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TMI Blog2007 (2) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant Tex-Age has exported ready-made garments from Nhava Sheva through Port under claim of drawback and DEPB Scheme, which on subsequent intelligence and investigation were found to be highly over-valued and accordingly, Show Cause Notices were issued seeking to redetermine the PMV grossly misdeclared and recovered back the duty drawback sanctioned and paid and to deny the DPEB credit along with proposal for confiscation of goods already exported and imposition of penalties under Section 114(i)and (iii) of the Customs Act, 1962. 3. The Show Cause Notice was based on the evidence in the form of statements recorded from the supplier of fabrics and garments to M/s. Tex-Age and the declarations made by M/s. Tex-Age to Indo-Arab Chamber of Commerce which showed that there was a vast difference between the prices declared to Indo-Arab Chamber of Commerce and the purchase bills found in the possession of the suppliers of the goods and their statements that the goods were highly over invoiced and that there were no written orders, nor any purchase bills were issued, and that the purchase bills were generated only after the investigation by DRI was started. Further, it came to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, no market enquiry was conducted, nor any sample shown to any experts to determine the market value and the entire case is based on the statements of some of the suppliers who have retracted their statements and whose cross examination was not allowed. They refer to the decision of the Tribunal [Order No A-704-713/WZB/2006/CSTB dated 5-5-06 - 2006 (206) E.L.T. 451 (Tribunal)] wherein, in para 7 the Bench has observed that the charge of over valuation is not sustainable in the absence of any satisfactory evidence to establish that local market value was less than the declared value and full FOB value as declared was received by the appellants, and further there was no evidence to show any money laundering. He also referred to the Tribunal decision in Cannon Steel, 2002 (145) E.L.T. 490, wherein the Tribunal has held that the invoice price has to be accepted at market price in the absence of any evidence to discard the same and the best evidence is documents and payments relating to transaction itself. Reference was also made to the decision of the Tribunal in the case of Commissioner of Customs, Kandla v. Dimple Overseas, 2005 (190) E.L.T. 58 in which it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controlled by Satish Choudhary and therefore they cannot be considered to be genuine firms. Visiting cards were found in the residential premises of Satish Choudhary and the office of M/s. Avin Exim Group of Companies of M/s. Mohd. Essa Al Marri Trading Est, Dubai during the raid on which the name of Satish Choudhary was printed who was brother of Subhash Choudhary. Scrutiny of documents recovered during the search of the premises belonging to Subhish Choudhary revealed that there were two sets of invoices in respect of polyester waste in which the purchase invoice showed the value as Rs. 6/-per piece, whereas the unit rate of polyester waste was declared as US $ 2 per piece. Enquiries with Consulate of India, Dubai regarding relationship of Mohd. Essa Al Marri Trading Est, with the subject firms revealed that Satish Choudhary was the owner of the said overseas firm and one Pankaj Jhunjhunwala was the Manager of this firm. The consignments were diverted to Dubai as per direction of Subhash Choudhary. Attention was also invited to the statement of Deepak Khetawat, who in his statement, has stated that though the manufacturing cost of the shirts which he supplied to Subhash Choudhary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Customs Act, 1962. Section 113(i) relates to goods in respect of which any prohibition is in force, while Section 113(iii) relates to any other goods. Therefore, the Commissioner should have given positive findings whether the goods are prohibited goods or not and a joint penalty cannot be imposed. 10. Shri Sesha Gopalan the Ld Advocate, for the appellant Om Prakash Jhunjhunwala submitted that the allegation against Om Prakash Jhunjhunwala was that he was in the knowledge of the fact that Satish Choudhary was arranging remittance of exports through issue of basic travel quota against bogus/stolen passports and he knew that there were no export orders for exports carried out by Tex-Age and that all these exports were made as per direction of Satish Choudhary. He was aware of the fraudulent activities of Subhash Choudhary and have accordingly abetted. It was submitted that Jhunjhunwala was just an employee who was giving blank cheques for signature and he has no role in over invoicing of the goods, if any and therefore no penalty can be imposed on him. 11. We have considered the submissions. We find that prima facie there is evidence against M/s. Tex-Age in respect of ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions made by both sides keeping in view the case law cited in support of their contentions, I am of the view that the applicants have succeeded in establishing a prima facie case and for granting waiver of pre-deposit amount. I record my observations as follows :- I find that in the instant case only the firms of Choudhary brothers and its partners and employees have been made the notices in the Show Cause Notice. None of the persons, who have given statements against the appellant firm or Choudhary brothers and who are not associated as partners or employees, have been charged for abetment, inspite of their statements showing either conscious knowledge of the alleged fraudulent export, or their involvement in generation of huge amount of cash which has been allegedly utilized for arranging remittances. Whereas Shri Prithvi Singh Gulla has been made a notice, for the reasons best known to DRI, but persons like Shri Sheetal Jain and Shri Kamruddin have not been made notices, inspite of the fact that their statements are similar to the statement given by Shri Prithvi Singh Gulla and if their statements were to be relied, they consciously abetted the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he two cases are independent. The valuation and declarations accepted after investigations by DRT in the case of M/s. Vaishnodevi Industries, in similar circumstances would also have to be accepted for the appellant, in view of Section 14 of the Customs Act, 1962 and as well Article 14 of the Constitution which provides for fair and equal treatment in identical circumstances and equality before law. Therefore, it appears that the Show Cause Notice issued is discriminatory in nature. 17. However, I see no reason to discard the primary evidence in the form of the contemporaneous tamperproof EDI records of Customs House, evidencing physical examination of the appellant s exported goods by the proper Customs Officers, specifically when neither the authenticity of the same is in any doubt nor any allegation has been leveled by DRI against any of the several officers of Customs who had on various occasions physically examined the exported consignments to their satisfaction before the grant of Let Export Orders. I find that the appellant has by way of an illustration pointed out that appellant s shipping bill No. 2022149, though bore a remark - This consignment was not opened for physi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd/- (T. Anjaneyulu) Member (Judicial) Dated 8-12-2006 22. [Order per : Ms. Jyoti Balasundaram, Vice-President]. - I have heard both sides. 23. While learned Member (Technical) has held that prima facie evidence of overvaluation of readymade garments by M/s. Tex-Age exists in the form of reply of the supplier of the goods, reply of the Consulate General of India in Netherlands that the firms to which the goods were originally shipped were non-existent, the firms to which the goods were ultimately supplied in Dubai belonged to Satish Chaudhary, brother of Subhash Chaudhary of M/s. Tex-Age, difference in price declared in the invoice and the one declared to the Indo Arab Chamber of Commerce and non-maintenance of purchase bills regarding procurement of the garments and subsequent preparation thereof as per Subhash Chaudhary s directions, learned Member (Judicial) has held that prima facie evidence is not sufficient as statements recorded by the officers have been retracted, invoices recovered from the Indo Arab Chamber of Commerce are not statutory records and, therefore, cannot prevail over the uncontroverted reports of physical examination of the goods under expo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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