2008 (5) TMI 65 - AT - Customs

Drawback claimed falsely by giving wrong description of goods - description of the goods in the drawback shipping bills filed by the party was heat resistant rubber tape. whereas the description in the drawback schedule was Heat Resistant Rubber Tension Tape (strip rubber elastic) commissioner is justified in concluding that goods are liable to confiscation such falsely claimed drawback can be recovered without any time limit

Summary

Issues:
Mis-declaration in shipping bills, eligibility for drawback, penalty imposition, existence of supporting manufacturer.

Analysis:
The case involved M/s. Dadri Inorganics Pvt. Ltd. (DIPL) filing shipping bills for export of 'Heat Resistant Rubber Tape', leading to an investigation by the Revenue. The Commissioner of Customs found discrepancies in the goods' description, involvement of a supporting manufacturer, and mis-declaration issues. The Commissioner concluded that the goods exported did not match the description for drawback claims, leading to confiscation of goods and penalties imposed on DIPL and individuals involved.

The main issue revolved around mis-declaration in shipping bills, eligibility for drawback, penalty imposition, and the existence of the supporting manufacturer. The Chemical Examiner's report highlighted the physical properties of the product, but the Commissioner noted distinct characteristics between 'heat resistant rubber tape' and 'heat resistant rubber tension tape'. Lack of technical evidence supporting the contention further weakened the appellants' case.

Regarding the supporting manufacturer, conflicting statements and inconsistencies were observed between the statements of the Director of RALCO, Shri C.P. Gupta. The Commissioner's findings indicated that RALCO did not have the necessary machinery to manufacture the goods, casting doubts on the authenticity of the export claims. The preponderance of probability suggested that the items were purchased and supplied rather than manufactured.

The Commissioner's decision to confiscate the goods and recover the wrongly disbursed drawback was upheld. The penalty imposition on DIPL, Shri V.M. Jain, and Shri C.P. Gupta was reduced, considering the organized effort to falsely claim drawbacks. The appeals were rejected due to the discrepancies in the goods' description, failure to prove equivalence between different types of rubber tapes, and the lack of evidence supporting the existence of RALCO's manufacturing facility.

In conclusion, the judgment highlighted the importance of accurate description in shipping documents, the eligibility criteria for drawback claims, and the consequences of mis-declaration and fraudulent practices in export transactions.