9911796707
TMI Blog2002 (3) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that he is a sole proprietorship concern and Shri Anil Kapoor is its proprietor and it was formed in the year 1994-95. 2.2 The applicant is a Government of India recognised Trading House engaged in the manufacture and exports of cotton, acrylic, woollen knitwear and also into the trading/export of various items like stainless steel utensils, toothbrush, toothpaste, shaving cream, marble kitchenware etc. The applicant s export turnover during last two years have been to the tune of Rs. 65 crore per year approx. The applicant started this proprietorship concern in the year 1994-95 and in course of their manufacturing activities and exports they have obtained about sixty duty free advance licences under DEEC Scheme from the office of the Directorate General of Foreign Trade (DGFT) against which the applicant were entitled to import various duty free items such as acrylic fibre, raw wool, wool tops, mohair scoured and mohair top so that they could use them in their manufacturing process directly and/or through other processors manufacturers and ultimately such duty free imported material were to be utilised exclusively for the purposes of manufacture of resultant export pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity from prosecution for any offence under the Customs Act, 1962, Indian Penal Code and/or any other Central Act and (IV) direct the authorities concerned including DRI, Delhi Zone, New Delhi not to proceed further with the subject matter till the pendency and final disposal of this application and (V) pass such other further order(s), direction(s) as this Hon'ble Commission may deem fit and proper under the facts and circumstances of the present case. 3. It may be mentioned that the applicant has approached the Settlement Commission under Section 127B of the Customs Act, 1962. During the material time, para (a) to first proviso stipulated that application can be filed by an applicant if he has filed bill of entry, shipping bills etc. or a show cause notice had been issued. It was only through the Finance Act, 2000 that and in relation to such Bills of entry or Shipping Bills was added. 4. The Revenue vide letter dated 12-10-99 has reported that the Directorate has initiated investigation in the case of misuse of advance licence and DEEC scheme by M/s. Beeta Exports. The office and the residential premises of M/s. Beeta Exports/Proprietor of M/s. Beeta Exports w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Chief Metropolitan Magistrate against the Proprietor of M/s. Beeta Exports for non-appearance, in pursuance of summons issued under Section 108 of the Customs Act, 1962. The said complaint has been disposed off by the Hon'ble Additional Chief Metropolitan Magistrate, New Delhi stating inter alia that provisions of Settlement Commission are self-contained and the Settlement Commission has all exclusive jurisdiction over the case and that the Settlement Commission has admitted the said application. The Hon'ble Additional Chief Metropolitan Magistrate, New Delhi has observed as below :- Since the matter has been settled the complaints cause of act which arose prior to the settlement cannot proceed further. The execution of NBWs were stayed till today. They are withdrawn. 8.3 In this background, it may be mentioned that the statement of Shri Anil Kapoor was recorded on 24-7-1999 wherein he has stated that he is engaged in export and import business, that he had made exports mainly to Russia, that certain records have been seized from him, that he would deposit the duty amount due from him for non-fulfilment of export obligation, that his passport is being surrendered by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the value so determined the DGFT permits credit. In this case no market inquiry report has been produced by the department. (III) It was further submitted that there is also no dispute that the sale proceeds has been received and the realization certificate has been already submitted. Unless these evidences are discredited there is no reason why the value declared by the applicant cannot be accepted. (IV) The learned Advocate in this context referred to the Madras High Court judgment, reported in the [1999 (105) E.L.T. 258 (Mad.)] in the case of J.G. Exports v. Commissioner of Customs, Chennai. The learned Consultant drew the attention of the Commission to Paragraphs 10, 12, 14, 15, 16 of the said judgment. Copies of the circulars referred to therein were produced by the Advocate. (V) Para 2 of Circular No. 69/97, dt. 8-2-97 reads as : 2. Object of limiting the amount of Credit Based on the Present Market Value (PMV)-The condition of restricting the credit - amount under DEPB Scheme to 50% of the PMV was prescribed to prevent the exporters from obtaining excessive amount of credit by inflating