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TMI Blog2012 (4) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ve. The said show cause notice also sought to impose penalties on the partner of the exporter M/s. Colourtex, M/s. Adani Exports Ltd. and M/s. Padmini Polymers Ltd. All the appellants herein contested the show cause notice on merits before the adjudicating authority. The adjudicating authority did not agree with the contentions raised by the appellants and confirmed that the appellant M/s. Colourtex had overvalued the CD ROMs exported and coming to such a conclusion re-determined and reduced the FOB value and proportionate DEPB credit, he also ordered for confiscation of the CD ROMs, imposed penalty on M/s. Colourtex, Shri Jariwala, M/s. Adani Exports Ltd. and M/s. Padmini Polymers Ltd. Hence these appeals. 3. Learned counsel Shri Uday Joshi, appearing on behalf of the M/s. Colourtex Ltd. submits that the CD ROMs which were exported by the appellant were purchased from M/s. Padmini Polymers Ltd. It is his submission that M/s. Padmini Polymers Ltd. had cleared the said CD ROMs under the cover of AR4s which were purchased by the appellant M/s. Colourtex at a price varying from Rs.600/- to Rs.615/- per piece. It is his submission that at the time of export appellant M/s. Colourtex ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority and more specifically in respect of Circular No.69/97-Cus dated 08.12.97. He would rely upon the judgment of the Tribunal in the following cases: 1. Cannon Steel Pvt. Ltd. - 2002 (145) ELT 490 (Tri. - Del.) 2. Cora Chem - 2002 (146) ELT 718 (Tri. - Mumbai) 3. Polynova Chemical Industries - 2005 (179) ELT 173 (Tri.-Mumbai) 4. Advance Exports - 2007 (218) ELT 39 (Tri.-Ahmd.) He would also rely upon the judgment of the Hon'ble Supreme Court in the case of Suresh Jhunjhunwala - 2006 (224) ELT 497 (S.C.) and more specifically to Para 20 of the said judgment for the proposition that the judgment delivered in the case of drawback will be equally applicable in the case of DEPB scheme also. While submitting up he would submit that the impugned order being an order which has been issued without considering the valid evidences putforth by the appellant M/s. Colourtex and its partner is liable to be set aside and he prays for the same. 4. Shri V.S. Nankani, learned counsel appearing on behalf of M/s. Adani Exports Ltd. would submit that they adopt the submissions made by the counsel of M/s. Colourtex regarding there being no overvaluation involved in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.600/- to Rs.615/- per piece. It is his submission that the export price of M/s. Colourtex was not the genuine export price. He would submit that the show cause notice relies upon the evidences in respect of export of CD ROMs by M/s. Harshita Ltd. purchased from M/s. Padmini Polymers Ltd. and investigation conducted by the United States Customs clearly indicated overvaluation. It is his submission that the procurement of CD ROMs by M/s. Colourtex was from M/s. Padmini Polymers Ltd. as was done by M/s. Harshita Ltd. and hence there is no valid reason as to why the revaluation of sale price of identical CD ROMs at United States by United States Customs be not made basis for determination of export price thereof. He would rely upon the decision of the Tribunal in the case of J.M. Industries - 1989 (39) ELT 109 (Tribunal) which has been maintained by Hon'ble Supreme Court. He would also rely upon the judgment of the Tribunal in the case of Annapurna Yarn Fabrics - 2002 (150) ELT 590 (Tribunal). He would distinguish various case laws submitted by the counsel for the M/s. Colourtex and submits that in the case of advance exports the case has not attained any finality as an appeal fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides and perused the records. 8. The issue involved in this case is whether the main appellant M/s. Colourtex had overvalued the CD ROMs exported by them in order to claim ineligible DEPB benefits. The adjudicating authority has held in the Order-in-Original that it is so by coming to a conclusion which is summarized as under: "That M/s. Colourtex were never in the business of export of CD ROMs or computer related items but the real business was export of dyes, chemicals and polished diamonds and they were entering into business of new products and had not thought over but the profit and loss in such a case of business when it is a case of export of involving crores of rupees and that too from a fresh port as well as through a New Customs House Agent. It is also held by him that appellant M/s. Colourtex were helped in opening of bank account by M/s. Padmini Polymers Ltd. and by M/s. Adani Exports Ltd. He also held that the appellant M/s. Colourtex on receipt of export order from M/s. Wajilam Exports (Singapore) Pvt. Ltd. immediately placed an order of CD ROMs with M/s. Padmini Polymers Ltd. for purchase and export the goods through Custom House Agent whom they have never seen or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laration to be made by them of the present market value on the shipping bills. In this regard, CBEC Circular No.69/97-Cus. dated 08.12.97 needs to be read which is as under: "Attention is invited to Circular No. 15/97-Csu dt. 3.6.97. The instructions contained in Para 3, 4, & 5 of the above Circular, in sofar as they relate to verification of the Present Market Value (PMV) under DEPB Scheme, are hereby superceded by the Guidelines in this Circular :- 1. As you are aware para 7.36A of Public Notice No. 10/97 (P.N.) 97-2002 dt. 21.5.97 provides that the amount of Credit entitlement rate, in respect of export products whose DEPB rate 15% or more, shall not exceed 50% of the PMV of the goods. 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 higher, as per the contract between the exporter and foreign buyer, (depending on various factors), but the "Present Market Value" of the goods is an index of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically assigned to the SUB and not the assessing officer. The enquiry must be completed and final view taken in 30 days. 7. In all case where no Show Cause Notice challenging the declared PMV is issued within 30 days from the date of export, the PMV declared shall be deemed to have been accepted. 8. Under no circumstances will the shipments be stopped/ held back for the above purposes." 10. It can be noted from the above circular that the Board has laid down the guidelines for determination of present market value. We are more concerned with the situation of determination of the present market value which has been clarified in Para 3.b. The said Para 3.b specifically talks about PMV and is up to 150% of AR 4 value no market enquiry requires to be caused but if it is more than 150% of AR 4 price, then market enquiry has to be caused. In this case before us, it can be seen from the records that the invoices which were raised by M/s Padmini Polymers Ltd. were undisputedly for Rs.600/- to Rs.615/- per piece of the CD ROMs purchased by the appellant M/s. Colourtex and declared FOB value was Rs.764/- to Rs.770/- per piece which is well within the accepted norms of 150% or less, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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