000/- (Declared - FOB value of Rs. 64,56,456/-) under Section 113(d) & (i) of the Customs Act, 1962 were confiscated and such goods having been exported and not available for confiscation, redemption fine of Rs. 7,03,000/- (Rupees seven lakhs three thousands only) was imposed on M/s. Prakash Sales Agency, Jaipur in lieu of confiscation under Section 125 of the Act. (3) Penalty of Rs. 20,00,000/- (Rupees twenty lakhs only) was imposed on M/s. Prakash Sales Agency, Jaipur under Section 114(i) 86 of the Customs Act, 1962. Appeal No. C/547/2011 Shri Hargun Das Nebhnani (1) Penalty of Rs. 50,00,000/- (Rupees fifty lakhs only) was imposed on Shri Hargun Das Nebhnani, Director/Partner of M/s. HMD Exim Pvt. Ltd., and M/s. Prakash Sales Agency, Jaipur under Section 114(i) & (iii) of the Customs Act, 1962. In addition to the aforesaid consequences, the Bonds & Bank guarantees executed by the appellants for release o....
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....lants, the consequence of the allegation is mainly four fold. First one is denial of amount of DEPB claimed, the second one is confiscation of live as well as past consignments, the third consequence is rejection of the FOB value declared by appellant exporters and fourthly imposition of penalty and confiscation which is unwarranted. 2.4 Appellants submitted that market enquiry was made by Revenue to ascertain PMV of the aforesaid exports while exporting, all the shipping bills were accompanied by the cost statements. But Revenue adopted cost construction method to reduce the FOB declared and DEPB claimed is reduced arbitrary, determining low cost of manufacture. Such approach has been followed against live as well as past consignments. 2.5 Panchnamas were drawn by investigating team only in respect of one live consignment while no such panchnama drawn in respect of seven other live consignments. Samples drawn also varied with the inventories recorded in the panchnama. So also the samples were sent openly without being sent in sealed cover. Revenue objected to such plea. But ld. counsel for the appellants replied that the Miscellaneous Applications have been filed i....
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....to be cross-examined, that was not allowed. 2.9 Placing reliance on pages 12 and 13 of the Volume 2 of paper book, similar objection was raised by ld. Counsel on the ground that both pages were identically typed and prices were written by parties in hand as required by customs officers. Cross-examination of the persons who examined the goods and the officers who were involved in the process were not allowed. That violated the principles of natural justice. It was further submitted by appellant that Thakur Das Khatri and Sons whose name appeared on pages 11 and 13 of the above paper book, filed affidavit averring that they signed the report according to the will of the officers who brought the goods for examination. Similar affidavit was also from Manohar Lal, Ratilal Lodhia of Rama Watch Industries (page 88 of paper book volume-1). Such affidavits were ignored to the detriment of justice. Accordingly, when Authors of the market report appearing at page Nos. 10, 11, 12, 13 and 88 of the above paper book were requested for cross-examination, that was not allowed. Therefore, result of market enquiry report cannot be used against the appellants being done behind their back. To ....
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....d that there existed a gold register maintained by appellant which proved the usage of gold in making watch components. That gold register was seized by Revenue and given back later to the appellants. Such evidence deserves consideration by Tribunal. 3. Shri Amresh Jain, ld. Departmental Representative submitted that following material facts contributed to the demand :- (i) M/s. Rochees Watches Pvt. Ltd. in Appeal No. C/544/2011 was manufacturer appellant and the appellants Shri Ishwar Das Moolrajani in Appeal No. C/545/2011 as well as the appellant Shri Nanak Das Moolrajani in Appeal No. C/546/2011 were directors of M/s. Rochees Watches Pvt. Ltd. (ii) Shri Hargun Das Nebhnani in Appeal No. C/547/2011 was an employee of M/s. Motilal Watch Co. at Jaipur owned by Shri Ishwar Das Moolrajani as proprietor. That concern is not in appeal. (iii) M/s. Prakash Sales Agency in Appeal No. C/556/2011, M/s. Rajasthan Watch Manufacturers in Appeal No. C/557/2011, M/s. Jaipur Time Industries in Appeal No. C/558/2011, M/s. India Watch Parts Manufacturers in Appeal No. C/559/2011, M/s. HMD Exim Private Lt....
