TaxTMI 
TaxTMI 
2026 (2) TMI 974
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....goods were over invoiced with a view to avail ineligible drawback. Based on statements of various persons recorded under section 108 of the Customs Act, 1962 [Act] investigations into the remittances for the exports and the invoices for the same export consignments filed with the Delhi Chamber of Commerce [DCC] to obtain the Country of Origin [COO] certificates, DRI concluded that the exported garments were actually of inferior quality and they were exported by over invoicing to avail ineligible drawback. 3. The Joint Commissioner issued Show Cause Notice dated 21.1.20214 [SCN] to the appellant. Deciding the proposals in their SCN, the Additional Commissioner passed the OIO confiscating the goods exported by 8 shipping bills under section 113 (d) and 113 (i) read with section 50 of the Act. Since the goods had already been exported and were not available, he did not impose any redemption fine. He also ordered recovery of the drawback under Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995 [Drawback Rules] along with interest and imposed penalties on the appellant under section 114 (iii) and 114AA of the Act and imposed penalty on Shri Naveen Kumar Goel under ....
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....tative for the Revenue vehemently supported the impugned order and asserted that it calls for no interference. He submitted as follows: (i) From the statements of Shri Abdul Sattar made on 25.10.2009, statement of Shri Raj Kumar Jain, partner of M/s. Swati Fabrication, suppliers of the garments to the appellant and the statements of Shri Rajesh Kumar, employee of the appellant, it is clear that the appellant had procured cheap, inferior garments and exported them showing inflated values. The garments were procured from Tirupur and Ludhiana, unloaded at National Transport Co., Siraspur and transported to the appellant's godown by M/s. Sangam Transport Service and the documents were destroyed by Shri Rajesh Kumar on the appellant's directions; (ii) As per the statement of Shri Suresh Mudgal of M/s. Sangam Transport, he had transported the goods from the appellant's godown to the ICD and no document was received by him and he was paid in cash; (iii) The DCC provided copies of the invoices submitted to it by the appellant to obtain COO Certificates for the same consignments which showed much lower values. The value of consignments in the export documents was ....
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....appellant for wilful mis-declarations in the Shipping Bills. 10. Twenty two documents were relied upon in the SCN to prove the above. Of these, fifteen are statements recorded by officers under section 108 of the Act which are relevant to prove the contents in them if the adjudicating authority admits them as evidence after following the procedure prescribed under section 138B of the Act. The adjudicating authority did not do so and therefore, these are not relevant to establish the case of the department. 11. Of the remaining seven relied upon documents, one is a panchnama drawn at the residence of the owner of the appellant Shri Vinod Kumar Mulani, one is a copy of the application filed by Shri Mulani before the court of ACMM, Patiala and the order of the court in connection with his arrest, two are letters of the Canara Bank, Uttam Nagar, Delhi, one is a letter of Delhi Chamber of Commerce providing copies of the invoices submitted to it with respect to the exports, one is letter of Assistant Commissioner (Drawback) and one is the letter of the CHA. 12. Of the above seven relied upon documents the one relevant to support the department's case that the exported goods wer....
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.... cases, they were recorded as advances. Therefore, the remittances, according to the department, are not related to the exports. 16. We find that it is for the bank to determine if the remittances received were proper and issue the BRCs and unless the BRCs are cancelled by the bank, they must be accepted. It is for the bank to see if the remittance could have been sent by a third party as per the Regulations and if the remittance was relatable to the exported consignment as per FEMA and RBI Regulations. 17. The next question is whether in proceedings to recover drawback under Rule 16/16A of the Drawback Rules, the value of the goods can be changed. The High Court of Punjab & Haryana decided in Jairath International vs Union of India [2019 (370) E.L.T. 116 (P & H)] that the proceedings to recover drawback under Rules 16/16A of the drawback rules are in the nature of execution proceedings and the value of the export goods cannot be changed in those proceedings. Relevant portion of the judgment is reproduced below: "We on examination of the scheme of the 1962 Act and in view of the judgment of Hon'ble Supreme Court in case of ITC Vs. CCE (Supra) find that Rule 16 of....
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....ported under Rule 16 of Drawback Rules, 1995 nor Valuation Rules, 2007. The goods which stand exported do not fall within ambit of 'export goods' as defined under Section 2(19) of 1962 Act, thus Respondent cannot invoke Rules 6 & 8 of Valuation Rules, 2007. In view of judgment of Hon'ble Supreme Court in the case of ITC v. CCE (supra), we find that shipping bill either self-assessed or assessed by proper officer is amenable to appeal by both sides. Respondent by way of show cause notice under Rule 16 of the Drawback Rules, 1995 cannot modify assessed shipping bill. 18. Therefore, we hold that Respondent in terms of Rule 16 of Drawback Rules, 1995 as well Valuation Rules, 2007 has no power to reassess a shipping bill which was duly assessed by proper officer at the time of export of goods. In the present case, goods in question stood exported thus impugned order is not sustainable in view of our aforestated findings as well. 19. Accordingly, present writ petitions are allowed on all the counts, namely, limitation, absence of mechanism and lack of power to frame re-assessment of goods already exported; and hence the impugned order dated 25-112016 (P-9) is hereby qua....
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....d not have been confiscated. Consequently, penalties under section 114 which are imposable on individuals for acts or omissions which render goods liable to confiscation under section 113 also should also not have been imposed. 22. Penalty under section 114AA is imposable for using false and incorrect material in any business for the purposes of the Act. It is not dependent on any confiscation of goods nor on any confirmation of demand of duty or interest. Section 114A reads as follows: "Section 114AA. Penalty for use of false and incorrect material. - 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." 23. The alleged false declaration and false documents in the case are the invoices submitted along with the Shipping Bills showing values which are about 20 times the values in the invoices for the same consignments submitted to the Delhi Chamber of Commerce to obtain the COO certificates. ....