TaxTMI 
TaxTMI 
2004 (6) TMI 232
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.... of cycle tyre exports with a view to claiming excessive duty entitlement under Duty Entitlement Pass Book Scheme (DEPB). The facts of the case are that the first appellant M/s. Dimension Overseas (P) Ltd., filed Shipping Bill No. 1207422, dated 16-4-2002 for export of cycle tyres at a unit value of US $ Rs. 3.95 tyres (Rs. 192/-). This consignment was intercepted and examined by the Directorate of Revenue Intelligence (DRI) authorities. Investigations showed that the value of the tyre was about Rs. 26/- per piece, while in the export document the appellant had declared an F.O.B. exports price of Rs. 192/-. The same amount was declared as Present Market Value (PMV) also. The export of tyres are eligible for duty entitlement @ 20% of F.O.B. ....
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....owing order :- "ORDER 1. For the reasons aforesaid, I order confiscation of 10,000 pcs. of cycle tyres, of declared value of Rs. 19,17,725 FOB and the actual value of Rs. 3,20,000 in the case relating to Show Cause Notice F. No. 23/51/2002 dated 18-10-2002, under Section 113(d) of the Customs Act, 1962 read with the provisions of the Foreign Trade (Development and Regulation) Act and Rules as cited in the findings, together with Section 11 of the Customs Act, 1962. I allow redemption of the aforesaid goods on payment of a fine of Rs. Three lakh only. I impose a penalty of Rs. One lakh on M/s. Dimension Overseas (P) Ltd., and Rs. 50,000/- on Shri B.N. Kejriwal, Director, under Section 114(i) of the Customs Act, 1962. 2. As regards the c....
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....f the consignments after due verification, including P.M.V. The appellants have also contended that if at all the claim of D.E.P.B. Scheme benefit is excessive, the same can be restricted by the customs authorities to 50% of the market value as ascertained by them. The learned Counsel for the appellant has submitted that the Commissioner was in error in allowing the credit @ 20% on the purchase price of the goods. He has also pointed out that the order was entirely unjustified in demanding "differential amount" from the appellant after deducting Rs. 7,19,660/- from D.E.P.B. credit of Rs. 45,41,898/- claimed by the appellant (Para 58 of the order). The submission of the learned Counsel is that the amount of Rs. 45,41,898/- represented the ap....
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....chase price. Such over statement of P.M.V. can be taken only as intentional, and that too, to overcome the cap placed on D.E.P.B. benefit. The appellant's declaration of export value (F.O.B.) tallies with the declared P.M.V. That value has also to be treated only as a false declaration to avail of excessive D.E.P.B. scheme benefit. That export price is unlikely to be genuine is clear from the very fact that it is several times the Indian purchase price. Such a high export price is not justified by market factors. The Commissioner was therefore, entirely justified in rejecting the export price also. In fact, he has passed his order relying on the following observations of the Apex Court in the case of Om Prakash Bhatia (supra). We may re....
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....an would pay ten times more than the prevailing market price of ready-made clothes, particularly, in the days where information is easily available through internet or various other sources. In any case, when margin of profit appears, on the face of it, unreasonable, it is for the exporter to establish that it was a true export value stated in the shipping bill." 8. In view of what is noted above, there is no justification to interfere with the findings on misdeclaration of value by the Commissioner. The gravity of the offence and considerable financial fraud are also evident. Shri B.N. Kejriwal, Director of the firm has admitted to his personal responsibility and motive for carrying out the misdeclaration. In these circumstances, penaltie....