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TMI Blog2015 (1) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... ong Kong to Dubai and reduction of declared value before Hong Kong Customs upon detection by them. Added to that, claim of use of gold in making watch components received low weightage by test results of the Government recognized laboratory. Contention of Revenue as to mis-declaration of FOB was established when the appellant M/s. Roche Watches changed its stand on cost of manufacture of watches filing three cost statement on three different dates, i.e., on 31-8-2004, 10-9-2004 and 24-9-2004. Repeated revision of such statements gives rise to the inference that the records of the appellants were not reliable and certificate issued by the Chartered Accountant was false. Misdeclaration of the value of export to Indian Customs was patent from remittance of lower consideration in respect of the goods exported by the appellant M/s. Roche Watches to Dubai and such goods exported therefrom to Hong Kong which remained unrebutted leading cogent evidence to the contrary by appellant. Therefore, even such factor contributes to the inference that higher export value came to India while the past export goods did not command such higher value corroborated by appellant’s own conduct of declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,11,95,555 M/s. Jaipur Time Industries 1-1-2000 to 5-8-2004 9,87,62,865 2,51,03,300 M/s. Rajasthan Watch Manufacturers 1-1-2000 to 5-8-2004 10,52,01,906 2,74,85,687 M/s. India Watch Parts Manufacturers 1-1-2000 to 5-8-2004 8,20,71,770 1,91,49,228 M/s. HMD Exim Pvt. Ltd. 1-1-2000 to 5-8-2004 5,76,25,800 1,59,00,000 M/s. Prakash Sales Agency 1-1-2000 to 5-8-2004 65,56,456/- 19,04,000/- 1.2 In the course of investigation, it came to the notice of the investigating team that the relations of the Directors of M/s. Rochees Watches Pvt. Ltd. in Jaipur were also engaged in the export and import of similar such wrist watches. Samples were taken from the export attempted to be made on 21-8-2004 and market enquiry thereon was conducted. The STF found that the live consignments of 55,000 pieces of Quartz Analog Wrist Watches were attempted to be exported from ICD, Rajisco, Jaipur to M/s. Legend Watch Manufacturing Ltd., London, U.K. on account of M/s. Legend Watch Manufacturing Ltd., Hong Kong. The ICD officials were instructed to draw the representative samples from the consignments covered by shipping bills presented at the ICD. 1.3 Two shipping Bills prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed FOB value ₹ 3,23,17,774/- in respect of 75000 pieces of 'Quartz analog wristwatches' exported vide Shipping Bills Nos. 1002 and 1003 both dated 21-8-2004 from Air Cargo Complex, Jaipur and Shipping Bills Nos. 1023671 to 1023676 all dated 10-1-2005 from ICD (Rajsico), Jaipur by M/s. Rochees Watches Private Limited, Jaipur was rejected and PMV thereof was determined as ₹ 59,75,000/- under Section 14(1) of the Customs Act, 1962 for the purpose of determination of DEPB benefit by the competent authority. (3) 'Quartz analog wrist watches' of which PMV determined as ₹ 14,17,10,591/- (Declared FOB value of ₹ 51,21,17,945/-) under Section 113(d) & (i) of the Customs Act, 1962 I were confiscated. Since the goods were exported and not available for confiscation. Redemption fine of ₹ 6,48,42,000/- (Rupees six crores forty eight lakhs forty two thousand only) was imposed on M/s. Rochees Watches Private Limited, Jaipur, in lieu of confiscation under Section 125 of the Act. (4) 'Quartz analog wristwatches' of which PMV determined as ₹ 15,00,000/- (Declared FOB value of ₹ 87,95,880/-) exported from Air Cargo Complex, Jaipur vide Shipping Bills Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 for the purpose of determination of DEPB benefit by the competent authority. (2) 'Quartz analog wristwatches' of which PMV determined as ₹ 4,11,95,555/- (Declared FOB value of ₹ 15,55,48,124/-) were confiscated under Section 113(d) & (i) of the Customs Act, 1962 and such goods having been exported and not available for confiscation. Redemption fine of ₹ 1,84,51,000/- (Rs. one crore eighty four lakhs fifty one thousand only) was imposed on M/s. Rochi Ram & Sons, Jaipur, in lieu of confiscation under Section 125 of the Act. (3) Penalty of ₹ 4,12,00,000/- (Rupees four crores twelve lakhs only) was imposed on M/s. Rochi Ram & Sons, Jaipur under Section 114(i) & (iii) of the Customs Act, 1962. Appeal No. C/558/2011 M/s. Jaipur Time Industries (1) Declared FOB value ₹ 9,87,62,865/- in respect of 'quartz analogue wristwatches' exported from Air Cargo Complex/ICDs, Jaipur during 1-1-2000 to 5-8-2004 by M/s. Jaipur Time Industries was rejected and the PMV was determined as ₹ 2,51,03,300/- under