2009 (5) TMI 185 - AT - Customs

Art silk sarees have been confiscated for not corresponding to the declared description and the value, under the provisions of Section 113(ii) of the Customs Act, 1962 - submission of the exporters that in the absence of any evidence of any contemporary export of identical goods at lower price, declared value of the export goods cannot be rejected in terms of Section 114, requires to be accepted in the light of the ratio of the Tribunal s decision in Advance Exports v. CC, Kandla 2007 - TMI - 2324 - CESTAT, AHMEDABAD - plea that sale proceeds of goods exported under two Shipping Bills have been realized and therefore the amount remitted has to be accepted as the price of the goods is also a contention which merits acceptance - charge of over invoicing of art silk sarees is set aside as not sustainable. Confiscation not justified

Summary

Issues:
1. Confiscation of art silk sarees for not corresponding to declared description and value under Customs Act, 1962.
2. Imposition of penalty and fine on the exporters.
3. Rejection of declared value of export goods and imposition of penalty under Section 114.
4. Treatment of art silk sarees as "made ups" for DEPB claim.
5. Entitlement to DEPB benefit at the rate of 9% FOB.

Analysis:

1. The judgment revolves around the confiscation of 2728 pieces of art silk sarees for not matching the declared description and value under Section 113(ii) of the Customs Act, 1962. The exporters were penalized with a hefty amount and a fine in lieu of confiscation was also imposed.

2. The Tribunal considered the submissions from both sides, particularly focusing on the absence of evidence of contemporary export of identical goods at a lower price. Relying on a previous Tribunal decision, it was concluded that the charge of over-invoicing of art silk sarees was not sustainable, leading to the setting aside of the penalty and confiscation.

3. Regarding the DEPB claim, the authorities had categorized the art silk sarees as "made ups," while the exporters argued that they should be classified as fabrics under a different product code. Citing a CBEC Circular, the Tribunal accepted the exporter's contention and allowed the DEPB benefit at a rate of 9% FOB, despite not being entitled to the higher rate as per the Board's order.

4. Ultimately, the Tribunal determined that there was no contravention of Section 113(ii) and, therefore, ruled in favor of the exporters by setting aside the confiscation, penalty, and fine, thus allowing the appeal.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, Chennai, providing a comprehensive understanding of the legal reasoning and conclusions reached in the case.