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.... such value was remitted from Dubai. Investigation precisely found out that the value declared to Dubai customs was 1/10 of the value declared to Indian customs. There was over-valuation of the goods compared to quality of the goods exported and the market value thereof was found to be very low. (xi) Merchant-exporters who appeared in Sl. Nos. 51 to 56 of cause list in Appeal Nos. C/556/2011 to C/561/2011 were the name-lenders to M/s. Rochees Watches Pvt. Ltd. They formed part of group of the manufacture exporter appellants. They were all operating from the campus of M/s. Rochees Watches Pvt. Ltd. having no place of business of their own. Those six merchant exporters were dummy of M/s. Rochees Watches Pvt. Ltd. 4.1 Ld. Counsel urged that Customs Authority have no power to decide on DEPB issue since DGFT is the Authority on that subject. Market enquiry to ascertain PMV was unwarranted since value cap was prescribed in respect of the goods exports at the relevant point of time. DEPB is a fiscal incentive and that it has no character of duty. Appellants were governed partly by the Trade Policy of 1997-2002 and 2002-2007. Relying on para 7.36(i)(A) of the 1....
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....12 (281) E.L.T. 241 (Tri.-Mum.), it has been held that Customs authority has no jurisdiction on DEPB issues which is the domain of DGFT. Also relied on the decision in the case of Pradip Polyfils Pvt. Ltd. v. UOI - 2004 (173) E.L.T. 3 (Bom.) for such proposition. 5.1 On the point of cost of production, it was submitted by the appellants that FOB declared to customs in respect of 8 (eight) live consignments finds place at page 923 of vol. 4 of paper book (page 5 of the show cause notice). Examining the elements constituting the FOB value declared a cost sheet was filed on 31-8-2004 (Ref : Para 5 of SCN). Reference may be made to page 850 of vol. 4 of the paper book (page 11 of SCN). Thereafter, reviewing the elements of the cost of manufacture, the appellant further revised cost sheet on 10-9-2004. Such chart finds place at page 850 of the volume 4 of paper book (page 18 of SCN) read with page 11 of SCN. The original cost sharing manufacture filed on 31-8-2004 (para 5 of SCN), was first revised on 10-9-2014 and was lastly revised on 24-9-2004. The last revised statement exhibited correct FOB which should not be disturbed. 5.2 Explaining cost revision, it was submitte....
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.... price of manufactured goods is irrelevant to determine the FOB. PMV and FOB are different concepts altogether and FOB and PMV should not be confused because both are different as has been held by Tribunal in the case of PEE AAR Exim v. C.C., Amritsar - 2012-TIOL-1960-CESTAT-DEL serving different purposes in the trade. To further submit that FOB and PMV are different and PMV does not determine FOB value of export, reliance was placed on decision of Kanak Metal Industries v. C.C., Jodhpur - 2012 (275) E.L.T. 115 (Tri-Del). That decision was maintained by Apex Court in the case reported in 2013 (293) E.L.T. A25 (S.C.). In this case also meaning of PMV and FOB was explained. FOB is considered for grant of DEPB. Whereas PMV is the value which is the sale price of the goods in the domestic market. The FOB may certainly vary with PMV because FOB includes profit expected on exports. 7. Ld. Counsel placing page 199 to page 224 of volume 1 of paper book submitted that visit by the officials to the factory premises of the appellant on 22-9-2004 resulted with inventory of 22,024 gold plated unfinished watch cases. Such cases were found without any identification mark since those were ....
