2023 (8) TMI 950 - AT - Customs

Mis-declaration of value to gain undue excess benefit of DEPB Licence - HELD THAT - Admittedly, the Department has obtained the details from SGS India towards inspection carried out by them for the consignments. The value shown in the invoices available with SGS is lesser than the total value of the invoices and export documents raised by the Appellant on the overseas importer. Prima facie, it is seen that the values are different between the Invoices available with the SGS and the export invoices raised by the Appellant. But on their own, they do not prove whether the exports were done at a much higher value or were overvalued. The Appellant has provided details of BRC towards the realization of export proceeds. These BRCs which are filed by the Appellant before the Adjudicating Authority and Tribunal show that in respect of each and every export Invoice and Bill of Exports, the Appellant has been able to get the full realization from the overseas importer, in foreign currency and the same has been converted into Indian rupees by the receiving bank in India. The very fact that the overseas importer has accepted the value cited by the Appellant in the invoices and has honored the payment and has made the full payment, would show that he does not treat that the value of the imported consignment as inflated or overvalued. The data towards the purchase rate of such fabric in India has been provided by the Appellant to be at Rs. 85 to 95 per Meter in India. The Department has not made any effort to verify as to what was the purchase price in India for such fabric. The Department contends that the sale value was inflated by about 330%. For this, they should have checked what is the price of such fabric in India. If the figures of Rs.85 to 95 per meter as given by the Appellant towards the purchase is taken, the same would have the value of about USD 2 at that point of time. When the sale price of USD 2 or 2.10 is considered, there are no over valuation. As per the present calculation of the Department, the sale price should be less than 10 Cents if 330% over valuation is to be considered. In this case, apart from relying on the Invoices found with SGS, no other corroborative evidence in whatever form has been brought in by Department to fortify their allegation. The Department has not undertaken any other investigation towards the purchase cost given by the Appellant. The realized price and the purchase price cited by the Appellant more or less match giving no scope to over-value the consignment, much less over-value it by 330%. The Adjudicating Authority has also not considered the details of BRC submitted by the Appellant to the effect that they have fully realized the value of the export invoices from the overseas importer - The case law of Vishal Exports Overseas Ltd. 2007 (2) TMI 4 - SUPREME COURT is squarely applicable to the facts of the present case, where it was held that the FOB price is supported amply by the BRCs with which no fault is found. Once that is clear, there will be no question to hold that the FOB is inflated. Appeal allowed.

Summary

Issues Involved:
- Allegation of overvaluation of exported consignments to gain excess benefit of DEPB Scheme
- Discrepancy in values between invoices submitted to certifying agency and actual export invoices
- Adjudication confirming demands and penalties based on alleged overvaluation

Summary:
The Appellant exported synthetic fabrics utilizing the DEPB Scheme, with SGS India Pvt. Ltd. certifying the consignments. The Department alleged overvaluation based on discrepancies between the values in SGS's report and the export invoices, leading to a Show Cause Notice. The Appellants argued that the export values were approved by the buyer, supported by bank realization certificates and purchase documents showing market prices. They contended that the Department failed to verify purchase prices and relied solely on the SGS report, initiating proceedings on presumptions. The Appellant cited a relevant case law to support their position.

The Department claimed the Appellant inflated prices by 12 times, benefiting unduly from the DEPB Scheme. However, the Tribunal noted that the Appellant had received full payments from the overseas importer, with BRCs confirming the realization of export proceeds. The Department's valuation calculations were questioned, as they did not consider market purchase prices provided by the Appellant. The Tribunal referenced a Supreme Court case emphasizing the importance of concrete evidence in valuation disputes.

In conclusion, the Tribunal found the Department's lack of investigation into purchase costs and the matching realized prices indicated no overvaluation, let alone by 330%. The Tribunal set aside the impugned order, allowing the Appeals filed by the Appellants with consequential relief, if any, as per law.