TaxTMI 
TaxTMI 
2007 (8) TMI 64
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. Ltd., Singapore). The said goods were exported under five shipping bills all dated 15-12-1998 in terms of a contract dated 2-11-98 entered into by M/s. Advance Exports with M/s. Wajilam Export of Singapore. The goods were exported under claim for DEPB at the declared value of US $ 18 per CD Rom. In support of the value, the appellants produced on record the invoices under which the same were procured by them from the Indian Manufacturer M/s. Padmini Polymers Pvt. Ltd. The goods were cleared by M/s. Padmini Polymers under AR-4 at the purchase price of Rs. 750/- per pc. The payment for the said goods was made by M/s. Advance Exports to M/s. Padmini Polymers vide cheque dated 15-2-1999 drawn on State Bank of Travancore, Ahmedabad. The goods were assessed on the shipping bill and order for clearance for export under Section 51 of the Customs Act was passed and the goods exported. 3. However, subsequently on the basis of some information as regards the over-valuation of CD Roms, investigations were initiated. During the course of investigation, Revenue found that part of the export realization was received from M/s. Wajilam Exports, Singapore whereas an amount of US$ 8,29,993.50 w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the entire realization stands received by the appellant and the fact that a part of the same has come directly from Singapore and another part stands remitted from Dubai, cannot be made the basis for discounting the value. He also draws our attention to the 'activity report' of the Bank produced on record by learned Consultant, Shri Mondal appearing for the Revenue, which makes it clear that the remittance was with reference to the export made to M/s. Wajilam Exports. He also draws our attention to the various decisions, in support of his above submissions and particularly referred the four cases of import-export of CD Roms mentioned in the show cause notice and submits that all the relevant cases of the Revenue stand rejected by the Tribunal. The various pleas raised by the appellant stand summarized as follows :- (i) Declared value of export goods cannot be rejected under Section -14 of the Customs Act, 1962 in absence of contemporary exports of identical goods at lower price. • Kanhaiya Exports (P) Ltd. v. Commr. of Cus. (Port,) to Kolkata - 2006 (204) E.L.T. 295 [para 3(b)] • Commr. of Cus., Calcutta v. Ramapati Exports. - 2002 (142) E.L.T. 77 [paras 11 & 12] ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n appropriated by the bank towards the said export invoices. (viii) Even under the Foreign Exchange Regulation Act, the remittance by G.A. International has been accepted towards the export invoices and no objection has been raised by the RBI. (ix) The bank activity report relied upon by the department shows that the amount remitted by G.A. International is on account of Wajilam Exports. (x) Assuming while denying that there was over-valuation of the goods exported under DEPB claim, the customs have no jurisdiction to pass an order restricting the DEPB credit and the same can only be done by the DGFT authorities. • Polynova Chemical Industries v. Commr. of Cus., Mumbai - 2005 (179) E.L.T. 173 (Tri.-Mum). • Alphonse Joseph v. Commr. of C.Ex. & Cus, Bangalore - 2006 (204) E.L.T. 487 (Tri-Bang). • Kobian ECS India Pvt. Ltd. v. Comm. of Customs, Mumbai - 2003 (157) E.L.T. 662 (Tri.-Mum). • Adani Exports Ltd. v. Assistant Commr. of Cus., Cochin - 2006 (199) E.L.T. 613 (Tri.- Bang). 6. As against the above submissions, learned Advocate Shri Mondal has drawn our attention to the fact that M/s. Wajilam Exports was a partnership firm of two Gujaratis and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the department by conducting any investigation at the manufacturer's end. No statement of M/s. Padmini Polymers stand recorded. In fact, we note that M/s. Padmini Polymer are engaged in the manufacture of CD Rom, which they are supplying to various merchant importer. Tribunal in the case of Commissioner of Customs, Kandla v. Crown international - 2006 (203) E.L.T. 120 (Tri.-Mum.) has accepted the sale price of Rs. 640/- per pc. by the same M/s. Padmini Polymers. Similarly M/s. Padrnini Polymers are also engaged in the export of goods themselves. Such export price was also accepted by the department. Further, in terms of the Board Circular No. 69/97, dated 8-12-1997, if the export price within 150% of the purchase price, the same is ought to be accepted by the Revenue as held by the Tribunal in the case of Commissioner of Customs, Kolkata v. Ramapati Exports - 2002 (142) E.L.T. 77 (Tri.-Kol.), Commissioner v. Balaji Industrial and Agricultural Castings Pvt. Ltd. - 2005 (188) E.L.T. 318 (Tri.) and Cannon Steel v. Commissioner -2002 (145) E.L.T. 490 (Tri.). 