2022 (8) TMI 183 - AT - Customs

Valuation of export goods - rejection of declared value - claim of duty drawback wrongfully - value was liable to be rejected as the export goods were found of inferior quality as per examination conducted by the officials - redetermination of value under Rule 6 of the CVR 2007 as rule 4 5 could not be applied as goods of like kind and quality were not available in the market - Seizure of the goods was on a reasonable belief or not - penalty in terms of the Section 114 (ii) 114 AA of the Customs Act, 1962 - HELD THAT - It is the settled law that admissions need no proof and are admissible as such if not retracted. Apparently neither appellant nor said Mr. Anit Kumar Jha have retracted their statements. These statements are therefore out of the scope even of Section 138B of Customs Act, 1962. The appellant has strongly impressed upon that alleged mis-declaration and overvaluation was absolutely unintentional and non-deliberate act of the appellant as it was not in the knowledge of the appellant at the time of filing the shipping bills along with the requisite documents that the goods are old used ones - It is apparent on record that the impugned shipment was detained on 17.02.2017, the Commissioner (Appeals) has held the letter dated 31.01.2017 without any acknowledgment for the inferior quality of goods as nothing but an afterthought. Per contra the emphasis of appellant while challenging these findings is that since the shipment was detained on 17.02.2017, there was no occasion with the appellant to mention the observations of Panchnama dated 17.02.2017 in the letter dated 31.01.2017. Praying withdrawal of the shipment/cargo that too on a ground of order being cancelled by the buyer due to the late delivery is a deliberate concealment on the part of the appellant. In such circumstances, the said concealment was nothing but an afterthought to cover up the mistake which the appellant had already committed i.e. of mis-declaration of the goods and overvaluing them with the sole intention of availing a higher duty drawback. The duty drawback is otherwise not available with respect to the export of old and used goods. These observations are sufficient to hold that the above observed concealment was with the intention to mis-declare and overvalue the goods to claim ineligible duty drawback. Commissioner (Appeals) is held to have committed no error while holding that letter dated 31.01.2017 was an afterthought. Hence, there are no infirmity as far as the rejection of declared value of export goods and the order for their confiscation and imposition of redemption fine is concerned that too on the bases of letter dated 31.01.2017 being an afterthought. Penalty under Section 114 (iii) and 114 AA of Customs Act, 1962 - HELD THAT - The plea of appellant that Section 114 (iii) and Section 114 AA are not applicable on the companies but the same is not acceptable as legislature has never intended to exclude a juristic person like, company, from word persons . Both these section penalizes person. As per Section 3 (42) of General Clause Act person shall include the company or association or body of individuals whether or not incorporated. Similar is the intention of income tax statute under Section 2 (3) thereof. In view of entire above discussion it is held that the first ground of appellant challenging the imposition of penalty upon the appellant company and its Director is therefore not sustainable. The intentional concealment about mis-declaration stands corroborated from the another observe fact that the impugned letter, despite repeated demands, was never produced by the appellant before the original Adjudicating Authority despite that time for producing the same was requested and despite that several opportunities were given to the appellant to produce the said letter - These facts corroborate the alleged act to be intentional act of mis-declaration of goods and overvaluation thereof. These facts also corroborate the intention of the appellant for exporting the inferior quality goods against higher values and intentions to avail higher duty drawbacks against export of such goods for which the said drawback is not available. Accordingly, it is held that the plea of innocence as taken by the appellant that too solely based upon the letter dated 31.01.2017 has rightly been rejected by Commissioner (Appeals). The order imposing penalties upon appellant as well as on its Director under Section 114 (iii) and 114 AA of Customs Act, 1962 is also hereby upheld - Appeal dismissed.

Summary

Issues Involved:
1. Mis-declaration and overvaluation of exported goods.
2. Confiscation of goods and imposition of redemption fine.
3. Imposition of penalties under Section 114 (iii) and 114 AA of the Customs Act, 1962.
4. Applicability of penalties on companies.

Issue-wise Detailed Analysis:

1. Mis-declaration and Overvaluation of Exported Goods:
The appellant, M/s. Bhavana Jindal Exim Pvt. Ltd., was found to have declared old and used leather jackets as new to avail higher duty drawback. The Directorate of Revenue Intelligence (DRI) detained and examined the shipments, finding the goods to be old and used, contrary to the declared description. The Director of the appellant admitted that the goods were old and used and that their value was inflated. The Show Cause Notice alleged deliberate mis-declaration and overvaluation to wrongly avail drawback, which was confirmed by the Adjudicating Authority and upheld by the Commissioner (Appeals).

2. Confiscation of Goods and Imposition of Redemption Fine:
The Commissioner (Appeals) rejected the declared value of the exported goods, held them liable for confiscation, and imposed a redemption fine based on findings that the goods were of inferior quality and the value was correctly re-determined under Rule 6 of the CVR 2007. The appellant's contention that the letter dated 31.01.2017 was not an afterthought was rejected, as the letter did not indicate the inferior quality of goods and was sent after the appellant already knew about the mis-declaration.

3. Imposition of Penalties under Section 114 (iii) and 114 AA of the Customs Act, 1962:
The appellant argued that penalties could not be imposed on the company and that there was no intent to mis-declare. However, the Tribunal upheld the penalties, stating that the appellant had knowledge of the mis-declaration when the letter dated 31.01.2017 was sent, and the concealment was deliberate. The Tribunal found no infirmity in the rejection of the declared value, confiscation of goods, and imposition of penalties.

4. Applicability of Penalties on Companies:
The appellant contended that penalties under Section 114 (iii) and 114 AA could not be imposed on companies. The Tribunal rejected this argument, stating that the term "person" includes companies as per Section 3 (42) of the General Clauses Act and similar provisions in the Income Tax Act. Therefore, penalties were rightly imposed on the appellant company and its Director.

Conclusion:
The Tribunal dismissed the appeals, upholding the order of the Commissioner (Appeals) regarding the rejection of the declared value, confiscation of goods, imposition of redemption fine, and penalties under Section 114 (iii) and 114 AA of the Customs Act, 1962. The Tribunal found that the appellant's actions were intentional and aimed at availing undue duty drawback.