TaxTMI 
TaxTMI 
2026 (6) TMI 1242
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....Conductors" and "Cross Linking Agent" during the period 24.12.2010 to 14.01.2011 under Duty Entitlement Passbook [DEPB] Scheme of the Directorate General of Foreign Trade [DGFT] and obtained DEPB scrips in respect of those exports. Jiji Industries had exported Aluminium Alloy Conductors during the same period and had likewise obtained DEPB scrips. 3. DEPB is an Export Incentive Scheme of the DGFT under which the exporter will be entitled to receive scrips as a percentage of the value of the exported goods as per a schedule. The scrips so issued by DGFT can be used to pay duty on any imported goods. It is different from drawback inasmuch as instead of receiving cash as drawback, the exporter receives scrips which can be used to pay import duty or can be transferred to others who can use it to pay import duty on their imports. The DEPB scrips are issued as a percentage on the Free on Board [FOB] value of the exported goods. The Directorate General of Revenue Intelligence [DRI] and DGCEI initiated investigation into the DEPB scrips issued to Mungad and Jiji and the Shipping Bills based on which they were issued. Based on their investigation and statements of several persons recorde....
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....ation nor covered under bond, hence I do not impose any redemption fine under section 125 of the Customs Act 1962 on these exported goods. (iv) I deny the DEPB claim of Rs. 1,77,24,452/- & Rs. 1,85,75,091/- of KPPL in terms of para 4.3.1 of the Foreign Trade Policy read with Public Notice 102 (RE-2008)/2004-09 dated 05.11.2008 issued by the Director General of Foreign Trade. (v) I order for recovery of the Customs duty not paid, to the extent of DEPB credit used i.e. Customs (Import) duty amounting to Rs. 14,24,084/- from the importer i.e. KPPL by invoking the extended period of limitation of 5 years as per proviso to sub-section (1) of Section 28 of the Customs Act, 1962, as it existed prior to 08.04.2011 and under Section 28 (4). (vi) I also impose penalty of Rs. 60 crore (Sixty Crore) under Section 114AA of the Customs Act 1962 on KPPL for the willful acts of omission and commission and the role played by them in the subject matter of export of the goods totally valued at Rs. 45,38,68,595/- (vii) I also impose a penalty of Rs. 14,24,084/- on KPPL plus amount equivalent to interest payable on such confirmed amount of duty mentioned at (v) of th....
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....crore (Fifty Crore) under Section 114AA of the Customs Act 1962 on MSAPL for the willful acts of omission and commission and the role played by them in the subject matter of export of the goods totally valued at Rs. 36,71,13,934/- (vii) I also impose a penalty of Rs. 1,24,362/- on MSAPL plus amount equivalent to interest payable on such confirmed amount of duty mentioned at (v) of the order till the date of payment of such duty under section 114A of the Customs Act, 1962, for the willful acts of omission and commission and the role played by them in the subject matter of import of the goods which are liable for confiscation. (viii) I order for demand and recovery of interest from MSAPL as applicable under the provisions of Section 28AA of the Customs Act, 1962 as existed during the relevant period calculated for the period beginning from the date of utilization of the instrument till the date of recovery of such duty". Submissions of the appellant 4. Learned counsel for the appellant assailed the impugned order and submitted as follows :- (i) The appellant had obtained relevant Foreign Exchange realization certificates of the sale proceeds and there....
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....y conductor and could only be called aluminium bus whose market price was much lower. (3) Both the appellants herein had exported consignments declaring value range in from 700 per kg. to Rs. 2,000/- per kg and had filed shipping bills during the relevant period whereas the goods were found to be a value of Rs. 180/- per kg only. (4) Accordingly, the appellants had obtained ineligible DEPB scrips through this mis-declaration. These facts were brought to the notice of DGFT, under section 11 (2) of the Foreign Trade (Development and Regulation) Act, 1992 who imposed penalty of Rs. 11.19 crores on Jiji and Rs. 7.16 crores on Mungad by order dated 31.05.2012. (5) Shri Gaurav Mungad, the Director was the key person in the entire fraud. Findings :- 6. We have considered the submissions by both sides and perused the records. 7. The only points that we need to decide in these appeals are whether the Commissioner had, in the impugned order correctly : (a) Rejected the transaction value of exported goods and re-determined their value under Rule 8 of the Valuation Rules ; (b) Changed the description of the goods in the shipping bills which....
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....cument or furnish such information. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment * and in cases other than those where * done by the importer or exporter * the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. (6) * * * Explanation. - For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under section 46 or an exporter has entered any export goods under section 50 before the date on which the Finance Bill, 2011 receives the assent of the President, such imported goods or export goods shall continue to be governed by the provisions of section ....
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....h rate, not below five per cent. and not exceeding thirty-six per cent. per annum, as may be fixed by the Central Government, by notification in the Official Gazette". 9. The question which arises is whether the assessment can be modified after the goods have already been exported. Every assessment is an order passed by the proper officer assessing the shipping bill or bill of entry. The process of assessment in respect of imported goods is completed once the proper officer clears the goods for home consumption. In respect of export goods, the process of assessment is completed the moment the proper officer issues an order allowing the goods to be exported. Once the goods are exported they cease to be export goods and, therefore, there cannot be any further assessment of the shipping bill. 10. However, the assessment of the Bill of Entry or shipping bills can be modified through one of the methods available under the law. These are : (i) An appeal to the Commissioner (Appeals) under section 128 of the Act ; (ii) The notice under section 28 of the Act ; (iii) Finalizing of the provisional assessment under section 18 of the Act ; (iv) Amendme....
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....s officer under the Customs Valuation Rules. Admittedly, as per the scheme, DEPB scrips were issued by the DGFT as a percentage of the FOB value. FOB value is not defined in the Customs Act. However, it is understood to be a Free on Board value i.e., the price at which the exporter exported the goods to the importer on the condition that the exporter's responsibility ends when the goods are put on board the vessel or aircraft. All costs and risks thereafter are on the buyer's account. FOB value is one of the INCOTERMS i.e., the international commercial terms. Other INCOTERMS include C&F in which the cost of the transport also should be borne by the exporter and CIF in which both the costs of the transport and transit insurance must be borne by the exporter. In addition to FOB, C&F and CIF there are also other INCOTERMS. In short, FOB value is the transaction value agreed to between the exporter and the overseas buyer. No stranger to the contract can alter this. 14. The question is what is the scope of rejection of transaction and re-determination of value under the Valuation Rules. If the transaction value is rejected, all the proper officer does is to refuse to accept the trans....