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TMI Blog2003 (10) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, he has also imposed penalty of Rs. 1.00 crore (Rupees one crore) upon Shri Sushil Parakh, Proprietor of M/s. Secure International under the provisions of Section 114(iii) of the Customs Act, 1962. Another penalty of Rs. 10.00 lakhs (Rupees ten lakhs) has been imposed upon M/s. S.K. Kanjilal under Section 114(iii) of the Customs Act, 1962, who is a Customs House Agent, under the provisions of Section 114(iii) of the Customs Act, 1962. 2. As per facts on record, M/s. Secure International exported thirteen consignments of 36,07,200 pieces of CONCORD brand ball pens for which purpose they have filed a shipping bill with the Customs Authorities at Kolkata. The total FOB value of the consignment declared in the shipping bill was to the tune of Rs. 5,17,27,509.00 (Rupees five crores seventeen lakhs twenty-seven thousand five hundred nine). The goods were assessed and Let Export Order was passed by the Customs Authorities at Kolkata in terms of the provisions of Section 51 of the Customs Act, 1962. The consignment left the Kolkata Port after the clearance of the goods by the Customs Authorities. But the same were subsequently off-loaded at Visakhapatnam for detailed examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Authorities and it was allegedly found that identical types of pens were available in the market at a much lower rate. 5. On the above basis, proceedings were initiated against the appellants as also against the C.H.A. proposing confiscation of the consignment in question as also for imposition of penalties on the ground that there was an alleged shortage of 4.44 lakh pieces of ball pens and the value declared by the appellants was also much on the higher side. It is seen that during the pendency of the proceedings before the authorities, the appellants made a prayer to the Customs Authorities for allowing them to export the goods in question provisionally in terms of paragraph 2.41 of the EXIM Policy which is to the effect that the goods shall not be withheld by any agency of Central/State Government and in case of any doubt, the authorities concerned may ask for an undertaking from the exporter. However, the above request for provisional export of the goods was not acted upon by the authorities and as per the appellants, their foreign buyer has cancelled the contract and has claimed hefty amount of damages from them. 6. During the course of adjudication proceedings, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They contended that the reasons adopted by the Revenue for lowering the value of the export consignment on the basis of certain market enquiries which themselves varied in price, are not justified inasmuch as the comparison was not made with the identical types of goods. The goods exported by them were high in quality with good quality ink used and the valuation adopted by the Revenue and the show cause notice was deliberately on the lower side so as to deny their just claim of drawback under Section 76(1) of the Customs Act, 1962. 7. As regards the shortage of the goods, they contended that there was no misdeclaration in the quantity of the goods which were cleared by the Kolkata Customs after thorough examination of the goods produced by them. 100% examination at Visakhapatnam by the Customs Authorities was without the involvement of the appellants representative or their C.H.A. They also contended that there is no inventory showing the counting of the goods and mentioning as to how many containers containing how many cardboard boxes and how many packages with a particular number of ball pens were counted. In the absence of such inventories, it is not possible to count such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show the present market-value as selling price of the ball pens with poor quality and with poor finishing purchased by them from the road-side vendors. Shri Mehta submits that the ball pens of different values are available in the market and in the absence of a clear evidence that the ball pens which were purchased by the Customs Officers from the market, are identical to the ball pens exported by the appellants, the value ascertained by the Revenue cannot be adopted. He also submits that the fact that Shri Sushil Parakh accompanied by the Customs Officers at the time of purchase of the ball pens, is of no avail to the Revenue on the face of the clear fact that the appellants ball pens bore a brand name - CONCORD - which carries the higher value. The Revenue has not tried to compare the two types of ball pens and it is also not the Revenue s case that the ball pens purchased by them from the market, were of CONCORD brand. He submits that the adjudicating authority has stated in the Order that he has inspected the samples and found that the ball pens were of poor quality and the ink in most of the samples have already dried up. Shri Mehta, learned Advocate, for the appellants; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be short. The Mahazar was drawn as per the procedure. He submits that the Commissioner has also given reasons for not allowing the cross-examination of the public witnesses. He, further, submits that the appellants contention that such shortages should not be accepted as the examination was done at their back, is of no avail to them, inasmuch as the examination was conducted in the presence of public witnesses. The absence of the detailed inventories would also not act prejudiced to the Revenue s case. 15. As regards the value of the goods, he submits that the ball pens in question were made of poor quality plastic and were not of international standard. On examination, the same were found to be with poor craftsmanship in threading to join different parts together, and as recorded by the adjudicating authority the ink in most of the samples have already dried up. He also submits that the market-enquiries were conducted by associating Shri Sushil Parakh and as such, his subsequent stand that the goods in question bore a brand-name and were better quality ball pens, should not be accepted. 16. He also drew our attention to the statement of Shri Parakh to the effect that CONC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court has held that where the consignment for export is over-invoiced, the same would amount to violation of conditions for import/export of the goods and would render the goods as prohibited goods as defined in Section 2(33) of the Customs Act, 1962, thus making them liable to confiscation. The Hon ble Supreme Court also placed reliance on Section 18 of the Foreign Exchange Regulation Act, 1973, which empowers the Central Government to issue a notification prohibiting the taking or sending out by land, sea or air of all goods or of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing the full export value of the goods. As such, the question of law that over-invoiced export goods can be confiscated, has been settled by the Hon ble Supreme Court in the above-referred judgment, though we note that the said judgment has been arrived at after taking, inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of such cross-examination would or would not help the appellants in their defence plea. In view of the foregoing, we are required to extend the benefit to the appellants in this respect. 19.4 As regards the value of the export consignment, we find that the appellants have declared the F.O.B. value of the ball pens as Rs. 14.37 per piece. The export documents do require them to declare the present market-value of the goods in question, which were relevant for the purposes of claim of drawback. The appellants have strongly contended that the ball pens under export consignment were branded as CONCORD and the same were of higher quality than the ball pens whose market value is being relied upon by the Revenue. The adjudicating authority has observed that Shri Parakh s statement dated 20-5-2002 clearly brings the fact that the brand name - ONCORD - was neither registered nor was a brand of repute and the said brand was also not available in the local market. On the other hand, the appellants have contended that such brand was advertised by them in the international market by way of internet and they have also produced a computer print-out of the same highlighting the quali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken as expert s opinion as regards the quality of the pens. The appellants have also furnished a cost-structure in the Cost Accountants Certificate which stands dismissed by the Commissioner as having no locus standi, in view of the fact that Shri Parakh has stated in his statement that ball pens were procured from local manufacturers. 19.5 We also note that the Commissioner has admitted that the ball pens with CONCORD brand were not available in the market and as such, the Revenue had gone to the footpath and have purchased the ball point pens at lower rate. In fact, one supplier in Old China Bazar Street agreed to sell the ball pens @ Rs. 25.00 per three dozen, which brings the value of each ball pen much at Rs. 0.70p. It is the Revenue s own case that these ball pens which have been purchased from the market were identical to the ball pens under export and there is no expert opinion showing comparison of the two types of ball pens. If that be so, there is variation in the prices of the ball pens purchased by the Revenue from the different vendors in the market. When such prices vary, how can the same be applied to the pens in question without first comparing the quality and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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