2018 (4) TMI 1048 - AT - Customs

Duty Drawback - overvaluation of export goods - entire case was made out on the basis of market enquiry - Held that - Since the market enquiry report is not on record, it cannot be found out whether the goods in respect of which market enquiry was conducted is identical goods to the export goods. Therefore, in absence of any such details, it was not correct on the part of the adjudicating authority to come to a conclusion that the appellant has done the overvaluation of the export goods. The goods were not available for confiscation. In such case, neither confiscation should have been ordered nor redemption fine be imposed - penalty have to be reconsidered. Appeal allowed by way of remand.

Summary

Issues: Confiscation of export goods, imposition of redemption fine, imposition of penalty, overvaluation of export goods, principles of natural justice violation

The judgment addresses the issues of confiscation of export goods, imposition of redemption fine, and imposition of penalty based on alleged overvaluation of export goods with the intention to claim fraudulent drawback. The appellant argued that the market enquiry report was not provided, leading to arbitrary enhancement of the export goods' value. The appellant claimed that the drawback amount was lower than the declared value and that the entire remittance for the export sale was received, indicating no overvaluation. The Tribunal found the proceedings arbitrary due to the lack of the market enquiry report, emphasizing the violation of natural justice principles. Consequently, the Tribunal directed the adjudicating authority to provide the market enquiry report to the appellant for a fair opportunity to respond. The Tribunal set aside the confiscation of goods and redemption fine since the goods were not seized or released provisionally, making them unavailable for confiscation. The penalty imposition was to be reconsidered after resolving the overvaluation issue.

The judgment highlights the importance of procedural fairness and adherence to natural justice principles in customs matters. It underscores the necessity for providing all relevant reports and documents to the concerned parties for a fair adjudication process. The Tribunal's decision to remand the case back to the adjudicating authority demonstrates the commitment to ensuring a just and transparent resolution of disputes related to valuation and customs duties. The reliance on previous judgments and legal precedents further strengthens the appellant's argument regarding the need for proper evidence and justification before imposing penalties or fines in customs cases. Overall, the judgment serves as a reminder of the significance of due process and thorough examination of evidence in customs disputes to prevent arbitrary actions and uphold the rule of law.