2004 (3) TMI 573 - AT - Customs

Summary

Issues:
1. Valuation of goods for export under D.E.E.C. scheme.
2. Confiscation of goods and imposition of penalty under Customs Act.

Valuation of Goods:
The Appellant filed a shipping bill for exporting synthetic footwear under a value-based advance license under the D.E.E.C. scheme, declaring an f.o.b. value of Rs. 51,00,450/-. However, upon examination, it was discovered that 1,195 pairs of footwear were short of the declared quantity, and there was a weight shortage of 540 kilos compared to the declared weight. Investigations revealed that the actual market price of the goods was significantly lower at Rs. 30/- per pair, in contrast to the declared f.o.b. value of Rs. 212.51/- per pair. The exporter admitted the market price but claimed his foreign buyer offered an attractive price, denying over-invoicing. The Commissioner confiscated the goods, although they were already provisionally allowed for export, and imposed a penalty of Rs. 1,00,000/- on the exporting firm's proprietor.

Confiscation and Penalty Imposition:
The main issue considered was whether the goods were overvalued. The exporter's admission of the lower market price compared to the declared value raised concerns about overvaluation. Citing the Supreme Court's decision in a similar case, it was established that over-invoicing or misrepresentation of sale consideration could lead to illegal foreign currency transactions. The burden of proof lay with the exporter to justify the declared value, which they failed to do. Furthermore, the under-declaration of quantity, with 1,195 pairs found short in the consignment, supported the confiscation of goods under Section 113(d) of the Customs Act and the imposition of penal action under Section 114(i). Following the Supreme Court's precedent, the appeal was rejected, and the Commissioner's order was upheld, affirming the confiscation and penalty.

This detailed analysis of the judgment highlights the issues of valuation of goods for export and the subsequent confiscation and penalty under the Customs Act, emphasizing the importance of accurate declaration and compliance with regulations in international trade transactions.