TaxTMI 
TaxTMI 
2025 (11) TMI 693
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.... to Nigeria, and they had availed customs duty drawback benefits in respect of such exports allegedly in an irregular manner by gross over-valuation of export goods. Earlier, Directorate of Revenue Intelligence, Mumbai Zonal Unit (DRI) had received specific intelligence indicating that certain exporters were engaged in bogus exports by preparing manual shipping bills (S/Bs), on which actually no export was effected. Further, the intelligence also revealed that a number of export firms were floated for preparation of bogus bills in the name of several companies for showing fake/fraudulent exports and availing irregular drawback. 2.3 On the above basis, DRI had conducted search operations of various premises of exporters, bogus suppliers and the office premises of the Chartered Accountants firm M/s Karan Ranka & Associates involving one Shri Suhel Parvez Mohammed Sharif Ansari (for short, referred hereafter as 'Suhel Ansari') under Panchnama proceedings. Further, statements were recorded from various persons concerned with such exports during the course of investigation conducted by DRI. In a statement dated 24.08.2015 recorded from Shri Shaik Mohammed Arshad, an employee of Shri ....
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....d that on the basis of invoices, packing list produced by the exporter, shipping bills and other supporting documents were prepared for processing the same; export consignments used to be received directly at the cargo complex, after assessment of the shipping bills by customs authorities, and there was no occasion involving any discrepancy being detected about the actual goods exported vis-à-vis the high-valued goods for which the invoices were alleged to have been prepared by the above modus operandi. Further investigation was also conducted by the Special Intelligence and Investigation Branch-Exports (SIIB-Exports) of Customs Commissionerate at Air Cargo Complex, Mumbai, on the basis of detailed investigation conducted by DRI. 2.7 On completion of detailed investigation, the Customs department had alleged that M/s Rishay International had exported low value goods by over valuation and availed ineligible drawback, in a fraudulent manner, in number of export consignments, which are summarised below: Sl. No. Period of exports involved (LEO dates) No. Of Shipping Bills Total FOB value of exports (in Rs. Lakhs) Total drawback (in Rs. Lakhs) 1 01.01.2012....
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....e their letter dated 08.03.2018 intimating DRI that the goods has been cleared at much lower value than what has been declared to the Indian customs. The investigation was later handed over to the SIIB-Exports, who had on completion of the investigation, have issued the Show Cause Notice (SCN) to the appellant in the present case. He further stated that both in the SCN and in the impugned order, the report of Consulate General of India, Dubai, have been relied upon for confirmation of demands on the appellant-exporter; however, such evidence does not have any relation in respect of exports of goods undertaken by the appellant, which was destined to African countries. Hence, he submitted that the confirmation of demands in their case is not legally sustainable. 3.3 Further, learned advocate also stated that the appellant had submitted proof of realisation of export proceeds, in respect of the exports carried out by them during the disputed period 2012-2014, before the investigation authorities. Therefore, he submitted that the allegation levelled against the appellant for over valuation of export goods and nonrealisation of export proceeds and the consequent denial of drawback be....
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....s chargeable under this Act on any imported materials of a class or description used in the manufacture or processing of such goods or carrying out any operation on such goods, the Central Government may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section (2) : Provided that no drawback shall be allowed under this sub-section in respect of any of the aforesaid goods which the Central Government may, by rules made under sub-section (2), specify, if the export value of such goods or class of goods is less than the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods, or is not more than such percentage of the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods as the Central Government may, by notification in the Official Gazette, specify in this behalf : Provided further that where any drawback has been allowed on any goods under this sub-section and the sale pr....
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....mined under this Act, whichever is the greater. Penalty for use of false and incorrect material. Section 114AA. If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods." Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 "Rule 3. Drawback. - (1) Subject to the provisions of - (a) the Customs Act, 1962 (52 of 1962) and the rules made thereunder, (b) the Central Excises and Salt Act, 1944 (1 of 1944) and the rules made thereunder, (bb) the Finance Act, 1994 (32 of 1994), and the rules made thereunder; and (c) these rules, a drawback may be allowed on the export of goods at such amount, or at such rates, as may be determined by the Central Government: Provided that where any goods are produced or manufactured from imported materials or excisable materials or by using any taxable services as input services, on....
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.... ii. Goods of inferior quality were procured from unknown places without any invoice. iii. Incorrect transactions were made with the fake suppliers, whose invoices were raised by Shri Suhel Ansari. This was done to conceal the actual transactions and give cover to the bogus transactions. iv. This automatically explains the facts there was not physical movement of the goods against the fake invoice raised by Shri Suhel Ansari. v. As export goods were procured from unknown places, which were of inferior quality and having low value, therefore the impugned export M/s Rishay International was grossly overvalued and only done for the purpose of fraudulent claim of drawback. vi. Aforesaid fact of overvaluation supported by various statements as mentioned above and by the enquiry caused by DRI with the Consulate General of Dubai. vii. The entire modus operandi was operated by Shri Suhel Ansari with the collusion of Shri Arshad, Shri Karan Ranka, exporter and Customs Broker. Shri Suhel Ansari was mastermind of the fraud." 9.1 On plain reading of the legal provision under Section 75 of the Customs Act, 1962, it transpires that sub-sectio....
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....nvoices, and low value goods have been actually exported by the appellant-exporter in 577 shipments exported during 2012-2014, are supported by the statements recorded from various persons, who are not directly connected with exports but have facilitated generation of fake/bogus invoices. It is also a fact on record that in respect of 577 shipments exported through ACC, the proper officers of Customs have duly assessed the S/Bs and have allowed the exports goods to be exported out of the country. However, there was no case of any doubt about the value of export goods or mis-declaration about the quality, mismatch of the export goods and the export invoices, packing list identified at the time of export over three years by the Customs authorities. In this background, the evidence in the form of letter dated 08.03.2018 of Consulate General of India, Dubai, UAE reporting the scrutiny of the documents provided by Federal Customs Authority, Dubai, stating that goods had been cleared at Dubai and unit values has been much lower than what has been declared to Indian Customs, are of no relevance as in none of the S/Bs in the present case, the exports were destined to Dubai, UAE and on the ....