2010 (4) TMI 946 - AT - Customs

Summary

Issues involved: Stay applications seeking waiver of pre-deposit and stay of recovery of penalties imposed on M/s. Shree Deepak Exports and others for over-invoicing consignments of readymade garments to obtain undue drawback amounts, denial of DEPB claims, imposition of penalties, common allegations against exporting firms managed by Shri Suresh Jhunjhunwala and Shri Deepak Jhunjhunwala, examination of exported goods, violation of natural justice principles.

Summary:

1. M/s. Shree Deepak Exports Case:
- Stay applications filed seeking waiver of pre-deposit and stay of penalties.
- Commissioner re-determined FOB value in shipping bills, demanded undue drawback amount.
- Rejected DEPB claims and denied drawback claims on certain shipping bills.
- Allegations of over-valuation of export goods.
- Penalties imposed on appellants.

2. M/s. Suresh Enterprises Case:
- Applications seeking waiver of pre-deposit and stay of dues adjudged.
- Commissioner denied DEPB claim against export of garments.
- Allegations of over-valuation and mis-declaration of goods.

3. Common Allegations:
- Charges against exporting firms based on statements of co-noticees.
- Allegations of over-valuation of goods by exporting firms.
- Common noticees involved in cases.

4. Facts and Allegations:
- Searches conducted on exporters leading to recovery of incriminating documents.
- Allegations of fraud and obtaining undue duty drawback and DEPB credit.
- Detailed investigation by DRI revealing fraudulent activities.

5. Defence and Legal Arguments:
- Defence counsel argued against rejection of submissions and examination of goods.
- Cited Tribunal and Supreme Court judgments to support defence.
- Requested remand for de novo adjudication following natural justice principles.

6. Revenue's Position:
- Revenue relied on co-noticees' statements to establish fraud by exporters.
- Submission on examination reports not representative of entire goods.
- Cited Supreme Court judgment to support position on pre-deposit.

7. Court's Decision:
- Court considered submissions from both sides.
- Found lack of examination reports provided to exporters.
- Prima facie view of violation of natural justice principles.
- Granted waiver of pre-deposit and stay of recovery during appeals' pendency.

Conclusion:
The Court granted waiver of pre-deposit and stay of recovery of penalties to M/s. Shree Deepak Exports and others due to lack of examination reports, violation of natural justice principles, and prima facie view of unsustainable mis-declaration allegations.