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....s regard. Decision in Frost International Ltd. was maintained by the Supreme Court as reported 2007 (215) E.L.T. A103 (S.C.). 8.3 Appellants further relied on the decision of Tribunal in the case of CC (Exports), Mumbai v. Unimac (India) Ltd. - 2006 (204) E.L.T. 95 (Tri.-Mum.) to support that FOB value of export price cannot be determined with reference to market price in India. It was submitted that the moment the FOB is questioned by the Customs Authorities, burden of proof lies on them to prove that there was mis-declaration. For this proposition, he relied on the decision in the case of Advance Export v. CC, Kandla - 2007 (218) E.L.T. 39 (Tri.-Ahmd.). 8.4 It was submitted by appellants that when the entire FOB value was realised and foreign remittances came to India, the FOB values appearing in shipping bills do not call for disturbance. This also establishes that appellant followed transaction value principle for export. For such proposition, reliance was placed on the decision of Tribunal in the case of Ajay Apparels v. CC (Port), Kolkata - 2006 (204) E.L.T. 131 (Tri.-Kolkata) (paras 3.1 to 3.3 and para 4). Further reliance was placed on the decision of the Tr....
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.... when all facts and circumstances of each case are different. Presumption of existence of similar factual situation and circumstances causes prejudice to the interest of justice. Therefore, without cogent evidence brought by the Customs authorities to prove that past consignments were mis-declared, there is no scope to deal such consignments in par with live consignments. 10.1 Appellants further submitted that while making watches the appellant had used gold in some of the components used therein. Gold purchase were recorded in gold register called salt register by the appellant. (Ref : to Volume No. 10 of the paper book). Statements were recorded about the use of gold and such use is verifiable from the salt register. Maintenance of salt register is verifiable from the para 11 of the show cause notice at page 848 of the volume IV of the paper book. That register was examined by the customs authorities and contents thereof verified from the statement of Sri Iswar Das (paras 12 and 13 of the show cause notice). All statements recorded by customs authorities were exculpatory and cannot be used against the appellants. 10.2 Placing reliance on para 17 of show cause noti....
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....finding any discrepancy or material irregularity in the figures. Appellants relied on the decision in the case of ITC Ltd. v. CCE - 2004 (171) E.L.T. 433 (S.C.) (para 48) to make such proposition. 13.1 On the issue of oversea enquiry, it was reiterated by the appellant that the officer who conducted enquiry abroad was adjudicating authority. But Revenue objected to such stand on the ground that this issue was not before the authorities below. Appellant did not press such plea further. However, appellant pleaded that market enquiry report relied by that officer is contrary to law since no one could be judged of his own cause. 13.2 Placing reliance on pages 504-506 of volume-II of the paper book, it was submitted by appellants that unsigned and unauthenticated documents were appearing therein. Such documents are not evidence and cannot be used against the appellants. These were not annexed to letter dated 19-6-2008 of the Counsel General of Dubai addressed to DG, DRI, India. That has no relevance in law not being authenticated documents and cannot be used against the appellants. Placing reliance on pages 467 to 486, it was submitted that those papers do not establish ....
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....e for confiscation shall not be confiscated. 16. So far as imposition of penalty under Section 113(d) of Customs Act, 1962 is concerned, it was submitted that such provision shall not apply since the goods exported were not prohibited goods. Similarly so far as penalty under Section 113(i) of Customs Act, 1962 is concerned, that shall be applicable to the case of the appellant only in the case of live consignments and not to past consignments and that too from the date when amendment to the law came into force. 17.1 On the question whether importers of Dubai were related persons of exporters, it was submitted on behalf of the appellants that valuation questioned in para 46 of page 42 of show cause notice (page 880 of Volume-IV of paper book) has no basis without disclosing manner in which parties were related in SCN itself. In order to make allegation of related persons, it is essential for Revenue to show that there was mutual interest. Revenue was required to discharge its burden of proof. But it failed to do so. When show cause notice nowhere depicts the manner of relation of parties and whether they were mutually benefited by virtue of their relation, if any. Th....
