2017 (4) TMI 482 - AT - Customs

Valuation - attempt to export sub-standard fabric which were claimed to be processed man-made fabric - It was alleged in the SCN that the goods were highly overvalued, that the quantity was mis-declared in the export documents and that the intent had been to claim undue credit under the DEPB scheme - invocation of section 113 (d) of CA, 1962 justified or not? - Held that - there is ample evidence that the quantity stated to have been exported is a misrepresentation. Investigations have also revealed that ARE-1s submitted to the customs authorities were not authentic. An attempt has been made to portray the agent as the villain of the piece; this fails to impress as there is no conceivable motive for the agent to indulge in such misdemeanour when the appellant-exporter, admittedly, would derive the benefit of higher credit entitlement. The submission of the ARE-1s could well have lulled the customs authorities at load port into accepting the declarations on the shipping bills without a detailed scrutiny. We are conscious that this inference may well be of speculative nature but, in the circumstances, is not a factor that is easily disregarded - A re-determination for the purpose of establishing eligibility of export incentive does not stand on the same footing as an assessment which is a statutory pre-requisite for levy of duties. Therefore, the findings of the adjudicating authority are not in any way compromised. The appellants have not been able to furnish adequate justification for their appeal to sustain - appeal dismissed - decided against appellant.

Issues Involved:
1. Appropriateness of invoking section 113(d) of Customs Act, 1962.
2. Authority for re-determination of export value.
3. Validity of penalties imposed on directors of the exporter company.
4. Legitimacy of the re-determination of assessment without review and appeal.

Detailed Analysis:

1. Appropriateness of Invoking Section 113(d) of Customs Act, 1962:
The Tribunal found ample evidence that the quantity stated to have been exported was a misrepresentation. Investigations revealed that the ARE-1s submitted were not authentic. The appellants' attempt to blame the agent was unconvincing, as the exporter would benefit from higher credit entitlement. The Tribunal referenced the Supreme Court's decision in Commissioner of Central Excise & Customs, AP v. Suresh Jhunjhunwala, which clarified that Section 113(d) covers goods attempted to be exported contrary to any prohibition under the Act or any other law. The Tribunal concluded that the declarations and supporting documents were erroneous, thus justifying the confiscation of goods under Section 113(d).

2. Authority for Re-determination of Export Value:
The Tribunal referenced the decision in Abhishek Exports v. Commissioner of Customs, Cochin, which supported the Department's authority to re-determine the value of the goods. The Tribunal noted that the appellants had not declared the correct value of the export goods under Section 14 of the Customs Act. The Supreme Court in Om Prakash Bhatia's case held that over-invoicing of export goods results in illegal/irregular transactions in foreign currency, making the goods "prohibited." The Tribunal upheld the re-determined value and the penalties imposed.

3. Validity of Penalties Imposed on Directors of the Exporter Company:
The Tribunal cited its decision in Ramesh Jain v. Commissioner of Customs (G), Mumbai, affirming that directors of the exporter company can be proceeded against. The Tribunal found that the directors were liable for the penalties imposed, as they were responsible for the misdeclaration and overvaluation of the export goods.

4. Legitimacy of the Re-determination of Assessment Without Review and Appeal:
The appellants argued that a fresh determination of assessment without review and appeal was not correct in law, referencing the decision in Collector of Customs, Cochin v. Arvind Export (P) Ltd. The Tribunal distinguished the present case, stating that re-determination for establishing eligibility of export incentive does not equate to an assessment for levy of duties. The Tribunal found that the adjudicating authority's findings were not compromised by the ruling in Arvind Export (P) Ltd.

Conclusion:
The Tribunal concluded that the appellants failed to provide adequate justification for their appeal. The evidence supported the misrepresentation and overvaluation of the export goods, justifying the confiscation and penalties imposed. The Tribunal found no reason to interfere with the impugned order, and the appeals were consequently rejected.

(Pronounced in Court on 30/03/2017)

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