2006 (9) TMI 19 - AT - Customs

Customs Duty drawback Enquiries conducted by DRI, Madras, reveled that goods were available for sale at much lover price than the price at which the party has exported goods and claimed drawback relying upon some invalid evidences. Since exports were allowed after due verification of all aspects, claim of duty drawback is upheld.

Summary

Issues:
Revenue aggrieved by dropping proceedings against exporters for recovery of drawback due to alleged overvaluation.

Analysis:
The case involved exporters of bicycle parts who were accused of overvaluation to obtain inadmissible drawback. The Commissioner of Customs, Mumbai, dropped the proceedings against the exporters, leading to appeals by the Revenue. The Revenue alleged that the goods were over-invoiced, exceeding market values, making them ineligible for drawback. The Commissioner, however, found discrepancies in the evidence and market comparisons provided by the Revenue. The Commissioner emphasized that the goods' quality and valuation differed between Mumbai and Madras exports, rendering the comparisons invalid. The Revenue argued that documents from Moscow customs and findings by DRI, Madras, supported overvaluation claims, but the Commissioner refuted these arguments, highlighting inconsistencies in the evidence presented.

The Revenue contended that the Indian exporters needed to prove offloading in a foreign port to claim drawback and that documents from Moscow customs indicated overvaluation. However, the Tribunal found discrepancies in the weight and details of goods exported from Mumbai and Madras, rendering the Moscow customs documents irrelevant. The Tribunal also noted that the Revenue failed to establish a correlation between the exporters' actions and the documents obtained. Additionally, the Tribunal highlighted the link between sale proceeds and drawback, emphasizing that the repatriation of sale proceeds validated the claimed FOB values.

The Tribunal further rejected the Revenue's argument that lower values declared by Russian importers proved overvaluation by the exporters. The Tribunal emphasized that actual sale transactions, not quotations, should determine valuation. Moreover, the Tribunal noted the lack of sealed samples from Madras exports and the absence of evidence supporting the Revenue's claims. The Tribunal also discredited photocopies of foreign documents and emphasized the need for proper evidence on purchase prices and procurement processes.

In conclusion, the Tribunal upheld the Commissioner's decision, finding no legal flaws in dropping the proceedings against the exporters. The Tribunal rejected the Revenue's appeals, emphasizing the lack of substantiated evidence and inconsistencies in the valuation claims. The judgment was pronounced on 19.9.2006, affirming the dismissal of the Revenue's appeals.