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....reliable to be adopted as a FOB value. 17.5 Appellants also urged that Revenue's allegation that there was no domestic sale without any transport evidence is baseless. Revenue ignored the fact that watches were not bulky goods and can be transported without vehicles. Burden of proof to show that the goods were not capable of being transported without carrier was not discharged by Revenue. The allegation therefore, fails in view of the principles laid down in the following judgments :- (i) Mirah Exports Pvt. Ltd. v. Collector of Customs [1998 (98) E.L.T. 3 (S.C.)] (supra). (ii) CC, Calcutta v. South Indian Television Pvt. Ltd. [2007 (214) E.L.T. 3 (S.C.)]. (iii) Sounds N. Images v. Collector of Customs [2000 (117) E.L.T. 538 (S.C.)]. 18. It was further submitted by the ld. counsel for appellants that they had not acted mala fide and whether their intention was mala fide or not, guidelines given by the Hon'ble Supreme Court in paras 24 and 26 in the case of Uniworth Textiles v. CCE, Raipur [2013 (288) E.L.T. 161 (S.C.)] applies. Ld. Adjudicating Authority had no regard to such princ....
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....d such transaction are illegal under law. Modality of valuation of goods is stated in the judgment in para 3 at page 2 and following the law laid down in the case of Om Prakash Bhatia judgment (supra). Adjudicating authority has therefore, rightly determined FOB which is basis for grant of DEPB. He further submitted that principle laid down in the Om Prakash Bhatia judgment was reiterated in the case of CCE & C, AP v. Suresh Jhunjhunwala [2006 (203) E.L.T. 353 (S.C.)] (para 20). 22. Learned DR explained that appellants were given 10 opportunities to explain their case even before issuance of Show Cause Notice (SCN). That is stated in different paragraphs thereof. But they failed to defend. Para 2 of SCN at page 84 of volume-IV of paper book shows that the exports (both past and live) made by appellants were overvalued to make undue claim of DEPB. The watches exported were "Geneva", "Yasoda" "Rivera" and "Star" brands. Statements were recorded from different persons in the course of investigation. Sri Ishwar Das in his statement recorded on 31-8-2004 as extracted in para 4 at page 842 of volume-IV of the paper book stated that appellant had never exported gold plated watches....
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....se of gold; and (4) contradictory statements were given by the parties to divert attention of Investigation. All such factors contribute to the questionable modus operandi of appellants. 25.1 Placing reliance on cost sheet dated 31-8-2004, ld. DR further submitted that when department noticed that the said statement was fabricated and unreliable, appellant came on 10-9-2004 to submit another cost sheet showing lower cost of components. That was also false which was established from the statement recorded. The item covered by that cost sheet as appearing in cost sheet dated 31-8-2004 at page 5 of show cause notice was Rs. 195/-. But that was reduced to Rs. 45/- in the cost sheet of 10-9-20014 as per para 14 of SCN at page 11 thereof (ref. page 854 of volume-V of paper book). Para 14(1) shows that cost sheet dated 10-9-2004 was fabricated. Even though there was reduction in the cost, as appearing at page 11 of SCN, the cost of watches of each type was shown to be abnormally high. 25.2 When investigation found that there were contradictory statements and false cost sheets were filed, search to the premises of the manufacturer was made on 14-9-2004. Sampling of domestic....
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....para 28 of SCN of volume-4. When investigation proceeded to analyze cost of components used in the watches as is exhibited by pages 872-880 of the paper book No. 4 and detailed analysis was done in para 45 of Order-in-Original, it revealed that all the cost sheets were engineered against Revenue. 26.3 Revenue analysed the cost of goods exported during the years 1999-2000 to 2000-2005 exhibited in Annexure "C" to SCN at pages 892 to 895 volume-4 of paper book. Cost of manufacture appearing in the said Annexure "C" when analyzed in detail with profit margin at pages 937 to 945 of volume-4 of paper book, that enabled investigation to determine PMV which demonstrated false FOB reflected in Shipping Bills. 27.1 Placing reliance on para 29 of SCN appearing at page 862 of volume-IV of paper book, ld. DR stated that cost sheet presented on 23-1-2003 was proved to be false. Chartered Accountant of the appellant issued false certificate. Falsification of documents was made by exporter-appellant. Such falsification was again confirmed by version of exporter-appellant in para 22 volume VII of paper book. Brand name was added by the exporter-appellant to the certificate issued b....
