2023 (2) TMI 999 - HC - Customs

Levy of penalty u/s 114 of the Customs Act, 1962 - Over-valuation of goods to avail a higher duty drawback - HELD THAT - The reasons provided by the appellant for withdrawal of the export shipments was that the buyer had cancelled both the shipments / cargo due to late delivery. This did not conform with the explanation that the appellants had sought permission to withdraw the shipments on becoming aware that the goods being dispatched were old and over-valued. There is no dispute that the goods were over-valued. Therefore, the questions involved in the present appeals, essentially, are whether the letter dated 31.01.2017 was, in fact, sent and, if so, what is the import of the said letter. The question whether the said letter has been received by the concerned authorities is solely a question of fact. There is no dispute that the said letter was not produced before the adjudicating authority. The Commissioner (Appeals) had found that the delivery of the letter to the department is itself doubtful apart from the fact that the letter did not corroborate the explanation as provided by the appellant. This being a finding of fact, no substantial question of law arises in the present appeals. Appeal dismissed.

Summary

Issues:
1. Impugning an order passed by the Customs, Excise and Service Tax Appellate Tribunal
2. Allegations of over-valuation of goods for higher duty drawback
3. Dispute regarding the authenticity and significance of a withdrawal letter dated 31.01.2017

Analysis:
1. The appellants challenged an order by the Customs, Excise and Service Tax Appellate Tribunal regarding two shipping bills related to the export of leather goods. The Directorate of Revenue Intelligence found the goods to be old and used, leading to a penalty under the Customs Act, which was upheld by subsequent authorities.

2. The controversy revolved around the alleged over-valuation of goods to claim a higher duty drawback. The adjudicating authority denied the claimed drawback and imposed penalties on both the company and one of its directors. The appellants appealed to higher authorities, but their appeals were rejected.

3. The appellants defended themselves by claiming they had requested withdrawal of the export shipments upon realizing the goods were old. They argued that this showed no intention to avail duty drawback. However, the Commissioner of Customs (Appeals) rejected this explanation, citing lack of evidence and inconsistencies in the withdrawal letter.

4. The High Court found no substantial question of law in the case, as the authenticity and delivery of the withdrawal letter were disputed facts. Since the letter was not produced before the adjudicating authority and did not support the appellants' explanation, the appeals were dismissed. The court emphasized that the essential issue was the over-valuation of goods, for which there was no real dispute.

5. Ultimately, the High Court upheld the dismissal of the appeals, concluding that the authenticity and significance of the withdrawal letter were factual matters. The court found no grounds to challenge the lower authorities' decisions based on the disputed letter, affirming the penalties imposed for over-valuation of goods.