TaxTMI 
TaxTMI 
2024 (1) TMI 1123
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....18 and balance 9 C/Bs, all dated 22.10.2018 claiming total drawback for Rs. 11,71,805/-, refund of Integrated Goods and Service Tax (IGST) of Rs. 42,32,438/- and Refund of State Levies (ROSL) of Rs. 6,91,458/- being taxes/duties suffered on the export products. The goods covered by the shipping bills were duly assessed and cleared for export by Customs following the due procedure. The drawback, IGST refund and ROSL amounts as indicated above have been paid to the appellants after grant of "Let Export Order" and shipment of the goods for export. 2.2 Subsequent to the clearance of the goods for exports, on the basis of certain intelligence that the exporter have mis-declared the description of the goods and over valued the exports in order to avail of inadmissible higher amount of drawback, refund of IGST, ROSL, the Commissioner (General), JNCH, Nhava Sheva had directed the custodian CFS-JWR, Panvel to put on hold the goods exported by the appellants vide his letter dated 25.10.2018. However, it was reported by the Custodian that the goods have already been gated out from Container Freight Station (CFS) and were found to have been already shipped on board to Lagos by Maersk Line I....
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....entions of both the parties open, we dispose of the petition as above with liberty to the Petitioner to file an appeal. 5. At this stage, the learned Senior Advocate appearing for the Respondents states that in case the appeal is filed within a period of two weeks, the Respondents will not raise an objection regarding limitation. The Tribunal will take note of this stand of the Respondents." 2.6 As per the order of the Hon'ble Bombay High Court, appellants had preferred an appeal before the Tribunal within two weeks' time. Taking the note of Hon'ble High Court's Order, the said appeal was admitted and held maintainable by the Tribunal vide its Order No. I/07/2020 dated 27.10.2020. Subsequently, after hearing both the parties, this Tribunal had passed the Final Order No. A/85190/2021 dated 29.01.2021 in the first round of litigation. The extract of the relevant paragraphs of the above order is given below: "4.5 The goods were examined by the departmental officers and the samples drawn on 10.04.2019, as stated by the appellants in their communication dated 12.04.2019, and not disputed by the revenue. In para 2 of their letter dated 04.01.2021, revenue st....
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.... the counsel for appellant. 4.13 In respect of detention and demurrage charges in their letter dated 18.10.2021, revenue has stated as under: "3. In regards to detention waiver, it is to that this office will follow Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 which states that- The Customs Cargo Service provider shall - Subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer as the case may be:" Taking the note of the above submission made by the revenue before us and admitting that these goods have been detained by them, we are of the opinion that these charges should be waived and proper certificate in this regards be issued by the concerned authorities. 5.1 In view of the discussions as above, the appeal is disposed of as per our observations in para 4.11, 4.12 & 4.13, supra." 2.7 In pursuance to the above order of the Tribunal dated 29.01.2021, the Additional Commissioner of Customs, JNCH, Nhav....
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....y report relied upon to redetermine the assessable value is vague and does not contain the specifics of the products such as design, size, fabric construction, fabric weight etc. Hence determination of comparable prices without considering these factors is not a fair comparison and not supported by law. The domestic value of goods cannot be used to redetermine the FOB value of the export goods. In support thereof they relied upon the decision of the Tribunal in the case of J.S. Designers Limited Vs. Commissioner of Customs, ICD Dadri (Noida) 2018 (364) E.L.T. 628 (Tri.-All.). 3.3. It is also reiterated by the learned Advocate that the customs authorities have been time and again made aware of the fact that the appellants have already realized the amounts indicated in the shipping bills in respect of exports from its purchasers abroad through banking channels and the consignee was awaiting for export goods. However, despite production of evidence in the form of e-BRCs for the receipt of payments in convertible foreign exchange as per the FOB value of goods indicated in the invoices and shipping bills, these goods have been detained/seized on the ground of over valuation of goods ....
