2016 (11) TMI 1323 - AT - Customs

Duty drawback - carpet rolls - valuation - whether drawback already disbursed was in excess of their admissibility? - shortage of goods - Held that - the container was not inspected immediately after it was removed from ICD Bhadohi. The counting of the contents of container was carried out much later after eighteen days of container being out of the control of Officers. For counting contents of the goods at the Gate Way Port several times it was reopened resealed & shifted from one container to another. Therefore it cannot be established beyond doubt that the goods stuffed in containers at the time of sealing of container at ICD Bhadohi were less than that declared in the said Shipping Bills. The fact also has emerged that when the goods were actually exported after provisional release Overseas importer received 63 rolls less than that declared in the said three Shipping Bills but the valuation of the goods exported through said three Shipping Bills was not reduced by the importer but the less payment by the Sunshine Overseas importer was on account of short delivery of goods. Therefore the market enquiries conducted in respect of goods which were exported through the said three Shipping Bills is not established to be correct since importer in foreign country has remitted full amount for the quantity received. Further we find that for the valuation of goods which were exported from 02-02-2004 to 24-06-2008 the Show Cause Notice has resorted to Section 14 of Customs Act 1962. Section 14 of Customs Act 1962 empowers valuation of export goods and export goods is defined at Clause 19 of Section 2 of Customs Act 1962 as the goods which are to be taken out of India to a place outside India. It clearly establishes that the goods which are presented for export are export goods and goods which are exported do not satisfy the definition of export goods. Therefore provisions of Section 14 of Customs Act 1962 are not applicable to goods which have already left the shore of Indian Territory and the export of which has already taken place. Therefore we hold that all the allegations and findings in respect of goods which were exported during the period from 02-02-2004 to 24-06-2008 are totally unsustainable. We also find that the penalty under Section 114 of Customs Act 1962 cannot be imposed for dereliction duty on the part of the Officers. We therefore hold that penalty imposed on Shri Pawan Kumar Singh & Shri S.K. Vishwakarma is not sustainable. We therefore hold that it could not be established that at the time of export of goods from ICD Bhadohi the exporter misdeclared the goods and therefore we hold that penalty imposed on exporter and its Partners Mr. Yadavendra Kumar Roy & Mrs. Rita Roy is also not sustainable. Disbursement of drawback - Held that - we remand the case to drawback disbursement Authority with a direction to take into account export of the goods really taken place and total remittance that is received for the quantity of goods exported and allow drawback as per provisions of law. We set aside the remaining part of the Order-in-Original impugned and remand to the drawback disbursement Authority for disbursal of drawback on the goods exported through said Shipping Bill No. 702/703/704/DBK/2008 all dated 07-06-2008 on the basis of actual quantity of export and on the basis of actual foreign exchange realized as per the provisions of law. Appeal allowed by way of remand.

Summary

Issues Involved:

1. Assessment of goods presented for export through Shipping Bills Nos. 702, 703, and 704.
2. Shortage of goods found in the container on 25-06-2008 at Gateway Port.
3. Valuation of goods already exported and recovery of disbursed drawback.
4. Personal penalty imposed on Departmental Officers.

Issue-wise Detailed Analysis:

1. Assessment of Goods Presented for Export:
The appellants, M/s Kaka Carpets, presented three Shipping Bills under a claim for drawback for exporting Indian Hand Knotted Woollen Carpets. The goods were inspected, sealed, and cleared at ICD, Bhadohi, and later inspected at JNPT, Nhava Sheva, where discrepancies were noted. The Revenue alleged misdeclaration in the quantity, description, value, and drawback amount. The Original Authority re-determined the FOB value and disallowed the claimed drawback.

2. Shortage of Goods Found in the Container:
Upon inspection at JNPT, Nhava Sheva, a shortage of 63 rolls was detected. The appellants argued that the container was not inspected immediately after removal from ICD, Bhadohi, and was opened and resealed multiple times, leading to potential discrepancies. The Tribunal found that the shortage could not be conclusively attributed to the appellants due to the delayed and multiple handling of the container.

3. Valuation of Goods Already Exported and Recovery of Disbursed Drawback:
The Revenue revalued the goods exported from 02-02-2004 to 24-06-2008, alleging overvaluation and excess drawback claims. The Tribunal held that Section 14 of the Customs Act, 1962, which pertains to the valuation of export goods, does not apply to goods already exported. Consequently, the allegations and findings regarding the past exports were deemed unsustainable.

4. Personal Penalty Imposed on Departmental Officers:
The Original Authority imposed penalties on certain officers for alleged dereliction of duty. However, the Tribunal found no evidence of pecuniary gain or connivance and held that penalties under Section 114 of the Customs Act, 1962, cannot be imposed for mere dereliction of duty. Therefore, the penalties on the officers were set aside.

Conclusion:
The Tribunal set aside the findings of misdeclaration and penalties imposed on the appellants and the officers. The case was remanded to the drawback disbursement authority to reassess the drawback based on the actual quantity of goods exported and the realized foreign exchange. The appellants were entitled to consequential relief as per the law.