10. Similarly, we find that the Tribunal in the case of Wescon Exports Pvt, Ltd. v. CC & CE, Goa - 2007 (78) R.L.T. 175 (C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Sd/- (M. Veeraiyan) (Archana Wadhwa) Member (Technical) &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... example, 33 DEPB licences issued to PPL involving DEPB credits of Rs. 19,44,93,767/- was cancelled by DGFT vide their order dated 30-8-2001 and they went to Settlement Commission and got the issue settled. There were also disputes about exports of CD Roms (supplied by PPL) through other exporters. (d) M/s. Advance Exports purchased 60,000 CD Roms from the above said PPL at a price of Rs. 750 per piece in pursuance of a contract dated 2-11-1998 with the said PPL and payments amounting about Rs. 3.84 crores were made by cheque dated 15-2-1999 by M/s. Advance Exports. (e) The money paid by M/s. Advance Exports to PPL has promptly been deposited to the account of M/s. Adani Exports. (f) The export consignments by Advance Exports covered by 5 shipping bills dated 15-12-1998 were consigned to M/s. Wajilam Exports, Singapore. Out of 10,80,000 US $ came due from Wajilam Exports, only 2,50,006.50 US $ from M/s. Wajilam Exports on 25-10-99 and the balance of 8,29,993.50 US $ came in Jan., 2000 from the account of M/s. G.A. International, UAE. (g) Commissioner held that sale price of CD Roms supplied by PPL to Advance Exports is highly over valued; sale proceeds received by PPL w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 18. To accept the transaction value for exports, the transaction between the exporter and the foreign based importer should be at arms' length, the goods should have been "ordinarily sold" and there should be no additional consideration. 18.1 Wajilam Exports, Singapore, have been supplied with consignments valued over Rs. 4 crores which was not covered by any LC or assurance for payments for the consignments which is normal practice. In fact, there has been considerable delay in receiving the payments. There is no payment of interest involved for such delay in the payment which is rather for unusual. Above all, nearly, 75% of the payments came from an Adani group of company M/s. G.A. International, Dubai. India based merchant exporter M/s. Advance Exports export to Wajilam Export, Singapore, the money has come from Dubai based firm managed by one of the partners of I Advance Exports. 18.2 G.A. International were one of the notices and Shri R.S. Adani also one of the notices and though they had the details, wherewithal at their command to explain why they have made payments on behalf of Singapore based Wajilam firm, they have not chosen to do so. 19. The purchase of CD Rom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se when any exporter seeks to claim the benefit, the burden should be on him. 21.1 In this particular case, serious doubts have been raised about the purchase price of Advance Exports form PPL inasmuch as, PPL is not owning any copyright and that money received by them has been promptly diverted to Adani Exports Serious doubts have also been raised about receiving of substantial part and export proceeds not directly from Singapore buyer but from G.A. International which is a group company which was incidentally managed by partner of M/s. Advance Exports. 21.2 Regarding Board's Circular No. 69/97-Cus., dated 8-12-1997 on accepting export value based on PMV, it is a guideline to assessing officers and cannot bar any investigation based on intelligence. 21.3 The power of the Customs Department to conduct overseas investigation is limited. In this case, the Department has proved by documents that the purchase for the purpose of export and the exports are unusual and tainted and disclosed the material to the concerned parties. 22. In the light of the disclosure, it was up to the notices namely, Advance Exports, M/s. G.A. International, PPL to prove that the purchase price of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Sd/- (M. Veeraiyan) &nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsp; Member (Judicial) (Pronounced on 13-6-2007) Appeal No. C/206 to 209/04 27. [Order per : Jyoti Balasundaram, Vice-President]. - I have heard both sides on the difference of opinion between the members of the original bench, who heard the above appeals. 28. Learned Member (Judicial) has proposed setting aside of the impugned order of the Commissioner, who had lowered FOB value of CD ROMs exported by Advance Export resulting in lowering of DEPB credit and imposed penalties on the exporter and the other three appellants, accepting the contention of the exporters that the goods in question were not overvalued, while learned Member (Technical) has proposed upholding of the DEPB credit to the extent of Rs. 48,23,968/- and agreed with the learned Member (Judicial) that penalties on all the appellants are required to be set aside. 29. The reasoning of the learned Member (Technical) is inter alia that M/s. G.A. International, who made nearly 75% of the payment for the goods, and that Mr. R.S. Adani, on whom penalties were proposed to be imposed, did not come forth to explain why they had made payments on behalf of the Singapore based firm M/s. Wajilam Exports to wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k has clarified that payment to the exporter by M/s. G.A. International was by order of M/s. Wajilam Exports. Further, the fact that payment made by the exporter to the supplier of the goods was deposited in the account of the exporter has been explained by his Chartered Accountant whose certificate shows that there were running transactions between PPL and the exporter. 31. Further, the Revenue also does not dispute that the facts of the present case are more or less similar to the facts of the Crown International case cited supra wherein sale price of CD ROMs manufactured by PPL (Rs. 640.00 per piece) to Crown International and the export price of Rs. 761.40 per piece of Crown International was accepted. 32. Lastly, the burden of establishing the correct value of the goods lies upon the Revenue for the reason that the exporter is not claiming any benefit of exemption but is claiming DEPB benefit which is consequent upon valuation. In this case, the department has not discharged the burden cast upon it to show that the values of goods have not been correctly declared and that the goods have been overvalued for the purpose of claiming higher DEPB benefit. 33. For the....