TaxTMI 
TaxTMI 
TaxTMI 
2006 (10) TMI 148
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....Reemj Al Maha Trading Est., Dubai, UAE. 2. It was allegedly found that cheap garments were being exported by grossly misdeclaring the description and heavily over-invoicing the value under the said Scheme by the aforementioned two firms. The goods were intercepted at Chennai. Upon examination, it was found that all the goods were ladies nightwear shaped garments and were found to be small, uneven and unshaped which could not be worn by any person of any age including children. The goods were purchased from Bombay and sent to Hyderabad to be loaded in a vessel at Chennai for export to Dubai. They were seized. 3. A show cause notice was issued on 18-7-2001 directing Respondents to show as to why: "(i) the goods sought to be exported in the name of M/s. Ganesh Yarntex Exports (P) Ltd. and M/s. Aadee Exports (P) Limited and M/s. Aadee Exports & Imports vide shipping bill nos. 136 to 146 all dated 6-1-2001 through ICD Hyderbad with a declared FOB value of Rs. 2.72 crores should not be denied to be exported under DEPB Scheme and the DEPB credit totally amounting to Rs. 41,06,700/- should not be denied; (ii) The declared value of US $ 6.40 per piece....
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....due benefit of DEPB Credit Facility fraudulently were said to be based on physical examination of goods, statements of suppliers, customs house agents, staff employed by Respondents and Respondents themselves. It was found that Respondents have committed a fraud. 6. He, therefore, directed confiscation of the goods in terms of Section 113 of the Customs Act. An appeal thereagainst was preferred by Respondents before the Customs, Excise & Service Tax Appellate Tribunal. By reason of the impugned judgment and order dated 17-9-2004, the Tribunal concluded that the goods being not prohibited ones were not liable to be confiscated under the said provision. It was further held that overvaluation had not been established as no expert evidence was led and no cross-examination of the witnesses had been permitted. 7. Mr. K. Swami, learned Counsel appearing on behalf of Appellants, would contend that the Tribunal committed a serious error in relying upon the decision of this Court in Commissioner of Customs (EP), Mumbai v. Prayag Exporters Pvt. Ltd. [2003 (155) E.L.T. 4 (S.C.)], although the matter is squarely covered by another decision of this Court in Om Prakash Bhatia v. Commissioner of....
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.... for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;" 13. The definition of prohibited goods is a broad one. The said provision not only brings within its sweep an import or export of goods which is subject to any prohibition under the said Act; but also any other law for the time being in force. 14. The Tribunal does not appear to have considered the matter from this angle. Power to confiscate, thus, would arise under both the situations. 15. In Prayag Exporters Pvt. Ltd. v. Commissioner of Customs, Mumbai, [2000 (121) E.L.T. 819] the Tribunal proceeded on the basis that clause (d) of Section 113 of the Customs Act would not apply to cases where the export of goods is prohibited. The Tribunal in arriving at the said conclusion referred to two of its earlier decision in Badriprasad Pvt. Ltd. v. CCE [1995 (80) E.L.T. 624] and Shilp Export v. CCE [1996 (83) E.L.T. 302]. 16. This Court in Prayag Exporters (supra), dismissed the appeal of the Commissioner of Customs, stating: "This appeal is filed against the judgment and order dated 18th August, 2000 passed by the Customs, Excise & Gold (Contro....
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....8 of the Foreign Exchange Regulation Act were analyzed and the law was laid down stating: "(a) The exporter has to declare the full export value of the goods (sale consideration for the goods exported). (b) The exporter has to affirm that the full export value of the goods will be received in the prescribed manner. (c) If the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market. (d) The exporter has to declare the true or correct export value of the goods, that is to say, the correct sale consideration of the goods. Criterion under Section 14 of the Act is the price at which such or other goods are ordinarily sold or offered for sale in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale." 19. This Court did not stop there, but also took into consideration the provision of Rule 11 of the Foreign Trade (Development and Regulation) Rules, 1993, holding: "Hence, in cases where the export value is not correctly stated, but ther....
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....mmitted by the respondents they are not only liable to be punished under Section 23 but also under Section 23(A). The Appellate Bench of the Madras High Court negatived that contention. Section 23(A) as it stood at the relevant time provided that - "without prejudice to the provisions of Section 23 or any other provision contained in this Act, the restrictions imposed by .....sub-section (1) of Section 12 ...... shall be deemed to have been imposed under Section 19 of the Sea Customs Act, 1878, and all provisions of that Act shall have effect accordingly, except that Section 183 thereof shall have effect as if for the word 'shall' therein the word 'may' were substituted"" 22. We may, however, notice that Sikri J. in his minority opinion stated: "Coming now to the construction of Section 12(1), it seems to me that what it requires is a declaration of some actual figure which according to the declarant represents "the full export value". Otherwise there is no point in requiring support of such evidence as may be prescribed. Further it is clear that some actual figure has to be mentioned when the exporter declares that he has received the amount representing the ful....
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....ut in apparent compliance with Section 12(1), and deprive this country of foreign exchange. I cannot give an interpretation which will make a mockery of the section. But it is said that other sections of the Exchange Act will take care of such an exporter. He can be prosecuted under Section 23(1-A), read with Section 22. He can be sentenced to imprisonment which may extend to two years. He can also be fined to an unlimited extent. The Foreign Exchange lost can be retrieved by a court acting under Section 23(1-B). This may be true that the exporter is liable as stated above. But what about persons concerned in the illegal export? It is the persons concerned in the export which in most cases enable the exporter to successfully evade the provisions of the Exchange Act. These persons are taken care of only under the Customs Act. If they are covered by Section 167(8), there is no reason to exclude the exporter himself. It is not unusual to make persons liable both to penalties under the Sea Customs Act and the Exchange Act. It is indeed conceded that if no declaration is given under Section 12(1) and the goods are exported, the exporter and the persons concerned in the export would be l....