2018 (5) TMI 1142 - AT - Customs

DEPB credit - mis-declaration of value of export goods to avail excess DEPB credit - Held that - It is settled position of law that value of transactions of export/import are required to be done on the basis of the transaction value, as per Section 14 - In the present case, reasons for rejection of transaction value are not clearly forthcoming. It appears to us that the transaction value has been rejected only on the basis of the market enquires conducted with other local exporters. This cannot be a basis for rejection of transaction value, particularly in view of the fact that the foreign importer has remitted the proceeds of the export goods in full - appeal allowed - decided in favor of appellant.

Summary

Issues: Mis-declaration of export goods value for availing excess DEPB credit. Rejection of transaction value based on market enquiries.

Analysis:
1. The appeal was filed against the Order-in-Original regarding mis-declaration of export goods value for DEPB credit. The Customs Authorities found the goods to be of low quality with unusually high declared values. Investigations revealed mis-declaration of quantity to avail excess DEPB credit. Further, market enquiries and Textile Committee opinions were used to establish overvaluation.

2. During the appeal hearing, the appellant did not appear, and the findings of the adjudicating authority were reiterated. The allegation was that the appellant mis-declared the export goods value to claim excess DEPB credit, based on market enquiries and Textile Committee opinions. The appellant challenged the basis of market enquiries, claiming lack of access to the information used against them.

3. The Tribunal noted that export/import transactions should be valued based on transaction value as per Section 14. Rejection of transaction value requires following Customs Valuation Rules. However, in this case, the rejection of transaction value was solely based on market enquiries with local exporters, without clear reasons. The Tribunal emphasized that the foreign importer had paid in full, and the goods were already allowed for export, making confiscation impossible.

4. Consequently, the Tribunal set aside the impugned order, highlighting that rejection of transaction value solely on market enquiries was insufficient. The appeal was allowed, emphasizing the importance of following proper valuation procedures and rules in such cases.

Conclusion:
The judgment focused on the mis-declaration of export goods value for DEPB credit and the rejection of transaction value based on market enquiries. It underscored the necessity of adhering to proper valuation procedures and rules, ultimately setting aside the impugned order and allowing the appeal.