Section 14(1) of the Customs Act, 1962 for the purpose of determination of DEPB benefit by the competent authority. (2) 'Quartz ana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 962 were confiscated and such goods having been exported and not available for confiscation, Redemption fine of ₹ 1,13,96,000/- (Rupees one crore thirteen lakhs ninety six thousand only) was imposed on M/s. India Watch Parts Manufacturers, Jaipur in lieu of confiscation under Section 125 of the Act. (3) Penalty of ₹ 1,92,00,000/- (Rupees one crore ninety two lakhs only) was imposed on M/s. India Watch Parts Manufacturers, Jaipur under Section 114(1) & (iii) of the Customs Act, 1962. Customs Appeal No. C/560/2011 M/s. HMD Exim Pvt. Ltd. (1) Declared FOB value ₹ 5,76,25,800/- in respect of 'Quartz analog wristwatches' exported from Air Cargo Complex/ICDs, Jaipur during 1-1-2000 to 5-8-2004 by, Jaipur was rejected and PMV was determined as ₹ 1,59,00,000/- under Section 14(1) of the Customs Act, 1962 for the purpose of determination of DEPB benefit by the competent authority. (2) 'Quartz analog wristwatches' of which PMV determined as ₹ 1,59,00,000/- (Declared FOB value of ₹ 5,76,25,800/-) were confiscated under Section 113(d) &, (i) of the Customs Act, 1962 and such goods having been exported and not available for confiscation. Redemption fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mangli Impex case in W.P. (C) No. 441 of 2013, Shri K.K. Anand, ld. Advocate appearing on behalf of exporter appellants in Appeal Nos. C/244-60/2011 and Appeal Nos. C/544-547/2011 and C/556-561/2011 (at Sl. Nos. 55 to 69 of cause list of 17-7-2014), suggested that the exporter appellants in S/544-547 & 556 to 561/2011-CU(DB) may be heard first to save time of the Court since exporter appellants have not raised jurisdiction issue and the cases of importers have also no bearing on the cases of exporters in these appeals. Revenue having no objection to such proposition, hearing proceeded and day-to-day proceedings were recorded in the open court and copies thereof given to both sides. 2.2 Preliminary enquiry was made from Shri K.K. Anand, learned Advocate as to what was the allegation of Revenue against the exporter appellants. He explained that exports of different types of watches made during the period 1-1-2000 to 5-8-2004 are alleged to have been overvalued making undue claim of DEPB benefit of ₹ 13.18 crores and that is not admissible to the appellant. Similarly such allegation is also made in respect of 8 live shipping bills as depicted in the Table herein before. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that 2 Panchnamas were prepared. One was for goods seized at Air Cargo Station and the other was in respect of the goods seized at the ICD, Jaipur. Copies thereof were given to appellants. But ld. Counsel stated that such copies were not given to the appellant prior to hearing the appeal by Tribunal. Ld. DR further explained that the envelope contained samples of goods seized at Air Cargo covered by Shipping Bill Nos. 1002 and 1003 both dated 21-8-2004 meant for market enquiry and appellant was aware of such fact. Hence, the sample drawn at both places cannot be questioned by the appellant nor market enquiry assailable. But ld. Counsel objected to such practice on the ground that appellants were also entitled to have a set of samples with description thereof for their future reference and guidance. Without that there was a violation of Principles of natural justice. 2.7 Placing reliance on page 10 of the volume 1 of paper book, ld. Counsel argued that watch samples were sent to "H.C. Brothers" to ascertain market value thereof. But that concern was not trader of watches. Hence, market value suggested by that concern is not acceptable to law. The reference made to that conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof was on Revenue to show that the goods meant for examination were done in accordance with law. But, Revenue failed to discharge such burden for which the result of enquiry became inadmissible in evidence. 2.11 It was further submitted on behalf of the appellant that pages 262, 263, 265, 266 and 267 of volume 2 of the paper book shows summarily how market enquiry suffered from legal infirmity. 1. Model no. of the watch not given. 2. Value arrived was not on the basis of the part used therein like movement. 3. Neither appellant nor authorised representative of appellant of Revenue were present in the course of examination. 4. Cross-examination of the examiner and officers engaged in examination was denied. 5. Report issued by Titan does not disclose the manner of examination conducted. 6. Samples tested did not corroborate with the samples taken at the time of seizure. 