2019 (1) TMI 621 - AT - Customs

Fraudulent availment of Duty Drawback - overvaluation of export goods - demand based on photocopy of the Bill of Entry/invoice in the importing country - Held that - There is no dispute that the appellant has received payment in freely convertible foreign currency against all six shipments. This fact has been recorded in the show cause notice and also in the impugned order. It is also seen that there is no confessional statements or corroborative evidence to establish the allegation of overvaluation. There is no dispute over the fact that the goods were cleared by the Indian Customs after the proper examination of the goods, as per the prescribed norms. The only document on which the Revenue has placed reliance is the photocopy of the invoice presented by one of the overseas buyer M/s Saeed Al Mutorshi Ltd., wherein the value of the imported goods has been declared extremely low i.e. about ₹ 10/- per readymade garment - It is settled legal position that mere photocopy of the invoice received from overseas buyer/ importer is not sufficient to uphold that there is mis-declaration in value by the Indian seller/ Indian exporter - In the present case, there is no corroborative evidence to suggest the overvaluation of the export goods. There is no corroborative evidence to establish the allegation of overvaluation, whereas there is overwhelming evidence produced by the appellant in support of the fact that the value declared in the shipping documents by them is correct and/or plausible - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Allegation of overvaluation by the appellant to claim duty drawback fraudulently.

Analysis:
The dispute in the appeal revolved around whether the exporter had overvalued goods to fraudulently claim duty drawback. The appellant exported readymade garments to two different entities in Dubai, under the claim of duty drawback. The Directorate of Revenue Intelligence (DRI) alleged that the actual value declared was significantly lower than what was claimed, based on an invoice filed by the foreign importer. A show cause notice was issued, denying duty drawback and imposing a penalty under the Customs Act. The adjudicating authority upheld the allegations, denying the duty drawback and imposing a penalty of ?25,77,355.

The appellant's advocate argued that all payments for the consignments were received in foreign currency, with no evidence of irregular payments or connivance. They contended that the goods were cleared after proper assessment by customs, and the alleged overvaluation was not corroborated by substantial evidence. The appellant presented extensive evidence, including payment receipts and examination reports, to support the declared value. They challenged the reliance on a single invoice from the importer in Dubai, emphasizing the lack of attestation or corroboration.

After hearing both parties, the Tribunal noted that the appellant received payments in foreign currency, with no confessional statements or corroborative evidence supporting the overvaluation allegation. The Revenue primarily relied on a photocopy of an invoice from one overseas buyer, which the Tribunal deemed insufficient to prove overvaluation. Citing legal precedents, the Tribunal emphasized the need for corroborative evidence in cases of alleged mis-declaration of value. As there was no substantial evidence supporting overvaluation and considering the evidence provided by the appellant, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the lack of corroborative evidence to establish overvaluation and the substantial evidence presented by the appellant supporting the declared value in the shipping documents. The decision highlighted the legal requirement for substantial corroboration in cases of alleged mis-declaration of value, ultimately leading to the allowance of the appeal and the setting aside of the impugned order.