AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1587
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....ed they were seized on 11-01-2009 under Section 110 of Customs Act, 1962 and released provisionally and allowed export to Bangladesh on execution of Bond covered by Bank Guarantee by the exporter. 2.2 Market enquiry in respect of the goods, attempted to be illegally exported, revealed that the declared value was highly inflated and over invoiced by more than 3 (three) times as the ascertained collective value. 2.3 It was also observed that the Bangladesh government allows shipment only against Letter of Credit, the export consignment against Letter of Credit were only shown/declared to Bangladesh Customs while the consignments against DA basis were not declared to the Bangladesh Customs in order to facilitate the Bangladeshi importer for which they prepared duplicate manifest by fabricating and forging the export documents with the signatures and seals of Custom officers with fake rubber stamps. 2.4 During search conducted at the premises of Custom House Agents, Rubber Stamps, having impression of Inspector of Customs & Superintendent of Customs, Mahadipur Land Customs Station and one N. C. Das were recovered along with incriminating documents. Investigations revealed that....
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....uments produced before Bangladeshi Authority were two completely different set of documents with particulars like value and quantity of the consignments forged and fabricated to suit two different purposes. 2.10 The documents involving both D.A. as well as Letter of Credit were not being negotiated in the manner as prescribed under the provisions of Para 3 (1) (a) of Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 notified under Notification No. FEMA 14/2000- RB dated 03.05.2000 and therefore the transactions effected relating to such exports cannot be construed as a normal business transaction in terms of prevailing commercial statutes. Consequently, the remittances as received against the Bills of export where mode of payment has been shown as D.A. appears to be an illegal movement of foreign exchange across international borders carried out solely for the purpose of availment of undue post export benefit by the exporter in the exporting country by claiming such inward remittances as sale proceeds of the exported goods. 2.11 Accordingly, the invoices of the concerned export consignments were not genuine and valid commercial documents for the pu....
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....nquiry on 08-04-2009, 14-04-2009 and 20-04-2009 i.e. within three months of the detection of the case, whereas the market verification committee of S&D unit under the Commissioner conducted the fresh enquiry in local market after a lapse of three years from the date of export that too with the representative of the exporter, thereby prejudicing the market verification process itself. (iii) Not associating the noticee/exporter in the market verification conducted by DRI in course of investigation cannot be a ground for rejection of the market enquiry report in as much as law does not speak anything to the effect that the market enquiry should be conducted in presence of the noticee. (iv) Doctrine of natural justice was followed as the Adjudicating Authority allowed the noticee firm to cross examine the proprietors of the said wholesale dealers with whom DRI made the market enquiry. As such, there was no need of further market inquiry as conducted under order of the Adjudicating Authority. (b) In the Order, the Commissioner has observed that the exporter had submitted some purchase documents before the adjudicating authority from which it revealed that rate of pu....
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....hey are presented before Indian Customs for any purpose covered by Indian Customs Act. The fraudulent acts indulged by the exporter along with his accomplices in the instant case though not punishable under the Customs Act per se, it however shows the mensrea of the exporter to indulge in illegal activities. By supplying forged set of export documents to his counterpart in Bangladesh, the exporter had only facilitated acceptance of his grossly over-invoiced export consignments so as to gain undue enrichment by availing undue DEPB benefit. 3.1 We have heard Shri Manish Mohan, Additional Commissioner, Authorized Representative, on behalf of appellanat revenue and Shri Arjit Chakraborty, Advocate for the respondent. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For dropping the charges against made against the respondent Commissioner has in the impugned order has observed as follows: "The charges framed in the show cause notice and specific proposals are based mainly on following grounds: i. Overvaluation of export goods i.e. synthetic fabrics by the exporter in order to avail undue DEPB....
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.... Rs.94.80/Rs.71.00 per meter. The exporter disputed the value of the goods computed by the investigating agency through market verification in SCN and wanted the samples of fabrics sealed in presence of Customs officers to be verified in market in presence of Customs officers and themselves so that they get correct value of goods. Since they were not present physically during market verification done by the investigation, they wanted the verification to be done in their presence. They also submitted that as per CBEC circular 37/99 dated 24.06.99 on DEPB restricting DEPB benefit to 50% of market value of export goods which is not violated in the present case and contested the market value arrived by the DRI. In the present case even if the valuation preferred by DRI is accepted the DEPB benefit is less than 50% of market value. I find that they also wanted to cross-examine the proprietors of whole sale dealers from whom DRI made market verification. As per available records, I find that Sri Suman Chakraborty, Proprietor of M/s. Suman Trading Company and Sri Apporva Murkerjee, Proprietor of M/s. A.M. International was examined by Sri N.K. Chowdhury, advocate of Sri Ashoke Da....
