9911796707
TMI Blog1999 (8) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... ani Infin Pvt. Ltd. His statement was recorded under Section 108 of the Customs Act, 1962. For a proper understanding of the circumstances under which these musical greeting cards are exported with an inflated value, we read the deposition as quoted in the impugned order :- The musical greeting cards exported by them would not be more than Rs. 45/- to Rs. 50/- per card and the same were supplied to them by one Shri Patnayak of M/s. Swagtika International 14/C/4 Brindavan Society Thane and they had over invoiced the export value more than 4 times to generate more money and to escape from income tax liability and that in the export of enamel paint, they had similarly generated profits to the extent of Rs. 33,00,000.00 and they had made part payment of Rs. 3,60,000.00 to M/s. Swagatika International towards supply of 20025 Nos. of greeting cards, that they did not have any written agreement with the purchasing firm at Moscow, that they had authorised M/s. Syndicate Cargo Service to handle their consignment for export, that he had not signed any shipping bills, that he had no knowledge about the Custom House Agent for their export consignments and that they had given the fake addres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(i) of the Act. This order of the Commissioner is under challenge. 2. The main argument advanced by the learned counsel representing the appellant is that musical greeting cards are not prohibited goods. They are not liable to any duty either. The Shipping Bills produced by the appellant correctly showed the full value of the goods sought to be exported. When the goods sought to be exported are not prohibited goods and are not liable to duty, customs authorities cannot take any action in relation to such goods when full value of the goods sought to be exported is given in the Shipping Bill. The value given in the Shipping Bill in relation to the musical greeting cards was the value agreed upon between the exporter and the foreign buyer. That contract was a genuine one and letter of credit was opened by the buyer for the entire amount. Exporter was not trying to get any tax concession under any law in force in India. Nor was the exporter trying to take advantage of the value realised by this export for getting foreign goods imported into India. In these circumstances, it was argued that the action taken by the Commissioner in the impugned order is totally unwarranted and illegal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 108 of the Customs Act, 1962 it is crystal clear that the exporter was bringing into India amounts which are not legally due in a clandestine manner. This method resorted to by the exporter will certainly go to affect the economy of the country. How the Courts are to approach such issues was considered by a Constitution Bench of the Supreme Court in McDowell Co. Ltd. v. Commercial Tax Officer, 1997 (69) ECR 29 (SC). After an exhaustive survey of decisions on the point, Justice Chinnappa Reddy expressed the view : - The evil consequences of tax avoidance are manifold. First, there is substantial loss of much needed public revenue, particularly in a welfare state like ours. Next, there is the serious disturbance caused to the economy of the country by the piling up of mountains of blackmoney, directly causing inflation. Then there is the large hidden loss" to the community (as pointed out by Master Sheatcroft in 18 Modern Law Review 209) by some of the best brains in the country being involved in the perpetual war waged between the tax-avoided and his expert team of advisers, lawyers and accountants on the one side and the tax-gatherer and his perhaps not skil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange Regulation Act is the customs authorities. As per the provision contained in Section 67 of the Foreign Exchange Regulation Act, restriction imposed by Section 18 shall also be deemed to have been imposed under Section 11 of the Customs Act and the provisions of the Customs Act shall have effect. By virtue of this provision, we are of the view that the correctness of the declaration made by the exporter in the prescribed form can be investigated into by the customs authorities. In this view of the matter, the customs authorities are legally entitled to have recourse to the provisions contained in Section 14(1) of the Customs Act for ascertaining the value of the goods. 8. In accordance with the provisions contained in Section 18(1) of the Foreign Exchange Regulation Act, Central Government in the Ministry of Finance issued notification dated 31-12-1993. As per that notification, Central Government may prohibit export of all goods to any place outside India unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence true in all material particulars which may, among others shall include the amount representing the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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