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....or the appellants as well as Authorised Representative for the Revenue. 6. From the factual matrix of the case, it is found that the issue involved in the present case is on the aspect of valuation of export goods, and for determination of the fact whether it amounted to over valuation or not; and the proper determination of consequential benefits available to the exporter upon exportation of such goods; and deciding on the basis of the facts of the case, as to whether the export goods are liable for confiscation and whether the appellants are liable for imposition of penalties under the Customs Act, 1962. In this regard, we also find that the original authority, on the basis of Final Order No. A/85190/2021 dated 29.01.2021 passed by this Tribunal in an earlier appeal in the very same case, have adjudicated the case by listing out the issues for determination. The relevant paragraph of the Order-in- Original dated 27.02.2021 is extracted below for ease of reference: "25. I find that the following issues in the instant case:- i) Whether the description of goods and value thereof declared by the exporter in the S/Bill are correct or otherwise; ii) Whethe....
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....icer still has reasonable doubt about the truth or accuracy of the value so declared, the transaction value shall be deemed to have not been determined in accordance with sub-rule (1) of rule 3. 2) At the request of an exporter, the proper officer shall intimate the exporter in writing the ground for doubting the truth or accuracy of the value declared in relation to the export goods by such exporter and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation. - (1) For the removal of doubts, it is hereby declared that- (i) This rule by itself does not provide a method for determination of value, 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 inquiry in consultation with the exporter . (....
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....xportation. Rule 5. Computed value method. - If the value cannot be determined under rule 4, it shall be based on a computed value, which shall include the following:- (a) cost of production, manufacture or processing of export goods; (b) charges, if any, for the design or brand; (c) an amount towards profit. Rule 6. Residual method. - (1) Subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods. Rule 7. Declaration by the exporter. - The exporter shall furnish a declaration relating to the value of export goods in the manner specified in this behalf." 8.1. From the records of the case, we find that the appellants have declared the FOB value of export goods as given in their commercial invoices, which is the transaction value. Further, submitting the declaration form in terms of Rule 7 ....
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.... that they had received the entire FOB value of export proceeds in the form of foreign exchange remittances though the banking channel and submitted the e-BRCs, the original authority in disregard to this factual evidence had simply concluded that the exporter had not produced any documentary evidence in the form of purchase order or contract with overseas buyer; the exporter had admitted in his written submission dated 24.02.2021 that they had received only part payment for six S/Bs so far; and the goods were mis-declared for size and composition. Thus, he concluded that no comparative exports could be relied upon for redetermining the value and hence it cannot be determined under Rule 4 and Rule 5 ibid. However, he relied upon the market survey report of the officers of CIU & SIIB of Customs conducted on 17.05.2009, as it has been conducted in the presence of power of attorney holder of exporter and these were market value of the goods of like kind and quality. Further, the impugned order also reiterated the grounds relied upon by the original authority for adjudging the confirmed demands and for upholding the re- determination of export value, as the investigation officers have ....
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....50 80119.50 9 8397442/22.10.2018 5732277.63 INDB0000000000971797 Dated 05.03.2019 02.03.2019 78957.00 78957.00 10 8397410/22.10.2018 5790169.44 INDB0000000000930657 Dated 22.01.2019 21.01.2019 79754.40 79754.40 11 8397426/22.10.2018 5889180.73 INDB0000000001263435 Dated 11.07.2020 08.07.2020 81118.20 81118.19 Total 64003586.70 * Less Commission charges as applicable. 8.2. From the above factual details of the amount of foreign exchange realized in respect of 11 S/Bs, duly authenticated in the DGFT e-BRC portal, we find that entire amount of export goods in foreign exchange as declared in the respective shipping bills have been realized by exporter-appellants. The above table indicates that in respect of 9 S/Bs at Sl. No. 3 to 11 above the full FOB value have been realised, and in respect of 2 S/Bs i.e., Sl. No. 1 & 2 above, whole of FOB value less commission charges have been realized. In the said e-BRCs, a note on the realised value has been given stating that the realized value in foreign currency may not include commission. It is also seen that in the a....
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.... reproduced below: 8.4. In view of the above factual details on the issue of valuation of export goods, we are of the considered view that both the original authority and the learned Commissioner of Customs (Appeals) have not considered the factual details about realization of export proceeds in full as declared in the shipping bills, and on the basis of incomplete details in the 'market survey report', without following the rules sequentially as provided under the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 have adopted the indicative prices for the purpose of arriving at the assessable value under Section 14 ibid. 8.5. It is not the case of Revenue that there existed any parallel invoices which are of incriminating evidence to prove that the subject export goods have been over-valued in this case. Neither was there any data base in ECDB for comparison of transaction value of goods of like kind and quality of those goods that were exported, at or about the same time, to other buyers in the same destination country of importation, nor the value as computed on the basis of cost of production, manufacture or processing of export goods, have been attem....
