2008 (12) TMI 611 - AT - Customs

Summary

Issues Involved:
1. Overvaluation of exported goods.
2. Confiscation of goods under Sections 113(d) and 113(i) of the Customs Act, 1962.
3. Rejection of Duty Drawback claims under Section 76 of the Customs Act, 1962.
4. Imposition of penalties under Sections 114(i) and 114(iii) of the Customs Act, 1962.

Detailed Analysis:

1. Overvaluation of Exported Goods:
The case revolves around the export of 164 packages of readymade garments by M/s. Kanchi Impex Pvt. Ltd., Ahmedabad, through six Drawback shipping bills. The Directorate of Revenue Intelligence (DRI) inspected the consignment and found that the declared FOB value of Rs. 1,26,47,813/- was highly inflated, with the correct value being only Rs. 4,92,000/-. The investigation revealed that the goods were procured from different shops in Ahmedabad at a much lower price and false documents were created to show purchases from non-existent firms.

2. Confiscation of Goods:
The adjudicating authority confiscated the goods under Section 113(d) and 113(i) of the Customs Act, 1962, due to the misdeclaration of value. The goods were seized based on the valuation report, which confirmed that the goods were not valued more than Rs. 10/- per piece, contrary to the declared value.

3. Rejection of Duty Drawback Claims:
The drawback claims amounting to Rs. 20,23,683/- were rejected under Section 76 of the Customs Act, 1962. The adjudicating authority found that the overvaluation was done to fraudulently claim ineligible duty drawbacks.

4. Imposition of Penalties:
Penalties were imposed under Sections 114(i) and 114(iii) of the Customs Act, 1962, on various individuals involved in the export process.

- Shri Sanjay N. Mehta: The appellant contested the penalty, claiming no involvement in the consignment. However, the adjudicating authority found evidence against him, including statements from co-conspirators. The penalty was reduced from Rs. 10 lakhs to Rs. 5 lakhs.

- Shri Alpesh Shah: Similarly, the appellant claimed limited involvement, but the adjudicating authority found substantial evidence of his role in orchestrating the overvaluation. His penalty was also reduced from Rs. 10 lakhs to Rs. 5 lakhs.

- Shri Hemant Parikh: The appellant was found to have a minimal role, limited to liaising and collecting documents. The adjudicating authority noted that there was no direct evidence implicating him, and none of the co-noticees implicated him in their statements. Consequently, the penalty imposed on him was set aside.

Conclusion:
The appeals were disposed of with modifications in the penalties for Shri Sanjay Mehta and Shri Alpesh Shah, reducing their penalties to Rs. 5 lakhs each. The penalty on Shri Hemant Parikh was set aside, and his appeal was allowed. The judgment underscores the importance of accurate valuation in export consignments and the severe repercussions of fraudulent claims under the Duty Drawback Scheme.