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....07. 3. M/s. Shree Balajee Trading Co., 13A, Madan Mohan Burman Street, Kolkata - 700 007. 4. M/s. Om Trading, 11, Sudder Street, (Gr. Floor), Kolkata - 700 016. 5. M/s. Fashion India, 4, Chowrangee Lane, Kolkata - 700 016. The result of the Joint market verification report is reproduced below in tabular form: S. N o Value (per mtr.) in Rs. M/s. S. S. International M/S. Jain Textile M/s. Shree Balajee Trading Co. M/s. Om Trading M/s. Fashion India Description of Samples Qt y 2011 2009 201 1 200 9 201 1 200 9 201 1 2009 2011 200 9 1 Synthetic fabrics (Phiroza blue colour) 01 pc 80 73 80- 85 70 90 75 82- 85 Running business for last one year 81-84....
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.... propose to deal now. I find from para (3) of the letter File.No.05/07 (24) Con/1&1/08 472 dated 10.08.09 issued by Director General, Directorate of Customs Intelligence and Investigation Govt. of the Republic of Bangladesh made available through overseas enquiry by the Embassy of India, Kathmandu (Nepal) that the importer made "....an ill attempt for evasion of Customs duty by giving untrue declaration & concealing the actual transaction value of the consignments". Accordingly, charge of overvaluation by the Indian Exporter as per untrue declaration & concealing the actual transaction value declaration made by Bangladesh importer before the Bangladesh Customs cannot stand. On the contrary the overseas investigation vindicate that undervaluation was made on Bangladesh side by the Bangladesh importer to evade payment of Customs duty. The charge of confiscation of vehicles under section 115(2) of the Customs Act'1962 used for carrying goods under cover of subject 5 bills of export cannot stand as I have rejected the charge of over valuation of export consignment covered under the bills of export in question. (2) Mode of payment: - In the impugned SCN, i....
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....ladesh shall be against L/C only. What Bangladesh law requires cannot be concern in terms of law as applicable in India. In view of such guidelines of the Reserve Bank of India, which also regulates the flow of foreign exchange into and outside India the contention of the department that the subject exportation cannot be made under DA is unacceptable and as such the Issue No. 2 is answered in negative. (3) Fraudulent acts indulged by the exporter, CHA, clearing agent and their employees to facilitate importers of Bangladesh evade customs duty payment in Bangladesh: I find that entire charge is based on the fact that the noticees including the CHA, agents, and employees conspired to fabricate duplicate sets of documents complete with Indian Customs officers seal &signature. It is also apparent that one set of documents presented before and passed by the Indian Customs was not forged. It is the second set of documents meant to be presented before Bangladesh Customs by importer from Bangladesh side which is forged specifically with a view to show a lower ....." 4.3 From the impugned order it is evident that the Commissioner has determined the value of impugned exp....
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.... done behind the back of the exporter cannot be solely relied for determining the market value of export goods. In case of Chiman Desai [2000 (125) E.L.T. 204 (Cal)] Hon'ble Calcutta High Court has observed as follows: "....Apart from the faulty determination of the question it appears that exhaustive enquiries were made but unfortunately all these enquires were ex parte and without notice to the petitioner and behind his back. It has now been held that these proceedings are quasi-judicial proceedings and therefore enquiries upon the results of which the Customs authorities rely, cannot be made behind the back of the person concerned...." 4.6 Tribunal has in case of Asha Enetrprises [2008 (230) ELT 461 (TChennai) ] held as follows: "8. As regards the finding of misdeclaration of value, we find that the Commissioner had used results of market enquiry for the purpose. However, the details of the enquiry such as the persons contacted, whether they dealt with similar fabrics and the results were not intimated to the appellant. Information gathered at the back of the exporter cannot be used to penalize him in adjudication. In the instant case, confiscation and penal....