the FOB price of the export product. It is stated that the FOB value may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt submitted on 24th Sept. 2001, stating that the investigation and other proceedings, including prosecution proceedings initiated by the Enforcement Directorate against the captioned party relates to non-realisation of export proceeds amounting to Rs. 40.06 crores and consequent violation of the provisions of Sections 18(2) and 18(3) of FERA, 1973. These two matters, the one before the Commission and the other before the Enforcement Directorate, are independent of each other. (IV) The Revenue was represented by Shri Umakant Mishra, Sr. Intelligence Officer, Directorate of Revenue Intelligence, New Delhi. The Revenue, reiterated the written submissions dt. 5-2-2002. It was submitted that there is no dispute of duty liability under the DEEC scheme. As regards the DEPB liability the party s contention that the value declared by the importer is not within their purview does not hold true, as all the export documents such as shipping bills, airway bills etc. submitted to Indian Customs show higher value when compared to the corresponding documents produced to Dubai Customs for clearance of consignee there. It was on the basis of the certificate issued by the Delhi Chamber of Commerce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EC Scheme is Rs. 8,63,25,976/- and not Rs. 7,95,75,715/- as admitted by the applicant. 11.3.2 On the issue of DEPB and drawback, the Commissioner (Investigation) did not quantify the liability as the records were with the Revenue and therefore the Revenue was directed to quantify the same. 11.4 The Revenue vide their letter dated 6-9-2001 has submitted as follows :- I. DEPB DUTY LIABILITY As regard the DEPB claims made by the Party, kind attention is drawn to this office letter No. 23/73/99-DZU, dated 11-10-2000 27-4-2001 (copy enclosed). As is evident from the aforesaid letters, the value of the goods exported by the party declared at the Dubai port by the importer is much less than that declared by the party in shipping documents with Customs authorities at Air Cargo Complex, New Delhi. As per the declarations with Dubai Customs, the value of goods (nibs) comes to only US $ 0.30 per piece, whereas the value declared before Indian Customs was in the range of US $ 9.00 to 10.50, which proves that the party indulged in massive overvaluation of FOB value in shipping documents to avail DEPB credits fraudulently. Accordingly, out of total DEPB credit of Rs. 1,61,89,269/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hows that out of 289 Shipping Bills, only in eight cases involving a total drawback involving Rs. 23,45,540/- export proceeds have been realised by the party as per details given below :- Sl. No. S/Bill No. DBK amount in Rs. 1. 1030219 443450 2. 1030220 345170 3. 1030221 310240 4. 1029472 316960 5. 1029475 588120 6. 1027205 341600 7. 1029474 235200 8. 1030365 345170 Total 23,45,540/- Therefore, the party has failed to realise the export proceeds in remaining 281 Shipping Bills involving Drawback of Rs. 2,83,82,777/-. The party is not entitled to this Drawback amount received by them in these cases, where export proceeds are not realised and is required to refund the same under Rule 16A of Customs Central Excise Duties Drawback Rules, 1995. Further, preliminary investigations conducted by DRI also shows fraudulent over-invoicing by the party in its export of goods under Drawback claims. Evidence available indicates that the party had fraudulently issued two sets of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds the market value of the goods thereby inviting prohibitions of Section 76(1)(b) of the Customs Act, 1962 indicating that the Drawback claim was not admissible to the party in these cases. However, the true extent of the fraud and implications thereof can only be ascertained when all export documents such as export invoices, Bill of lading etc. are available. The party may be asked to provide all these documents in case of all Shipping Bills, under Drawback Scheme. Overseas inquiries are being conducted in this regard separately. In view of the above, it is evident that M/s. Beeta Exports are required to refund Drawback amount of Rs. 2,83,82,777/- in respect of 281 S/Bills for which export proceeds have not been realised till now. Even in respect of remaining 8 S/Bills involving Drawback of Rs. 23,45,540/- there is a suspicion of over-valuation of FOB values to fraudulently avail Drawback benefits and even this amount of drawback might not be admissible to the party because of prohibitions of Section 76(1)(b) of the Customs Act, 1962. 