TaxTMI 
TaxTMI 
2005 (7) TMI 178
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.... verbatim, the same - M/s. Dimple Overseas Ltd., New Delhi (M/s. DOL) has filed 10 shipping bills for the export of Polyethylene Newar/Straps to U.A.E. based firm viz. M/s. International Textiles Company, Ajmhn, U.A.E. under Value based Advance Licenses in January 1993. The quantity mentioned in each of these Shipping Bills was 3 Lakh meters and the declared FOB value was declared as US $ 3 Lakhs calculated @ US $ 1.00 per meter. Thus, the total FOB value of 10 shipping bills was US $ 30 Lakhs or Rs. 8,59,72,000/- (calculated @ US $ 3,4895=Rs 100) During the month of February, 1993 the officers of Directorate of Revenue Intelligence (DRI) suspecting over invoicing of the export consignment intercepted and seized the said consignment. It was also gathered that the export consignment of Newar/Straps was made out of recycled/waste plastic material as per the opinion of the Chemical expert (IIT, Bombay) as against declaration by M/s. DOL that the export goods were made out of HDPE Granules. As per the initial investigations, DRI estimated the value of export consignment to be not more than Rs. 45 lakhs. Shipment of the said export goods was allowed in pursuance of an int....
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....wever, the department's appeal against the first order dated 22-12-1994 of Hon'ble CEGAT holding that Section 14(1) of the Act was not applicable, was heard by the Hon'ble Supreme Court on 31-7-1996. But in view of its earlier orders dated 8-9-1995 and 19-1-1996, the Court dismissed the appeal while observing that issue of application of Section 14(1) to export goods was left open. Keeping in view the observation of Hon'ble Supreme Court and the fact that the exports in the impugned case were to be made towards discharge of export obligation after fulfilment of which the exporter (M/s. DOL) was entitled to duty free imports of the goods, the duty being of the order of about Rs. 7,85,81,250/- it became absolutely essential to arrive at the correct value of the export goods. Therefore, DRI launched fresh investigations into all aspects of the case with particular emphasis on determining the correct and factual value of the export goods. During these investigations, inquiries were made from the Council (Economic), Consulate General of India, Dubai, exporter Shri V.K. Gandhi of M/s. DOL, Shri R.S. Sodhbans, Honorary Secretary, Delhi Chamber of Commerce, New Delhi Off....
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....the Hon'ble CEGAT passed the final order accepting the description of the goods tendered by the exporter. (iii) That the department is justified in invoking Section 14(1) of the Customs Act, 1962 to determine the value of the goods sought to be exported by M/s. DOL, that the value of export goods, irrespective of whether they are dutiable or not, can be determined under Section 14(1) of Customs Act, 1962. (iv) That the allegation of the department that the invoices obtained from Consulate General of India, Dubai were forged by M/s. DOL is highly speculative and not supported by any concrete corroborative evidence. That the importer at Dubai also had an equal justification, if not more, to misdeclare the value of imports at their end. (v) That Shri Kamal Chaddha, the importer had confessed before the Income Tax authorities that his employees had forged the invoices without his knowledge to save the import duty. (vi) That the investigation has not been able to conclusively pinpoint the actual offenders in this case as well as the persons responsible for the forgery. (vii) That the investigation has not been done with regard to actual r....
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....nd also suggestive of manipulation. But he dropped the proceedings on the ground that the degree of evidence produced by the department are not adequate to sustain the case. (b) The adjudicating authority's judgment suffers from grave error is not correctly appreciating very cogent and convincing evidence adduced by the department. 2.(a) FOB value declared at the time of export US $ 30 lakhs and whereas the importer in Dubai declared the value only US $ 3 lakhs for the same goods. In both the cases the values were declared based on the invoices issued by the exporter. The invoices submitted at the time of export were signed by the employee of the company Malkhan Singh. The invoices submitted in Dubai at the time of clearance were signed by Jaskaaran Jain who is also an employee of the exporting company. Both in their statements had confirmed the authenticity of the signatures. (b) Subsequent retraction is merely an after-thought, particularly in view of the fact that they were employees of the exporter and other circumstances of the case. 3(a) In the invoices submitted to Dubai customs, it was found that the signature of R.S. Sodhbans, Honora....
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....on the face value, even though the department has proved the case of over-valuation with adequate evidences, and decided the case in favour of the party. Since the act of forgery is within the special knowledge of Chaddha, it is for him to prove his version. This has not been done so. 7(a) Shri Kamal Chaddha, importer made his statement in air without substantiating the same and this unlike the income tax authorities is accepted by the adjudicating authority without any application of logic. When he stated that the forgery/manipulation was done by his employees and that too without his knowledge, there had been no statements from the employees who were allegedly involved in the forgery. (b) In fact there had been no reason or motivation for the employees to commit an offence which did not benefit them but their employer. There is nothing on record to indicate which employees of the importing firm committed forgery/manipulation of invoices. As against this, the adjudicating authority expected of the Department to make verification from the unnamed employees of Chaddha in Dubai on the basis of the averment which have been made before income tax authorities was not w....
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....isposes appeal filed by department remanding the matter for fresh decision, as reported in 1995 (76) E.L.T. 48. 8-9-1995 Supreme Court set aside the Tribunal remand order 1995 (80) E.L.T. 10 (S.C.) 31-10-1995 Tribunal dismisses appeal filed by department [1995 (80) E.L.T. 900] 19-1-1996 Supreme Court dismisses department appeal against order dated 31-10-1995 [1997 (93) E.L.T. A182 (S.C.). 31-7-1996 Supreme Court rejects certain appeal on us [1996 (86) E.L.T. A67 (S.C.)]. 3-9-1996 Tribunal rejects departments application for rectifications of mistake. Directorate of Revenue Intelligence, who had handled investigation into this case finally directed all concerned departments including DGFT vide letter dated 29-10-1996 that CBEC on reconsideration has decided that all department. should act in accordance with the decision of the Supreme Court dated 31-7-1996 and it appears pursuant to that, as it is on record that Export incentives accruing to M/s. DOL were granted/released. It is also on record that Revenue Secretary vide his affidavit dated 2-1-1997 categorically has averred about consequential relief having been granted to the petitio....
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....icate from issuing the Second Notice. This is because, the fresh proceedings thereby initiated against the Querist clearly related to the earlier proceedings which had become final and concluded by virtue of the orders of the Supreme Court dated 19-1-1996 and 31-7-1996 to effect that the issue of the applicability of Section 14 of the Customs Act to duty free goods was being left open, cannot be understood to mean that the department could initiate, by issuing the second notice despite being aware of the undertaking given by the Revenue Secretary to the Supreme Court, the officers of the Department have aggravated the earlier contempt and are liable to be punished for the same by the Supreme Court". This opinion, on a perusal also records elsewhere :- "Based on the above mentioned factors and the fact that the Second Notice traverses the same ground on the first notice, it follows that the principle of rejudicate would prohibit the prosecution of the Querist for the charges reveal in the second Notice". And also as regards the issue of valuation under Section 14 of the Customs Act, it... "......By prohibiting the passing of any order in the rectification pro....