2.12 Revenue represented by Shri Amresh Jain, preliminary submitted that all the export consignments were covered by DEPB claim. When cost construction of goods exported was worked out, that revealed over-valuation thereof was proved. Cost of manufacture shown by appellant was very high an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue to be ₹ 100/- to ₹ 150/-. The trade association in Delhi revealed the market value would be ₹ 40/- to ₹ 85/-. M/s. Titan Industries replied that the value to be ₹ 100/- to ₹ 125/-. (vi) None of the watches exported were of any high value to support the claim of overvaluation made by the manufacturer. 10% of the manufactured goods were sold domestically and balance were exported. The 10% sale related to the model "Roche". But export models were "Genera", "Yasoda" "Rivera" and "Star", etc. (vii) Overseas enquiries revealed that there was declaration of very low value of export to Dubai and London and Hong Kong. (viii) The mis-declaration of the value made by the appellant was the modus operandi to claim higher duty draw back ranging 18%, 16%, 13% and 10% at relevant point of time. (ix) It was convenient for the exporter manufacturer M/s. Rochees Watches Pvt. Ltd. to make a mis-declaration because the importers in Dubai, London and Hong Kong were related persons of Shri Ishwar Das Moolrajani and Shri Nanak Das Moolrajani, who were the Directors of the appellant-company as above. (x) Some of the goods, which were sent to Spain, establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over DEPB. 4.2 Placing Circular No. 69/97-Cus., dated 8-12-1997 and No. 27/2008-Cus., dated 5-4-2000, it was emphatically submitted on behalf of the appellant that Present Market Value (PMV) need not be verified where value Cap is prescribed for the obvious reason that any DEPB claim over and above value Cap is in admissible. He further submitted that till date, DGFT has not initiated any proceeding against the appellants alleging erroneous DEPB claim. Therefore, no proceeding by Customs can be initiated. 4.3 Relying on para 4 of the decision in the case of Adani Export Limited v. ACC, Cochin - 2006 (199) E.L.T. 613 (Tri.-BNG) it was submitted that when DGFT has no objection to the DEPB claim of the appellant, adjudication is unsustainable. He further relied on the decision in the case of Rammapati Exports v. CC (Kol.) - 2006 (203) E.L.T. 107 (Tri.-Kol.), to submit that DGFT is the only authority to grant export incentive. Inviting attention to page 910 of the volume 4 of the paper book exhibiting, para 55.5 of show cause notice, it was that in absence of provision in Customs law, the Customs Authority has even no power to reduce the DEPB claim and direct recovery there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher FOB. 5.3 Use of gold in the watch components meant for export was further explained by appellant stating that when an inventory was made on 14-9-2004 (Ref : Annex-A to the Panchnama drawn specifically) that exhibited that gold plated watches were inventorised by the investigating team. Page 122 of volume 1 of paper book explains this position. Therefore, revenue cannot doubt use of gold for Acid touch in the watch components. During course of inventory made on 14-9-2004, certain samples of watch cases were kept in open cover to send for testing. Sealing procedure was not followed. Once such procedure is not followed, the test report obtained by Revenue becomes unreliable. For no cross examination allowed, the test result cannot be used against appellant. 6. It was further submission of the appellants that Customs has no power to determine cost of manufacture to arrive at the FOB. This was held in C.C., Kandla v. Crown International - 2006 (203) E.L.T. 120 (Tri.-Mum.). Similarly the cost of manufacture has no relevance for the purpose of Section 14 of Customs Act, 1962. The only fact necessary is to examine whether transaction value was rightly declared. Selling pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equence. But that was not done. Abruptly Rule 10 of the said Valuation Rules was applied. Such arbitrary application was illegal. Ld. Authority neither rejected transaction value nor applied Rules 5, 6, 7 & 8 of Valuation Rules sequentially to pass order in accordance with law. 8.2 According to the appellants, when FOB values were realized, PMV is not questionable since FOB is transaction value which was duly verified by customs authorities at the time of export of goods without questioning. Customs Authorities made 29 provisional assessments and found nothing contrary to law for which 28 provisional assessments were finalized unquestionably. However, in one case DEPB was reduced which is verifiable from page 690 of volume-III of paper book. Page 649 onwards of volume-III of the paper book brings out the case of provisional assessment. Page 64 of volume-III establishes full proof case of verification of PMV to finalize provisional assessment. Appellants reiterated that FOB and PMV are not one and the same relying on (para Nos. 6, 7, 9 and 16) of the decision of Tribunal in the case of Frost International Ltd. v. CC (Exports) - 2006 (206) E.L.T. 451 (Tri.