2016 (5) TMI 988 - AT - Customs

Valuation - SS Utensils exported under DEPB Scheme - Goods overvalued to claim higher DEPB benefit - Held that - the issue stands covered by the majority decision of the Tribunal in the case of Sitaram Ramdhan & Co. Vs. Commissioner of Central Excise, Jaipur 2015 (4) TMI 1072 - CESTAT NEW DELHI whereas it was observed that when the goods are examined by the Customs and found as per the declaration and when realization of the export proceeds in full is not disputed and when there is no evidence to show flow back from the exporter to the foreign buyer, DEPB benefit has to be extended on the basis of FOB value and not on PMV, Accordingly, by holding that restricting DEPB benefit to PMV is totally wrong, when especially there is no wrong declared in the FOB value. In as much as the said decision covers the issue in full, we by following the same, set aside the impugned order. - Decided in favour of appellant with consequential relief

Summary

Issues: Valuation of goods under DEPB Scheme

Analysis:
The dispute in the present appeal revolves around the valuation of goods exported by the appellant under the Duty Entitlement Passbook (DEPB) Scheme. The appellant, engaged in the manufacture of Stainless Steel Utensils, exported two consignments under the scheme, declaring a total value of &8377; 55,74,498. The Revenue initiated investigations, suspecting over-declaration of value by the appellant to claim higher DEPB benefits. This suspicion led to the issuance of a show cause notice, proposing a reduction in the declared value to &8377; 29,64,990 and imposition of a penalty. The Commissioner's order followed, reducing the value and imposing the penalty, prompting the appellant to file the present appeal.

The Revenue's case was based on investigations from other manufacturers and exporters of utensils, where they found the average selling price to be around &8377; 65.80 per kg. In contrast, the appellant maintained that the goods were manufactured in their factory, examined by the Central Excise officer, and allowed for export after Customs verification. The appellant argued that the Revenue's comparison with other manufacturers was flawed, as there was no evidence to show comparability. The appellant also presented export invoices of the same manufacturers, showing a higher export value, which the Commissioner did not address. Additionally, the appellant relied on a Tribunal decision emphasizing the extension of DEPB benefits based on the FOB value when the declared value is correct and full realization of export proceeds is not disputed.

The Tribunal, after considering the arguments and evidence presented, found that the appellant's goods were examined and verified during export, with no discrepancies noted. Referring to the Tribunal's previous decision, the Tribunal held that DEPB benefits should be extended based on the FOB value when the declared value is accurate and full realization of export proceeds is confirmed. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief.

In conclusion, the Tribunal's decision centered on the correct valuation of goods under the DEPB Scheme, emphasizing the importance of accurate declaration, verification during export, and full realization of export proceeds in determining DEPB benefits. The judgment highlighted the need for proper assessment based on factual evidence and adherence to established legal principles in resolving valuation disputes under export schemes.