2006 (9) TMI 404 - AT - Customs

Summary

Issues:
- Challenge to the confiscation of goods and penalties imposed under Customs Act
- Allegation of violation of principles of natural justice
- Discrepancy in declared value of exported goods
- Applicability of judicial decisions on valuation of exported goods
- Reliance on market survey reports for valuation

Analysis:

The appeal was filed against an Order-in-Original passed by the Commissioner of Customs, Cochin, regarding the export of knitted T-shirts with a disputed declared FOB value. The appellant claimed DEPB credit, but the department found discrepancies in the declared value, leading to a Show Cause Notice proposing confiscation and penalties under the Customs Act. The Commissioner upheld the confiscation and penalties, prompting a challenge by the appellants.

The advocate for the appellants raised several points, including objections to the reliance on a report by CIU Coimbatore, alleging a violation of natural justice, and disputing the confiscation of goods not available for confiscation. The advocate also argued against the invocation of specific sections of the Customs Act and emphasized the lack of detailed market enquiry provided to the appellants.

The Department's investigations revealed discrepancies in the declared value of the exported goods. Representative samples were tested, and further inquiries exposed inconsistencies in the costing sheets and invoices submitted by the exporter. The CIU and Textiles Committee findings contradicted the exporter's claims, leading to the conclusion that the declared value was inflated.

In light of the investigations and legal precedents, the Tribunal found that the appellant had not accurately stated the export value to obtain higher DEPB credit. Citing the Supreme Court's decision in Om Prakash Bhatia's case, the Tribunal upheld the Commissioner's decision to confiscate the goods and impose penalties. The declared value discrepancies and misleading information provided by the appellants justified the confiscation and penalties under the Customs Act.

Ultimately, the Tribunal dismissed the appeal, affirming the confiscation of the goods and the imposition of penalties. The decision was based on the findings of the investigations, the legal principles governing export valuation, and the lack of compliance with regulatory requirements in declaring the export value accurately.