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....y by letter dated 19-9-2005 informed DRI that the value declared to Dubai Customs was 10 times lower than the value declared to Indian Customs. All such facts appear in para 50.2 of SCN. Inviting attention to para 50.3, ld. DR submitted that by letter dated 20-7-2005, the Consulate General of India in Hong Kong reported that very high value was declared to Hong Kong Customs. But on detection by Customs, that was lowered by the importer revising the value stated in the Bill of Entry thereat. Such lowering was done to get rid of mis-declaration. Hong Kong Customs informed that the information revealed by letter dated 20-10-2005 was neither disclosable to third party nor usable in any proceedings. Inviting attention to para 50.4 of SCN, learned DR submitted that overvaluation was established fact. But investigation was handicapped due to embargo of UK law. 28.3 Revenue also relied on the decision of the Tribunal in the case of Mahalaxmi International Exports v. CC, Jaipur [2004 (169) E.L.T. 68 (Tri.-Del.)] to submit that the report of the foreign authority is reliable and Apex Court in the case of Manohar Rajaram Chhabria and Orson Electronics v. Collector [1997 (93) E.L.T. A1....
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....y the Hon'ble Apex Court in the case of Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd. [1996 (82) E.L.T. 441 (S.C.)]. Revenue further relied on the decision of Hon'ble High Court of Andhra Pradesh in para 47 in the case of Sravani Impex P. Ltd. v. ADG, DRI, Chennai [2010 (252) E.L.T. 19 (AP)] to submit that violation of foreign exchange law is to be dealt severely. Rejoinder of appellant 32. In rejoinder, ld. advocate for appellant submitted that cost construction is no prescribed mode of valuation under law. Therefore, Revenue's attempt to value the cost of the goods exported following cost construction method is not warranted. Reliance was placed on the decision in the case of C.C., Mumbai v. Vishal Exports Overseas Ltd. [2007 (209) E.L.T. 331 (S.C.)], to submit that cost construction method is not applicable. 33. Relying on the decision of the Apex Court in the case of Om Prakash Bhatia v. CC, Delhi (supra), appellant submitted that PMV in India has no relevance to determine FOB, since FOB is export value to be declared and the value so declared is to be realised. Therefore, that cannot be challenged by Revenue under any misconstruction that FOB....
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....g Customs having been rectified, there is no basis to discard the FOB declared by appellant to Hong Kong Customs (ref : page 764 of Volume-3 of paper book). Page 768 of Volume-3 of paper book supports appellants' declaration in other transactions made to Hong Kong Customs. So also, page 782 of the said paper book supports this proposition. 38. According to the appellants, when Revenue failed to discard appellants arguments on the time bar issue and three years period being time-limit to deal DEPB cases as has been held by Tribunal in the case of Colourtex v. CC, Kandla [2012 (280) E.L.T. 225 (Tri.-Ahmd.)], Revenue had no authority to adjudicate a matter which is time-barred. Similarly, when Revenue did not rebut the arguments of the appellant on confiscation issue, such confiscation became unwarranted. 39. Lastly, it was submitted that points on which a decision is made that becomes precedent and no other points. Therefore, Revenue not arguing on the issues dealt by the judgments cited by the appellants, rendered the adjudication fatal as has been held in the case of State of Orissa v. Sudhansu Sekhar Misra & Others [AIR 1968 SC 647], Similarly, irrelevant decisions....