11.5 The applicant was asked to comment on the submission made by the Revenue. The applicant vide letter dated 19-1-2002 has submitted as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place is concerned, that is not within our purview/jurisdiction. We have realised through Banking Channels the full Export Proceeds as declared in Shipping Bills. We also have to submit that the declaration of lower value has no benefit for us. As far as Delhi's Chamber of Commerce invoices are concerned, we have no connection with that. Further, in these invoices, the description given is Fountain Pen Nibs only and not Fountain Pen Nibs (made of 7.8 carat gold). In view of above given submission, we submit that DRI s plea is based on assumption and conjectures. We pray this Hon'ble Commission that we be allowed the benefit of DEPB for exports made of Fountain Pen Nibs made of 7.8 to 7.96 carat gold. 3. Customs duty liability under Drawback Scheme : In this regard, we refer to your letter dated 20th September 2001, wherein you had enclosed therewith copy of report of DRI. The department had sought refund of drawback of Rs. 2,83,82,777.00 (Rs. Two Crores Eighty-Three Lacs Eighty-Two Thousand Seven Hundred Seventy-Seven Only) on account of 281 Shipping Bills, as the Export Proceeds of these are not realised. We have to submit the plea of DRI is based upon assumption only. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exporter in India. 14. This is more so when it is viewed against the background that the applicant has realised the export proceeds and has submitted the relevant documents from the bank. Once the amounts stands realised, it cannot be said that export value shown in the document is inflated one with an ulterior motive. The country is interested in getting foreign exchange to the extent indicated in the relevant shipping bills and once that is being done, perhaps, it would not be a proper conclusion to allege that the applicant has manipulated the documents to defraud Customs duty at Dubai and therefore the theory advanced by the applicant is reliable. 15. It may be mentioned that in the case of J.G. Exports v. Commissioner of Customs, Chennai - 1999 (105) E.L.T. 258 (Mad.) in the High Court of Judicature at Madras - S.S. Subramani J.) - (Writ Petition No. 8884 of 1998 in W. M. P. No. 13542 of 1998, decided on 20-7-1998), the Hon ble High Court was examining a case of DEPB export, where the Writ Petitioner had exported certain specified goods and the relevant shipping bills were passed by Customs Authorities. In that connection the Court has referred to Circulars bearing No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r fancy or as rituals. Even the pre-amendment circulars were issued for the same purpose of achieving uniformity in imposing excise duty on excisable goods. So, the circular, whether issued before December, 1985 or thereafter should have the same binding effect on the department. 21. Through a catena of decisions this Court has pronounced that Revenue cannot, be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter than an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the department, more so when others have acted according to such instructions. Vide Collector of Central Excise, Bombay v. Jayant Dalal Private Ltd. [1996 (88) E.L.T. 638], Ranadey Micro Nutrients v. Collector of Central Excise [1996 (87) E.L.T. 19], Poulose and Mathen v. Collector of Central Excise [1997 (90) E.L.T. 264], British Machinery Supplies Co. v. Union of India [1996 (86) E.L.T. 449]. Of course the appellate authority is also not bound by the interpretation given by the Board but the assessing officer cannot take a view contrary to the Board s interpretation. 22. We may observe particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Rs. 2,41,31,098/-. 20.3 Considering the financial hardship and still reported non-realisation of sale proceeds relating to some other export made by the applicant, the Commission orders that the applicant should pay the aforesaid amount in instalments. The first instalment of Rs. 20,00,000/- along with interest @ 18% p.a. due thereon shall be paid within a period of thirty days of receipt of this order and thereafter at the interval of 30 days each. The balance amount shall be paid on the 10th instalment. Interest is payable on the outstanding amount on and from expiry of 30 days from the date of receipt of this order at the rate of 18 per cent per annum. Till the payment is complete, the corporate guarantee executed by the applicant shall be continued and kept alive. Only on receipt of the amount along with interest, the corporate guarantee shall get discharged after one month of receipt of full payment. 20.4 Since the applicant has cooperated with the Settlement Commission and made a full and true disclosure of his duty liability, the applicant is granted immunity from penalty and fine. 20.5 The applicant has, however, to pay interest of 10 per cent on the total DEEC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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