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TMI Blog2013 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... crips have been shown to have been used to clear duty free the imported goods, then duty to the said extent short levied shall be recoverable under Section 28(1) of the Customs Act subject to fulfilment of conditions mentioned therein. The FOB value declared by the assessee-company in the shipping bills were not correctly declared inasmuch as amounts paid under heads of FSC, SCC, etc., were not deducted from CIF prices. However, this appears to be on the basis of industry practice as duly noted by the Commissioner. The Customs authorities are competent to issue show-cause notice without challenging the assessment in the shipping bills by issue of show-cause notice as provided under the law - However, the Customs authorities cannot unilaterally alter the amount of DEPB benefit given by DGFT authorities based on export documents relating to exports already made. Such a modification can be done only by referring the matter to the DGFT authorities either to cancel or modify the DEPB scrips - Only when DEPB scrips have been utilised for duty free clearance of imported goods, the Customs authorities can demand under Section 28(1) of the Act, duty short levied/non-levied on such imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order. 2. Heard both sides extensively. 3. The relevant facts in brief, as summarized by the Commissioner in his impugned order are as follows : (a) M/s. DRL are exporting P or P medicaments, etc., to their overseas suppliers under DEPB scheme, through Air Cargo Complex, Hyderabad and ICD, Hyderabad. (b) M/s. DRL entered into contracts with their overseas customers for supply of P or P medicaments on CIF / CIP basis. They also received the purchase orders from some of their overseas suppliers for supply of the P or P medicaments on CIF basis. (c) M/s. DRL are incurring - (i) Weight/Volume charge (whichever is maximum) (ii) Airway Bill Fee (AWB Fee) (iii) PCA (iv) Agent Cartage Charges (A, CIG) (v) Airports Authority of India Charge (Ml) (vi) Misc. charges for carrier (MCC) (vii) Fuel Surcharge of Carrier (FSC) (viii) Security Charge for Carrier (SCC/SEC (ix) Misc. Charge for Agent (MCA), etc., for export of goods by air. The above charges are paid to their freight forwarders basing on the commercial invoices raised by them particularly after export of the goods. (d) Out of the above charges paid to their freight fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hipping bills are not including the charges viz. (i) Bunker Adjustment Factor charge (BAF) (ii) Currency Adjustment Factor charge (CAF) (iii) Congestion Surcharges (iv) Security Surcharge (ISP) (v) Haulage charge (vi) Inter Model Fuel Surcharge (IFS) (vii) Destination Document Fee (DDF) (viii) Port Forwarding Fee (PFF), which are paid to the shipping lines through freight forwarders for carriage of export goods. (k) The charges paid to carriers (Airlines/shipping lines) such as weight/volume charge, ocean freight charges, FSC, SCC/SEC, MCC, BAF, CAF, etc., forms part of freight (transportation charges) and charges paid to agents of carriers such as PCA, Agents cartage charges, (A Ctg), airways bill fee (AWB fee) shall not form part of the freight (Transportation charges) for the purpose of freight to be declared in the shipping bills in respect of export made by air/sea. The various other charges collected by the carriers and agents are shown separately in the shipping bills as total other charges due to carriers and as total other charges due agent . The weight/volume charge and total other charges due to carrier forms part of transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er having exported nearly Rs. 1,411/- crores worth of P or P medicaments during the disputed period and the alleged over valuation in such exports is only to the tune of Rs. 22 crores. The FOB value has been arrived at based on industry practice prevailing all over India. The existence of such practice has been noted by the Commissioner in Para 49 of the impugned order. In view of the above, the allegation of suppression of relevant facts and invocation of extended period of limitation and imposition of penalties are not warranted. (e) Since the shipping bills have been assessed at the time of export, without challenging the assessment order, the Customs authorities cannot reject the declared FOB value and enhance the FOB value. In this connection, following decisions were relied upon : (i) Priya Blue Industries v. CC (Preventive) [2004 (172) E.L.T. 145] (ii) CCE v. Hindustan Gas Inds. Ltd. [2006 (202) E.L.T. 693] (iii) Vittesse Export Import v. CC [2008 (84) RLT 419 = 2008 (224) E.L.T. 241 (Tribunal)] (iv) CC v. Jindal Vijaya Nagar Steel Ltd. [2007 (207) E.L.T. 47] (v) STI India Ltd. v. CCE [2008 (222) E.L.T. 112] (vi) B.R. Export v. CC [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act to demand payment thereof. Relying on the decision of the Hon ble SC in the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi [2003 (155) E.L.T. 423 (S.C.)], he submits that over invoicing of export goods not mentioning true sales consideration of goods would amount to violation of the conditions of the export of the goods involving illegal transaction of foreign currency. In such a situation confiscation of such goods and imposition of penalties are justified. 6.1 We have carefully considered the submissions from both sides and perused the records. 6.2 At the outset, the assessee-company is not contesting the liability to payment of Rs. 19,83,970/- the excess benefit taken by them relating to variation in the actual basic freight and the freight adopted by them in arriving at the FOB value. Therefore, there is no dispute relating to this liability before us in the present proceedings. 6.3 The assessee-company have entered into contract with foreign buyers on CIF/CIP basis. They are required to declare the FOB value of export goods in the shipping bill which is relevant for giving the export benefits, in the present case, DEPB benefit. As clarified by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellants intentionally suppressed the relevant facts with a view to get undue benefit may not be sustainable. 6.6 The submissions on behalf of the appellants that the Customs authority cannot revise value declared in shipping bill without challenging the assessment cannot be accepted. The reliance placed on the decision of the Hon ble Supreme Court in the case of Priya Blue is misplaced. In the said case, the assessee claimed a refund under Section 27 of the Customs Act, 1962 without challenging the correctness of the assessment order. Therefore, Hon ble Supreme Court held that the same is not permissible as the officer considering a refund claim cannot sit in appeal over an assessment made by a competent officer and that the officer considering the refund claim cannot also review an assessment order. Some of the decisions by the Tribunal relied upon by the appellants were to the effect that the department cannot invoke the provisions under Section 28(1) for demand of duty without the department filing appeal against the assessment order. The same cannot be followed in view of the decision of the Hon ble High Court of Madras in the case of Venus Enterprises v. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation in the shipping bill, based on evidence procured during investigation, it is not open to them to modify the contents of DEPB scrips issued by DGFT authority. It is not a case where the Customs authorities referred the matter to the DGFT for cancellation/modification of DEPB scrips issued by the competent authority. Therefore, to conclude that an amount of Rs. 1,10,09,602/- out of Rs. 66,08,62,864/- DEPB scrips issued by DGFT authority was not eligible and only Rs. 64,98,53,263 alone was eligible may not be proper. 7.3 If the scrips have been shown to have been used to clear duty free the imported goods, then duty to the said extent short levied shall be recoverable under Section 28(1) of the Customs Act subject to fulfilment of conditions mentioned therein. The reliance placed on the order of the Hon ble High Court of Andhra Pradesh in the case of Sravani Impex Pvt. Ltd. (supra) is not appropriate. In the said case, the Hon ble High Court considered jurisdiction of Customs authority to issue show-cause notice in a case of DEPB scrips obtained on the basis of fraudulent over invoicing of export goods and bringing overseas remittance through illegal channels. The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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