2005 (10) TMI 169 - AT - Customs

Summary

Issues:
1. Misdeclaration of goods and value in Shipping Bills.
2. Non-supply of relevant documents to the exporter.
3. Confiscation of goods, denial of drawback benefit, and imposition of penalty.
4. Allegation of misdeclaration by the Customs authority.
5. Challenge to the penalty and denial of drawback.

Analysis:

1. The appellant filed an appeal against the adjudication order passed by the Commissioner of Customs, involving misdeclaration of goods in Shipping Bills. The Customs authority discovered that the scarves were polyester, not Rayon as declared, leading to a show cause notice for confiscation, denial of drawback benefit, and a penalty of Rs. 10 lakhs. The appellant contended that relevant documents were not provided for defense.

2. The appellant argued that crucial documents were not supplied, hindering their defense. They also raised concerns about the sampling process conducted in their absence. Additionally, they claimed that invoices from suppliers proving the cost per piece were not considered, despite being in possession of the Revenue.

3. The Revenue contended that the appellant deliberately misrepresented the scarves as Rayon in Shipping Bills to inflate their value. They emphasized that the market price in the country, not the overseas selling price, is crucial for drawback claims. The Revenue cited a Supreme Court decision to support their stance.

4. The Tribunal found that the appellant misdeclared both the goods and their value, supporting the decision of confiscation due to the market value being lower than the drawback claim. Consequently, the drawback claim was rightfully rejected. The Tribunal upheld the penalty but reduced it to Rs. 5 lakhs considering the potential drawback benefit.

5. Ultimately, the Tribunal upheld the decision of confiscation, denial of drawback, and imposition of penalty, acknowledging the misdeclaration by the appellant. The judgment highlighted the importance of accurate declaration in Shipping Bills and adherence to market value for drawback claims, emphasizing the legal principles governing such cases.