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....be exported by land, a bill of export in the prescribed form. Provided that the Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically, allow an entry to be presented in any other manner. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall make and subscribe to a declaration as to the truth of its contents."                         [Emphasis supplied] 42.1 Determination of value of export is mandate of Section 50 of the Act following the meaning of the term "assessment" defined by Section 2(2) thereof. The term value is defined by Section 2(41) of the Act to serve the purpose of Section 14 of the Act. Therefore, it is considered necessary to reproduce Sections 2(2), 2(41) and 14 of the Act as under for convenience of reading : Section 2(2) "assessment" includes provisional assessment, self-assessment, re-assessment and any order of assessment in which the duty assessed is nil; Section 2(41) "value", in relat....
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....so to do. It may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the purposes of this section - (a) "rate of exchange" means the rate of exchange - (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b) "foreign currency" and "Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).                         [Emphasis supplied] 42.2 Examining jurisdiction of the customs authority to determine value of exports whether....
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....ified and true in all material particulars which, among others, shall include the amount representing :- (i) the full export value of the goods, or (ii) if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions express to receive on the sale of the goods in the overseas market, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed manner". 13. Apart from the aforesaid provision, for finding out the true export value of the goods. Section 14 of the Act provides relevant procedure. Section 14 is to be read along with Section 2(41), which defines the word 'value'. Section 2(41) reads as under :- "S.2(41) - "value", in relation to any goods, means the value thereof determined in accordance with the provisions of sub-section (1) of section 14." Thereafter, relevant part of ....
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....lue in relation to any goods means the value thereof determined in accordance with the provisions of sub-section (1) of Section 14. Therefore, if the export value of the goods is to be determined, then even if no duty is leviable, the method (mode) for determining the value of the goods provided under Section 14 is required to be followed. Section 14 specifically provides that in case of assessing the value for the purpose of export, value is to be determined at the price at which such or like goods are ordinarily sold or offered for sale at the place of exportation in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale. No doubt. Section 14 would be applicable for determining the value of the goods for the purpose of tariff or duty of customs chargeable on the goods. In addition, by reference it is to be resorted to and applied for determining the export value of the goods as provided under sub-section (41) of Section 2. This is independent of any question of assessability of the goods sought to be exported to duty. Hence, for finding out whether the export value is truly ....
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....to the contrary by appellants. Revenue discharged its burden of proof making allegation of mis-declaration relying on evidence gathered from abroad and also basing on various other contributory factors as well as on the basis of remittance came from Hong Kong to Dubai and reduction of declared value before Hong Kong Customs upon detection by them. Added to that, claim of use of gold in making watch components received low weightage by test results of the Government recognized laboratory. 43.2 Contention of Revenue as to mis-declaration of FOB was established when the appellant M/s. Roche Watches changed its stand on cost of manufacture of watches filing three cost statement on three different dates, i.e., on 31-8-2004, 10-9-2004 and 24-9-2004. Repeated revision of such statements gives rise to the inference that the records of the appellants were not reliable and certificate issued by the Chartered Accountant was false. Further, that certificate being undated, were repeatedly used by the manufacturer appellant on several occasions. It became further clear from the significant variation in the cost elements without satisfactory explanation thereon. All such factors proved th....
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....e of goods under export, in business of any special circumstances indicated under Section 14(1) of the Act read with Rule 4(2) of 1988 Valuation Rules. The said para 16 of the judgment is reproduced below for reference : "16. It is settled that the procedure prescribed under Section 14(1) of the Act and particularized in Rule 4 of the 1988 Rules has to be adopted to determine the value of goods entered for exports, irrespective of the fact whether any duty is leviable or not. It is also trite that ordinarily, the price received by the exporter in the ordinary course of business shall be taken to be the transaction value for determination of value of goods under export, in absence of any special circumstances indicated under Section 14(1) of the Act and Rule 4(2) of the 1988 Rules. The initial burden to establish that the value mentioned by the exporter in the bill of export or the shipping bill, as the case may be, is incorrect lies on the Revenue. Therefore, once the transaction value under Rule 4 is rejected, the value must be determined by sequentially proceeding through Rules 5 to 8 of the 1988 Rules. (See : Commissioner of Customs (Gen), Mumbai v. Abdulla Koyloth....