-Mum.) in this regard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 28 is not applicable to the present case. He explained that Section 14(1) of Customs Act, 1962 was invoked in adjudication without proposal in that regard in the show cause notice which is foundation for adjudication. Therefore, adjudication made without allegation in the show cause notice is bad. He relies on the following decision for such proposition :- (1) CCE, Nagpur v. Ballapur Industries Ltd. - 2007 (215) E.L.T. 489 (S.C.) (Para 21) (2) CC, Mumbai v. Toyo Engineering India Ltd. - 2006 (201) E.L.T. 513 (S.C.) (para 16) (3) CCE v. Gas Authority of India Ltd. - 2008 (232) E.L.T. 7 (S.C.) (paras 7 & 8) 9.2 To argue that evidence gathered for clearance of live consignments cannot be applied to past consignments, appellant relied on decision of Apex Court in the case of Oudh Sugar Mills Ltd. v. Union of India - 1978 (2) E.L.T. (J 172) (S.C.). Further, reliance was placed on the decision in the case of State of Kerala v. C - 1966 62 ITR 236 (paras 10 & 11) of volume-II of paper book page nos. 370-373 to support the contention that there cannot be presumption when all facts and circumstances of each case are different. Presumption of existence of similar factual situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the watch components. 11.3 It was further submitted that by the appellant that once use of gold remained unrebutted by Revenue without leading contrary evidence and manufacturing account showed use of gold in the watch components, financial statements were reliable. Reliance was placed on the decision of Gujarat High Court in CC, Daman v. Narendra Impex - 2011 (265) E.L.T. 332 (Guj.) in this regard. 12. When realisation of entire FOB, purchase of gold and use thereof remained unquestioned, books of accounts of appellants were reliable. Therefore, Revenue's contention that FOB value was inflated is baseless. Paper book 12 contains financial statement disclosing purchase, sale of gold and stock maintained. That was un-rebutted by revenue. Law is settled that declaration before one authority under one statute cannot be challenged by another authority under different statute. When books of accounts were audited by chartered accountant and report thereon submitted, figures were conclusive. That cannot be challenged by the Customs authorities without finding any discrepancy or material irregularity in the figures. Appellants relied on the decision in the case of ITC Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h v. Hari Concast P. Ltd. - 2009 (242) E.L.T. 12 (P&H), CCE & C, Vadodara-II v. Orbit Fabrics Ltd. - 2011 (264) E.L.T. 53 (Guj.). It was also submitted that once assessment is finalized that cannot be reopened. Such principle is repeatedly followed by Tribunal in the case of CC (Imports), Mumbai v. Lord Shiva Overseas - 2005 (181) E.L.T. 213 (Tri.-Mum.) and in the case of Vittesse Export Import v. CC (EP), Mumbai - 2008 (224) E.L.T. 241 (Tri.-Mum.). 15. On the point of confiscation, it was submitted that past consignments are not confiscable since such consignments were cleared without any bond or bank guarantee. Appellant relied on the Larger Bench decision of the Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. v. CCE & C, Nasik - 2009 (235) E.L.T. 623 (Tri.-LB) and judgment of High Court of Punjab and Haryana in the case of Raja Impex Pvt. Ltd. - 2008 (229) E.L.T. 185 (P&H) in this regard. Ld. Counsel further submitted that ratio of these decisions was that when goods were not cleared against bond and bank guarantee and such goods not available for confiscation shall not be confiscated. 16. So far as imposition of penalty under Section 113(d) of Customs Act, 1962 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proved by Revenue without discharging burden of proof as it has been held in para 15 in the case of Mirah Exports Pvt. Ltd. v. Collector of Customs [1998 (98) E.L.T. 3 (S.C.)]. 