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TMI Blog2006 (8) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... emporaneous exports at the proposed value of Rs. 35/- per T-Shirt, the contention of the Revenue cannot be accepted. The value declared before Dubai Customs is not only not relevant, in law, but is also not the basis of the proposed valuation in the show cause notice. The Revenue s submission on date of let export order preceding date of Bill of Lading has no relevance to the determination of FOB value under Section 14 of the Customs Act, 1962. The further submission that the remittance in foreign currency does not relate to export goods is not tenable for the reason that terms of payment for the goods is a contractual obligation between the parties thereto and does not detract from the correctness of the FOB value declared. We, therefore, accept the contention of the exporter that the FOB value has been correctly declared by them and consequent thereto, hold that the goods are not liable to confiscation u/s 113(1), and reject the Revenue s appeal. Whether the determination of the Present Market Value (PMV) of Rs. 35/- per piece by the Commissioner is correct, as against the PMV of Rs. 120/- declared by the exporters and consequently, whether the exporters are entitled fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of Section 125 of the Customs Act, 1962. (b) Ordered that no drawback will be allowed on 1,68,000 pieces of T-shirts, as per Section 76(1)(b) of the Customs Act. (c ) Imposed a penalty of Rs. 1 crore upon the exporter under Section 114 of the Customs Act. (d) Imposed a penalty of Rs. 5,00,000/- each on Shri Nirmal Agarwal, authorised Signatory of the Exporters, Shri A.K. Vadera, Shri Uday Desai and Shri Sunil Verma, Directors of the Exporting Company and Shri Ajay Verma, Signatory of the export documents, under Section 114 of the Customs Act. (e) Imposed a penalty of Rs. 2,00,000/- each on M/s. Able Shipping Agencies Private Limited, Shri Gyan Sharma, Partner of M/s. Vinayak Shipping Agencies, Shri Rasheed Sheik, Manager of M/s. Panorama Express Agencies. (f) Ordered that goods under seizure and yet to be exported are allowed to be exported on payment of redemption fine and penalty but not drawback would be allowed on such exports and that the market price of these goods for the purpose of Section 76(1)(b) shall be wholesale market purchase price of M/s. IPOG International at Tirupur. 2. The case of the Department is that M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods would not exceed Rs. 84/- per piece. The Revenue contends that the Commissioner has over looked the provisions of Section 14(1) of the Customs Act, 1962, while accepting the declared FOB value as the section provides that the value of import or export goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade. Reliance is placed upon the decision of the Hon ble High Court in the case of Bird and Co. (Pvt.) Ltd. v. Kalyan Kumar Sen Gupta, [1988 (37) E.L.T. 70 (Cal.)], wherein it has been held that what has to be taken as the basis of valuation is the price at which such or like goods are ordinarily sold at the time of place of exportation and, not the contract price and to the Apex Court decision in the case of Rajkumar Knitting Mills (P) Ltd. v. Collector of Customs, Bombay - 1998 (98) E.L.T. 292 (S.C.) to the same effect. 5. Further reliance is placed upon by the Revenue on the fact that, in case of goods covered by twelve shipping bills exported against the total declared value of Rs.5.54 crores, val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Cochin [2002 (145) E.L.T. 490 (Tri.)], the Tribunal has held that invoice price has to be accepted as market price in the absence of any evidence to discredit the same, and the best evidence is documents and payments relating to the transaction itself. In the case of Commissioner of Customs, Kandla v. Dimple Overseas [2005 (190) E.L.T. 58)], it was held that since full remittance was received through banking channels, declaration of lower value made at consignee port cannot be a reason to arrive at the charge of having knowledge of under valuation. In the case of Sanjay Kapoor v. Commissioner of Customs [2004 (173) E.L.T. 198 (T)], the charge of mis-declaration of quantity and denial of drawback was set aside as there was no material or market enquiry regarding market value, specially when the foreign buyer had made full payment, which he would not have made if the goods were not of proper quality. 8. The case law relied upon by Shri Mondal to support his plea that receipt of remittance is not a definite indication regarding the correctness of the declared FOB value is distinguishable - In the case of Collector of Customs v. Pankaj V. Sheth [1997 (90) E.L.T. 31 (Cal.)], the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the FOB value. In these circumstances, the market price of Rs. 42/- is above the amount of drawback claimed and, hence, bar under Section 76 (1)(a) of the Customs Act is not attracted against the exporters. Even if the department s claim that the PMV is Rs. 28.53 is correct, drawback of Rs. 35.27 cannot be rejected for the reason that it is well within 150% of the PMV, in terms of the Board s Circular No. 69/97-Cus., dated 8-12-97, para 3(b) of which states that Where the manufacturer-exporter declared PMV which is higher than the AR4 price , the higher PMV declared may be accepted up to 150% of AR4 value. Reliance placed by Shri Mondal on Circular No. 7/2003-Cus., dated 5-2-2003 providing that in cases where it is conclusively proved through verification that the FOB value had been artificially inflated/manipulated by the exporter to avail of unintended higher drawback benefits, the cases shall be investigated and decided on merits in terms of Sections 14 and 113 read with Sections 76(1)(b) and 114 of the Customs Act, 1962, is mis-placed in the present case, for the reason that the material on record does not establish any artificial inflation/manipula-tion of the FOB value ..... 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