TaxTMI 
TaxTMI 
2025 (4) TMI 462
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....s.22,21,267/- was imposed on both the Appellants under Section 114 of Customs Act, 1962 The Act and penalty of Rs.22,21,267/- was also imposed under Section 114AA of the Act on both the Appellants. 2. Briefly stated, the facts of the case are that the Appellant No.1 is engaged in export of readymade garments which were either procured from the open market or got manufactured by them on job work basis. The Appellant filed 35 shipping bills for export of readymade garments at ICD Pantnagar on 08.03.2017 & 09.03.2017 through M/s Surya Jyoti Global Logistics, (CHA), Appellant No.2. Against said 35 shipping bills, 3,25,051 pcs of readymade garments viz. cotton and polyester man's jeans, man's T-shirt, ladies long dress, ladies top, knitted pcs. Assembled baby, men's pajama, ladies lagging, boy's T-shirt, men's trunk, ladies scarf etc. of FOB value Rs.19,93,30,002/- were to be exported under claim of drawback amounting to Rs.1,84,34,085/-. On the basis of an intelligence that the Appellant No.1 was availing inadmissible drawback by way of over invoicing his export goods, a team of DRI officers from Noida Regional Unit visited ICD Pantnagar on 16.03.2017 and it was found that the goods....
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....or confiscation under section 113 of the Act. The Appellant requested to release the goods on provisional basis and submitted that he would not claim any drawback on the said goods and all drawback shipping bills may be converted into free shipping bills. The goods were provisionally released and export was allowed thereafter. On the basis of above investigations, a Show Cause Notice SCN was issued for confiscation of goods on the allegations that goods were overvalued with intention to avail inadmissible drawback. The value was re-determined in accordance with provisions of Rule 5 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 CVR, 2007. The re- determined value was said to be Rs.4,44,25,235/- in place of Rs.19,93,30,002/- as declared by the Appellant. Penalty under section 114 and 114AA of the Act was also proposed. The SCN was adjudicated vide the impugned order and goods were confiscated with option to redeem and redemption fine, penalties were also imposed. Being aggrieved with the impugned order, the Appellants filed the instant appeals. 3. Learned Counsels pleaded the case on behalf of the Appellants and contended that the impugned order was....
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....eferred to the decision of the Tribunal in the case of BARD Export [2018 (363) E.L.T. 103 (T)] wherein it has been held that market enquiry is not a substantial evidence to prove overvaluation if it was carried out in respect of comparable goods. In the present case, he contended that the Department had not produced any evidence to show that value of comparable goods was taken into consideration but the Department had taken the opinion of a couple of manufacturers of garments on costing basis and arrived at a baseless conclusion regarding the market value of the goods in question. Learned Counsel further submitted and vehemently raised the point that subsequent to export of said goods, the remittances received was equal to FOB value of goods. He, therefore, argued that there was no artificial fixation of price of goods to avail bogus drawback, the overvaluation allegation thus could not be substantiated. In this regard, he placed reliance on the decision of the Tribunal in the following cases:- (i) Essar Automotive Pvt Ltd [2018-TIOL-3071-CES-ALL], (ii) Pawan Kumar Singh [2017-TIOL-389-CESTAT-ALL], (iii) Tex-Age [2016-TIOL-188-SC-CUS] (iv) Naz....
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....der cover of 35 shipping bills from ICD Pantnagar. The evidences collected by the Department are only value of goods determined on the basis of costing and non existence of few suppliers. It is interesting to note that market enquiry carried out by the Officers of ICD Pantnagar shows entirely different result from the report of DRI Officers in respect of value of export goods. As per report of ICD Customs Pantnagar, the value of goods exported was at par or at higher side than FOB value of the respective goods. The outcome of the enquiry was very much in the knowledge of the DRI but it was deliberately ignored. DRI Officers got the enquiry conducted, not from the market but by way of costing given by a couple of manufacturers of garments and applied Rule 5 of the CVR to determine value of export goods. It is well established fact that market price of a product does not depend on the value arrived by way of costing. Many times market price is substantially higher than the costing value. It is observed that the Department has issued instruction on the method of costing vide Standing Order No.41/2007 dated 10.10.2007 issued by Jawahar Lal Nehru Customs House, Nhava Sheva where in para....