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.... deemed to be 'related' have been specified in Rule 2(2) of the said Valuation Rules, and this provision has been adopted from the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 4. Thus transaction value is the primary basis for valuation of export goods and the method specified under Rule 3 will be applicable in the vast majority of cases of export by acceptance of declared value. In cases where the transaction value is not accepted, the valuation of the export goods shall be done by application of Rules 4 to 6 sequentially. 5. Acceptance of transaction value is, however, subject to the provision of Rule 8 which provides for rejection of declared value for the export goods in certain exceptional cases. These are situations where the assessing officer has reasons to doubt the truth or accuracy of the declared value and further enquiry or investigation is needed to determine the appropriate value. It is hereby instructed that when an investigation / enquiry is undertaken to determine whether or not the Declared Value should be accepted as Transaction Value, the export consignment shall not be ordinarily detained. Wherever there ar....
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....e 5, the proper officer shall give due consideration to the cost-certificate issued by a Cost Accountant or Chartered Accountant or Government approved valuer, as produced by the exporter. 10. It is clarified that the main purpose of introducing the Export Valuation Rules is to provide for a sound legal basis for the valuation of export goods. It is also expected to check deliberate overvaluation of export goods and mis- utilization of value based export incentive schemes. At the same time due care has to be taken to facilitate the movement of bonafide export goods which is vital for the country's economic growth. The assessing officers shall, therefore, exercise due caution to avoid unnecessary queries regarding truth or accuracy of the declared export value. The Export Valuation Rules are not intended to bring about any significant change in the existing pattern of valuation of export goods. It is the responsibility of the supervisory officers to monitor regularly the export valuation practices, so as to ensure proper implementation of the said Valuation Rules without hindering the flow of bona fide export goods." We find that in the present case, none of the inst....
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....ll was "Boys 3 PC set"; further, on testing 3 representative samples, the test report given by Textile Committee laboratory vide No. 0253061920-1316 dated 04.06.2019 state that it is a "garment (RMG- Ready Made Garment)" of 'knitted' type containing cotton in 60.2% and the polyester in 39.8%. Similarly the test reports of other 2 samples vide No. 0253061920-1317 dated 04.06.2019 state that it is a "garment (RMG- Ready Made Garment)" of 'knitted' type containing cotton in 79.5% and the polyester in 20.5% and vide No. 0253061920-1318 dated 04.06.2019 state that it is a "garment (RMG-Ready Made Garment)" of 'knitted' type containing cotton in 17.5% and the polyester in 82.5%. We also notice that the drawback schedule specifying the 'drawback rate' and the amount of 'drawback cap per unit' for various commodities would vary and in respect of the impugned goods such rates may be varying depending upon the composition of the product, whether it is made of cotton; or made of blend containing cotton and the man-made fibre; or of man-made fibres; or of silk; are of wool etc. Thus, in our considered view there is no mis-declaration of the description of the goods and these test results are o....
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....ng Drawback Rates, if it varies, then the same have to be applied for determining the eligible amount of drawback on export of goods. Hence, we consider it appropriate to refer the case to the original authority for the limited extent of such determination of eligible amount of drawback arising on account of change in drawback rate alone and not on account of redetermination of the FOB value, as the same is being set aside by this order. As regards the Rewards under MEIS are concerned since these are payable as a percentage (2%, 3% or 5%) of realized FOB value of covered exports, by way of the MEIS duty credit scrip, the redetermination for a lower amount on the basis of market survey value in the impugned order is not sustainable and the same is liable to be set aside. Further, for refund of IGST as per Rule 96 of the CGST Rules 2017, refund is allowed in respect of IGST paid on goods exported out of India, by matching the details in the shipping bill filed by an exporter with the GST Returns data transmitted by GSTN. The matching between the two data sources is done at Invoice level and the IGST refund module has been designed in line with the above rule and has an in built mecha....
