2013 (11) TMI 787 - AT - Customs

EXIM DEPB credit Alleged that appellant have show inflated export price with intent to avail higher DEPB benefit Held that - as per law DEPB benefit is to be granted on FOB. value of the goods. There is no legal basis for restricting the benefit on the basis of market value of the goods in India. There is no restriction as to the quantum of profit a person can earn in an export transaction. Further the market value of the goods in India as ascertained based on opinion of three other exporters can only be approximate. In the absence of more convincing proof demonstrating that the value realized was for any consideration other than the value of goods exported, we do not consider it proper to fix the FOB value based on market enquires regarding value of goods in India and restrict DEPB benefit based on such calculation - Decided against Revenue.

Summary

Issues:
1. Denial of DEPB benefit due to shortage of goods and overvaluation.
2. Discrepancy in the declared value of goods for DEPB benefit.
3. Verification of supplier's existence and overvaluation allegations.
4. Adjudication authority's reasoning on overvaluation charge.
5. Legal basis for granting DEPB benefit and market value consideration.

Analysis:
1. The case involved the denial of DEPB benefit due to a shortage of goods and alleged overvaluation. The appellant filed a shipping bill for the export of fabric, but the goods were found short upon examination, leading to a denial of part of the DEPB benefit claimed.

2. The appellant declared a value for the goods, which the Revenue believed to be inflated to claim a higher DEPB benefit. The adjudication order imposed penalties and confiscation based on the discrepancies in the declared value and the actual market value assessed by the Revenue.

3. The verification of the supplier's existence and the allegations of overvaluation were crucial aspects of the case. The appellant claimed to have purchased goods from a specific supplier, but the Revenue raised doubts about the supplier's existence, leading to suspicions of fraudulent practices regarding the declared value of the goods.

4. The adjudication authority provided reasoning for not upholding the charge of overvaluation, citing lack of concrete evidence apart from a market enquiry report. The authority considered various factors, including market prices, payment receipts, and legal precedents, to support the appellant's declared FOB value.

5. The judgment emphasized that DEPB benefit should be granted based on the FOB value of the goods, without restrictions based on market value assessments. The court highlighted the absence of substantial evidence to negate the declared value, leading to the rejection of the appeal filed by the Revenue.

This detailed analysis of the judgment showcases the key issues, arguments presented, and the court's rationale in reaching the decision regarding the denial of DEPB benefit due to shortage of goods and allegations of overvaluation.