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....rted into at the same time whereas Rule 6 provides for the computation of transaction value on the basis of the value of similar goods imported into India at the same time as the subject goods. In the absence of contemporaneous imports into India, the value is to be determined under Rule 7 on the basis of a process of deduction contemplated therein. If this is not possible, then recourse must be had to Rule 7A, and if none of these methods can be employed to compute the transaction value, Rule 8 provides that the transaction value can be determined by using reasonable means consistent with the principles and general provisions of these Rules and sub-section (1) of Section 14 of the Act and on the basis of data available In India."                         [Emphasis supplied] 48. It may be stated that during the material period there was no specific export valuation rules for which the 1988 valuation Rules were held to have application to valuation of exports during the said period. Apex Court held that if for any reason data of contemporaneous exports of....
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.... statements relating to use of gold and also cost statements were revised by M/s. Roche Watches. Similarly, the Chartered Accountant deposed against the manufacturer-appellant as has been argued by Revenue which remained uncontroverted by the manufacturer-appellant leading cogent evidence to the contrary. Thus valuation done by the exporters became questionable warranting revaluation under Section 14 read with the provisions contained 1988 Valuation Rules as has been held by Apex Court in the aforesaid citations. Therefore, learned adjudicating authority granting fair opportunity to the appellant shall re-determine the value of the export both in respect of past and live consignment cases except the 29 provisional assessment cases. That shall serve interest of justice. 50. Of course, 29 Shipping Bills of the appellant manufacturer M/s. Roche Watches in the past were subject to provisional assessment and department did not find discrepancy in the declared FOB therein except one bill which was subjected to market enquiry and the figure prescribed by cap value was adopted. But this does not mean Customs is precluded to reassess the other shipping bill when aforesaid facts cont....
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....of export in the past and through live consignments. Therefore, all exports (both past and live consignments) to extent aforesaid are liable to valuation in terms of law laid down by the judgment of the Apex Court in Siddachalam Exports Pvt. Ltd. (supra). 54. Manufacturer exporter appellant's contention that the market enquiry done by the Revenue was unwarranted in view of value cap prescribed and cross-examination of the examiner as well as the Officers not allowed need not be addressed at this stage since valuation of past and live consignments are to be valued in the manner as has been held by the Apex Court in the case of Siddachalam Exports Pvt. Ltd. v. Commissioner of Central Excise, Delhi-III reported in 2011 (267) E.L.T. 3 (S.C.) and market enquiry is the last resort. If the data of contemporaneous exports of identical goods is not available, the procedure laid down in Rules 5 to 8 of the Valuation Rules, 1988 is required to be followed and market enquiry could be conducted only as a last resort. The adjudicating authority has to first make an exercise according to the law laid down in the case of Siddachalam Exports Pvt. Ltd. (supra) since manner of market enquiry ....
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....ating authority as to lapse of time. A case of overvaluation should not be sanctioned on the plea of time bar. Therefore, such a plea is rejected. It was also the contention of the appellant that there cannot be market enquiry beyond certain period prescribed by the Board's circular. Present case is a case where value of the export is to be determined in accordance with Valuation Rules, 1988 and that has been directed by this order to be carried. 59. Appellant argued that the adjudication is time-barred on the ground that there is no time-limit prescribed in law to determine FOB for grant of DEPB and it's judicially settled that reasonable period of three years may be considered as limitation for the completion of adjudication. But the facts of the case suggest that there is overvaluation of FOB during the period 1-1-2000 to 5-8-2004 and even thereafter by live consignments. Show cause notice was issued on 31-1-2008 and learned adjudicating authority completed adjudication on 30th September, 2009. There is nothing found wrong on the action of the learned adjudicating authority as to lapse of time nor a case of overvaluation should be sanctioned on the plea of time bar. Ther....