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....022 (380) E.L.T. 4 (S.C.), we hold that the present appeals are maintainable before the Tribunal. 13. The impugned order confirming the original authority's decision in confiscation of goods and imposition of penalty on the appellants had concluded on the basis of certain findings, mentioned therein. In order to appreciate the facts, and for ease of reference the extract of relevant paragraphs in the impugned order are given below: "12. ...I find that this was a case of deliberate overvaluation and mis- declaration of the goods. If they were a genuine exporter, they would have ensure abundant precaution to ensure the goods entered for export were in tune with the declarations. On perusal of the Order, it is found that Test Report reveals mis-declaration with respect to sizes and composition. The appellant has filed the shipping bills certifying the truthfulness of the declaration. Examination revealed gross over valuation. Records reveal that the goods were carted and would have been exported but for the timely intervention of the Customs Officers. Accordingly it is proved beyond doubt that the exporter appellant has grossly overvalued their declared FOB consequently at....
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....e original adjudicating authority is fully justified in imposing a personal penalty on the partner other than the penalty on the firm." The above extract of the impugned order, clearly indicates that the grounds for confiscation of goods and imposition of penalty on the appellants is mainly on account of overvaluation of goods and the alleged mis-declaration of the description and value of the export goods. 14.1 As regards the issue of overvaluation, our detailed discussion on the facts and evidences on record, and our views and conclusion arrived therein have been explained in the foregoing paragraphs at 8.1 to 11. It is also on record that the Customs authorities did not seize the goods during its examination and panchnama proceedings conducted on 10.04.1019; however they drew representative samples in order to determine the alleged over-valuation and mis-declaration of export goods. We have already seen that in the earlier round of litigation, the appellants had prayed for provisional release of the export goods covered under detention by the Customs authorities, and they filed an appeal on the ground that the order of provisional release under Section 110A ibid, was too h....
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....ate detention of the seized goods entered for exportation results in delays in fulfillment of export order and at times cancellation of such orders. Detention of goods also adds to congestion in ports besides resulting in payment of demurrage charges to the Custodians. Accordingly, the matter has been re-examined by the Board with the view to ameliorate the aforementioned difficulties faced by exporters and to streamline the procedure of provisional release/exportation of seized goods/ goods under investigation on account of mis-declaration in terms of quantity and value etc. 4. Seizure should be resorted to only when the Customs officers have a reason to believe that the goods in question are liable to confiscation under the Customs Act, 1962 and thereafter the provisions of Section 110A of the Customs Act, 1962 would come into play. However, there may be situations when the goods are to be detained for purpose of tests etc. to confirm the declaration. In such cases the endeavour should be to quickly undertake the necessary action (test/enquiry etc.) and take appropriate legal action thereafter so that the period of detention is kept to the minimum. Thus, the following co....
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....nt of export order, payment of demurrage charges by exporters to the Custodians, reducing the period of detention to the minimum, by streamlining the customs procedure of provisional release/exportation of seized goods/goods under investigation on account of mis-declaration in terms of quantity and value etc. We find that by applying the above instructions to the facts of the present case, it is clear that the export goods which were suspected of mis-declaration and where such declaration is to be confirmed and further enquiry/confirmatory test is required (as it is the case textiles materials), the goods should have been allowed for exportation provisionally, in order to safeguard the interest of the genuine exporters as well as the revenue. The detention of any export goods in excess of 3 days must have been brought to the notice of the Commissioner of Customs/ Chief Commissioner of Customs, to ensure finalization of the case. However, none of these instructions were followed in the present case and the goods were kept under customs detention from 10.04.2019 till an order for provisional release was communicated vide letter dated 13.06.2019; and this continued even during the fir....
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.... A perusal of the judgment of the CESTAT shows that the entire material placed before it has been discussed and on that basis, a finding of fact is arrived at to the extent that the allegations of flow back of the remittances by way of Hawala could not be proved by the Department. It is further recorded by the CESTAT that the invoices etc. which were raised of particular amounts were duly checked by the Department at the time when the exports were being made. However, the entire amount as reflected in the said invoices was received by the respondents. 4. In view of the aforesaid finding of fact and in the absence of any evidence to show that the money was remitted by way of Hawala, we are of the opinion that the case of over-invoicing has not been established by the Department. We do not find any infirmity in the order of the CESTAT. The finding recorded is a pure question of fact and no question of law arises for consideration. 5. The appeals are, accordingly, dismissed." We further find that the case law cited by the learned AR in Om Prakash Bhatia (supra) is not applicable to the present case, inasmuch as the fact of the case before us is fundamentally diffe....