2005 (8) TMI 595 - AT - Customs

Summary

Issues:
Allegations of claiming ineligible Drawback on consignment of Garments by declaring inflated valuations based on AEPC opinion.

Analysis:
The judgment revolves around the issue of claiming ineligible Drawback on a consignment of Garments by allegedly declaring inflated valuations based on the opinion of the Apparel Export Promotion Council (AEPC). The Show Cause Notice was issued based on these allegations. The Commissioner concluded that the FOB price declared for valuation of the garments on the shipping bill for export could not be compared with the prices indicated by AEPC. The Commissioner found that AEPC is not competent to value and determine the FOB value of the goods, and their recommendations only indicate the present market value (PMV) of the goods. Since foreign exchange had been realized and shipments were made against a letter of credit in favor of the exporter, the charges in the Show Cause Notice were not upheld. No penalty was imposed, and it was directed that the drawback claim be sanctioned based on the declared FOB value.

During the proceedings, the Respondents were absent, and the Revenue's grounds for appeal were considered. It was noted that the rejection of the AEPC's value as the FOB export value of the goods did not seem legally unsound. Valuation is the responsibility of the proper officer, and AEPC's opinions are merely advisory. The Commissioner acknowledged that importers provided costing data justifying the declared FOB prices, which was not disputed. The Commissioner deemed the AEPC data indicative of PMV, and it was found that PMV according to AEPC was higher than the drawback claim. Therefore, the direction to grant the drawback claim was upheld, and no flaws were found in this decision.

In conclusion, the Tribunal rejected the appeal, stating that there were no merits in the grounds taken by the appellant. The judgment emphasizes the importance of proper valuation procedures, the advisory nature of AEPC opinions, and the significance of justifying declared prices with costing data. The decision ultimately supported the direction to grant the drawback claim based on the declared FOB value.