17.4 Appellants further submitted that the allegation of inflation of FOB value has no basis for the reason that similar watches sold domestically fetched similar value as per price list submitted by appellants to Excise Authorities. Such goods being liable to duty under Section 4A of Central Excise Act, 1944 and Excise Authorities did not disturb the declared MRP. Therefore, when such value was rightly adopted for FOB, there cannot be further scope to disturb the FOB declared. Appellants having used gold components in the watches and submitted the price list to declare MRP to the authority and paid higher excise duty, the value so declared became transaction value which cannot be discarded. Since the value received from domestic sale remained unquestioned. That was also well explained in the statements recorded in clause 108 of Customs Act, 1962. Such value was reliable to be adopted as a FOB value. 17.5 Appellants also urged that Revenue's allegation that there was no domestic sale without an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of Section 50 of the Act. Therefore, conjoint reading of Section 2(2), Section 2(41), Section 14 and Section 50 of the Act throws light that even exports and imports are assessed in terms of value thereof irrespective of duty liability thereof. Therefore, an exporter is required to declare value of export truthfully for the purpose of assessment under Section 2(2) of the Act for "let export" order under Section 50 thereof. Such an interpretation of law follows from para 14 of the judgment of Supreme Court in the case of Om Prakash Bhatia v. CC, Delhi [2003 (155) E.L.T. 423 (S.C.)]. He further emphasized that the case of the appellant falls under para 16(d) of the judgment for a fair determination of FOB under Section 14(1). 21.2 According to ld. DR, export consideration received may or may not be relevant to determine FOB value of export or import by Customs Authority. Overvaluation of export is made for the purpose of money-laundering and such transaction are illegal under law. Modality of valuation of goods is stated in the judgment in para 3 at page 2 and following the law laid down in the case of Om Prakash Bhatia judgment (supra). Adjudicating authority has theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xxx) of the SCN, it was argued by ld. DR that false evidence were created to show that domestic sale price was followed to show that FOB of watches exported was same as PMV while cost sheet was manipulated to show high cost. False and fabricated documents were created by appellants to show as if there were domestic sales when there was no such actual sale made. Shri Nanak Das on 8-9-2004 stated that there was use of gold. But that was false. Cost sheets of all 3 dates were fabricated which is established from para 12 (iii) of SCN at page 10 (Ref : page 849 of volume-IV of paper book) thereof. 24. Reliance on the statements appearing in paras 11 and 15 of SCN (Ref : pages 842-851 of volume-IV of paper book) was made by ld. DR to submit that (1) neither in past exports nor in live consignments, gold was used; (2) cost sheets were fabricated and statements recorded were incriminating in nature; (3) cost of manufacture was very low without use of gold; and (4) contradictory statements were given by the parties to divert attention of Investigation. All such factors contribute to the questionable modus operandi of appellants. 25.1 Placing reliance on cost sheet dated 31-8-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N. Placing further reliance on para 36 of SCN (ref. page 871 of volume-IV of paper book), ld. DR says that part of samples drawn on 14-9-2004 were sent to the Department of Meteorological, Malvia Institute of Technology, Jaipur. That institute also reported on 1-11-2004 that minor quantity of gold was used in the watches meant for domestic sale. 26.2 Ld. DR submitted that sample of past consignment was lying with Revenue. That is revealed from Para 32 at page 28 of SCN. Samples drawn as is apparent from para 32 of SCN shows no use of gold which was confirmed by Shri Ishwar Das in his statement. This statement was again corroborated from para 32 of SCN proving no use thereof and plea of use of gold was to manipulate the cost of figures to show that to be high in order to make higher DEPB claim. Even page 862 of volume-4 of paper book proved that cost data furnished by appellant was arbitrary and without evidence. This is established from para 28 of SCN of volume-4. When investigation proceeded to analyze cost of components used in the watches as is exhibited by pages 872-880 of the paper book No. 4 and detailed analysis was done in para 45 of Order-in-Original, it revealed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from para 47 of SCN (ref : page 882 of Volume-4 of paper book). In terms of para 50 of SCN, the report received from Second Secretary (Trade), High Commission of India, London, by his letter dated 11-2-2005, showed wide variance between FOB declared by the appellant to the Indian Customs and the value declared to England Customs. Very low value was declared thereat while high value was declared to Indian Customs. Similarly, mis-declaration in the same manner was made to Spanish authorities. The declaration to the customs authorities abroad were 10 times lower than the value declared to the Indian Customs. Low export value declared to Spain Customs had gone to Dubai in respect of same goods which were exported by the appellant to Dubai. This comes out from the letter dated 13-9-2005 of the High Commission of India in London. 