TaxTMI 
TaxTMI 
2019 (10) TMI 1336
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....sp; I reject the value of the goods in terms of Rule 8 of Export Valuation Rules, 2007 read with Section 17(4) of the Customs Act, 1962 and re-determine the value at the rate of Rs. 1,000/- (Rupees One Thousand) per piece in terms of Rule 5 of the Export Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962 thereby rendering the actual value of the said declared 9640 pcs of Leather Waist Coat under the cover of 8 (eight) Shipping Bills to be Rs. 96,40,000/- (Rupees Ninety Six Lakhs Forty Thousand only). (c) I diny the Drawback of Rs. 48,19,271/- (Rupees Forty Eight Lakh Nineteen Thousand Two Hundred and Seventy One only) sought to be claimed as per the declaration of the Shipping Bills. (d) I impose penalty of Rs. 1,00,00,000/- (Rupees one crore only) on RBT Exports Pvt. Ltd. under Section 114(iii) of the Customs Act, 1962. (e) I impose penalty of Rs. 50,00,000/- (Rupees fifty lakh only) on Sri Birendra Kumar Tiwari under Section 114AA of the Customs Act, 1962. 2. The brief fact of the ....
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....dered. 4. Being aggrieved by the impugned order the appellants have filed the present appeals. 5. Learned Advocate appearing on behalf of the appellants submitted that the impugned order is not correct as that the appellants have not violated the provisions of Customs Act, 1962 (for short "Customs Act") in order to avail undue duty drawback benefit. The department has not produced any evidence to establish that the appellant has made gross misdeclaration of value of the export goods. It is also submitted by the Learned Advocate that just by mentioning that the party has not produced the required documents, the allegation of overinvoicing cannot be established, as the 'Burden of Proof' lies with the department. 6. Learned Advocate has relied upon the decision of M/s. Peerless Consultancy Services Private Limited v. Commissioner of Customs (PORT), Kolkata; [2013 (291) E.L.T. 201 (Tri.-Kolkata)], wherein it is held that the burden of proof is on the department regarding overvaluation in absence of flow back of payment made to the merchant-exporters. It is, further, submitted that all the documents including the procurement invoices have been seized by the DRI a....
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....rts Overseas Limited, [2007 (209) E.L.T. 331 (S.C.)] regarding acceptance of FOB value, which was supported by the Bank Realisation Certificate (BRC). The Present Market Value (PMV) was also not obtained by the Department which is not legally correct. In the circumstances, Learned Advocate submitted that no case is made out for the misdeclaration of the export consignment and therefore confiscating the export goods and imposition of redemption fine is illegal, and also on the director of the company is also not sustainable. 11. Learned Departmental Representative supports the finding contained in the impugned order. 12. We have heard Learned Advocate appearing on behalf of the Appellant and Learned Departmental Representative on behalf of the Revenue. The issue to be decided in this appeal is as to whether the appellant has misdeclared the export consignment in respect of value thereof, which as per the department is highly inflated. The department has solely relied upon the report obtained from the CSIR-CLRI regarding composition and price of the export consignment. In this regard it will be appropriate to examine the report received from CLRI which is reproduced a....
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....R-CLRI report dated 15-11-2016 of the designated authority for the first sample tested appeared suspicious as it indicated manufacturing cost as "USD 30 to USD 40" which was not only in US dollars and not in Indian Rupees but also matching the declared export value of the product being tested as declared by the exporter in US dollars. The sample item on the other hand appears to be a very poor quality leather garment made by stitching up of various low quality cut piece leather trimmings. In response CSIR-CLRI, Chennai sent its second report dated 14-12-2016 which is effectively a copy of the earlier report dated 15-11-2016 with the only change being giving the manufacturing cost in INR instead of USD and addition of two lines towards the cost break-up. This test result is in variance to DRIs internal findings on visual inspection of the garments and informal market opinion which indicated their cheap quality and costing to be not more than Rs. 500-600 per piece (manufacturing cost including the cost of material). It is also brought to your notice that the exporter is quoting the value suggested by CLRI in his representations to DRI which you may like to ....
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....ver held that in case the export consignment cannot be compared with any other export or identical or similar goods. It is also held in the impugned order that the goods already exported were not available for such comparison in view of quality of leather and various embellishments used in the export consignment. This appears to be inacceptable in terms of Customs Export Valuation Rule. 15. It is also evident from the record that the letter to CLRI was written by ADG, DRI suggesting the possible price of export consignment and he also adjudicated the case as the Commissioner of Customs on the basis of the report from CLRI which has earlier been influenced by him. In such a circumstance the impugned order cannot be said to be fair and impartial and in compliance with the Principle of Natural Justice and therefore liable to be set aside on this ground alone. We also find that the Learned Adjudicating Authority has not followed the Customs Valuation Rules, 2007, which is reproduced as under : "Customs Valuation (Determination of Value of Export Goods) Rules, 2007 [Notification No. 95/2007-Cus. (N.T.), dated 13-9-2007] 1. Short title, commencemen....
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....2) The transaction value shall be accepted even where the buyer and seller are related, provided that the relationship has not influenced the price. (3) If the value cannot be determined under the provisions of sub-rule (1) and sub-rule (2), the value shall be determined by proceeding sequentially through Rules 4 to 6. 4. Determination of export value by comparison. - (1) The value of the export goods shall be based on the transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation or in its absence another destination country of importation adjusted in accordance with the provisions of sub-rule (2). (2) In determining the value of export goods under sub-rule (1), the proper officer shall make such adjustments as appear to him reasonable, taking into consideration the relevant factors, including - (i) difference in the dates of exportation, (ii) difference in commercial lev....
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.... it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 6. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth or accuracy of the declared value after the said enquiry in consultation with the exporter. (iii) The proper officer shall have the powers to raise doubts on the declared value based on certain reasons which may include - (a) the significant variation in value at which goods of like kind and quality exported at or about the same time in comparable quantities in a comparable commercial transaction were assessed. (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the misdeclaration of goods in parameters such as description, quality, quantity, year of manufacture or produc....
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....t that the PMV is also correctly fixed and is within the permissible limits i.e. 150% of AR4 value. The market value is fixed at Rs. 52.50. That has also been found to be in order by the Tribunal. Therefore, we accept the finding of the Tribunal in this behalf and reject the contention of the Learned Counsel for the Revenue". We have already held that the report of CSRI-CLRI is not the fair price of the goods as CLRI is not competent agency to decide present market value of export consignment. In holding so we place reliance on the decision of Hon'ble Supreme Court in case of Commissioner of Customs, New Customs House, Mumbai v. Vishal Exports Overseas Ltd., [2007 (209) E.L.T. 331 (S.C.)], the paragraphs 9, 10 and 11 of which are relevant is as follows : "9. The first contention of the appellant herein to the effect that the FOB value being 450% more than the purchase value is unreasonable and cannot be accepted for the simple reason that there is no evidence on record to support such a contention. The Tribunal has also specifically held so and returned a final finding of fact that the FOB price was correctly shown by the assessee. Learned Counsel for the appellant....