2017 (8) TMI 876 - AT - Customs

Valuation of exported goods - The value quoted by the informers in the market was used against the appellant and declared value of the goods meant for export was reduced for no reason - Held that - Market enquiry was not the sole evidence used by Revenue in the adjudication to find mis-declaration of value of export and reduced the value of over-valued goods declared to Customs. Department found from market that the goods meant for exports were available in market at very low prices. That established overvaluation of exportable goods to secure undue benefit by appellant - Futile exercise was made by the appellant to challenge allegation without placing terms and condition of the job working and value of the exported goods. In absence of any basis, being provided by appellant to contradict enquiry result, appellant failed to prove its case. No cogent and credible evidence were led to prove that there was no mis-declaration of the value of the goods exported. In so far as the penalty on the three appellants are concerned, that is reduced from ₹ 4,00,000/- to ₹ 1,00,000/- each in proportion to the re-determined value of the impugned goods at ₹ 8,85,500/- for DEPB scraps as against declared FOB value of ₹ 29,38,320/-. Appeal allowed - decided partly in favor of appellant.

Summary

Issues: Alleged overvaluation of exported goods, use of market survey as evidence, failure to confront appellant with evidence, challenge of cost and market price, penalty reduction.

Alleged Overvaluation of Exported Goods:
The appellant contended that there was no overvaluation of garments exported to Dubai and that the value determined by the Revenue from the market should have been presented to the appellant for rebuttal. However, the market survey results were used against the appellant without their knowledge, leading to a reduction in the declared value of the goods meant for export. The appellant argued that statements recorded were not shared for rebuttal, and the denial of cross-examination by the Revenue hindered the adjudication process. On the other hand, Revenue asserted that evidence was collected following due process and indicated deliberate overvaluation of the goods. The Tribunal noted that the Department found that the goods meant for export were available in the market at lower prices, establishing overvaluation by the appellant to gain undue benefits.

Use of Market Survey as Evidence:
The Tribunal highlighted that the market enquiry was not the sole evidence used by Revenue to establish mis-declaration of the export value. It was noted that the appellant did not challenge the cost and market prices of the goods purchased, and the basis of costing provided by R.K. Bhardwaj remained uncontroverted. The appellant's failure to provide a basis to contradict the enquiry results weakened their case. The Tribunal emphasized that without credible evidence to disprove mis-declaration, the test purchase report and costing data supported the finding of overvaluation.

Failure to Confront Appellant with Evidence:
The appellant raised concerns about not being confronted with the evidence gathered from the market survey for rebuttal. The Tribunal acknowledged this issue but ultimately found that the appellant failed to provide substantial evidence to counter the allegations of mis-declaration. The lack of a strong defense based on terms, conditions, and values of the exported goods contributed to the failure to disprove the overvaluation.

Challenge of Cost and Market Price:
The appellant's attempt to challenge the allegations without presenting a clear basis or evidence regarding the job working and value of the exported goods proved futile. The Tribunal noted that the appellant did not provide sufficient evidence to contradict the enquiry results, leading to the failure to establish that there was no mis-declaration of the exported goods' value.

Penalty Reduction:
Regarding the penalty imposed on the appellants, it was reduced from ?4,00,000/- to ?1,00,000/- each in proportion to the re-determined value of the impugned goods. This reduction was based on the precedent set in the case of Commissioner of Customs, Mumbai Vs. Mansi Export, where penalties were adjusted in accordance with the re-determined values. The Tribunal clarified that the penalty reduction was not arbitrary but followed established legal principles.

In conclusion, the appeals were partly allowed based on the findings related to the overvaluation of exported goods, the use of market survey evidence, the failure to confront the appellant with evidence, the challenge of cost and market price, and the subsequent reduction in penalties in line with legal precedents.