28.2 Para 50.2 of the SCN reveals that DRI made further investigation with Dubai Customs. That authority by letter dated 19-9-2005 informed DRI that the value declared to Dubai Customs was 10 times lower than the value declared to Indian Customs. All such facts appear in para 50.2 of SCN. Inviting attention to para 50.3, ld. DR submitted that by letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Cost sheet filed by merchant-exporter was replica of cost sheet filed by the manufacturer exporter appellant. Relation of parties was brought to the knowledge of the appellants in para 26(xii) of SCN (ref : pages 858-859 of paper book Volume-4 of the paper book) for defence. 30. Ld. DR further submitted that when the goods were found to be mis-declared, following the decision in the case of Om Prakash Bhatia v. CC, Delhi [2003 (155) E.L.T. 423 (S.C.)], Section 113(1) of the Customs Act, 1952 was applied. Shipping bill has to truthfully declare proper FOB or Prevailing Market Value (PMV) as the case may be under Export (Form) Regulations, 1991 as has been observed in para 15 of the judgment in the case of Om Prakash Bhatia v. CC, Delhi (supra). 31. It was also submitted by Revenue that a mere non-mentioning of the provision in show cause notice does not vitiate the proceedings following the ratio laid down by the Hon'ble Apex Court in the case of Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd. [1996 (82) E.L.T. 441 (S.C.)]. Revenue further relied on the decision of Hon'ble High Court of Andhra Pradesh in para 47 in the case of Sravani Impex P. Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared wherever that is applicable. PMV was not required to be declared in the shipping bill. Therefore, there was no mis-declaration. Appellant also submitted that assessment of shipping bills is conclusion of the entire declaration and that became final. Therefore, there cannot be re-opening of the matters relating to shipping bills so concluded. 36. Appellants also submitted that export period covered four years and seven months. During such a long period nothing against the appellant was found and assessments having been concluded, there cannot be any doubt of mis-declaration. 37. On the issue of overseas enquiries, it was submitted that 54 import declarations given by importers of Dubai does not bind the appellants to disturb its FOB declared to the Indian Customs. Those documents not being authenticated nor backed by evidence cannot be used against the appellant. Mistake reported by Hong Kong Customs having been rectified, there is no basis to discard the FOB declared by appellant to Hong Kong Customs (ref : page 764 of Volume-3 of paper book). Page 768 of Volume-3 of paper book supports appellants' declaration in other transactions made to Hong Kong Customs. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandates that such authorities have jurisdiction to assess value of goods meant for export in terms of Sections 2(2), 14, 50 and 51 of the Act to pass "let export" order. As soon as the goods meant for export reaches customs station, jurisdiction of Proper Officer begins. Assessment in terms of above sections is prerequisite to issue "let export" order under Section 51 of the Act. In order to complete the exercise of issuing "let export" order, the document that is examined by the proper officer is the Shipping Bill under Section 50 of the Act. Section 50 operates as soon as the goods enter into the stream of export. Section 50 reads as under : "Entry of goods for exportation. - (1) The exporter of any goods shall make entry thereof by presenting electronically to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. Provided that the Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically, allow an entry to be presented in any other manner. (2) The exporter of any goods, while presenting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section : Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do. It may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the purposes of this section - (a) "rate of exchange" means the rate of exchange - (i) determined by the Board, or (ii) ascertained in such manner as the Board may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign Exchange Regulation Act, 1973 (46 of 1973), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Economic Affairs ) No. GSR 2641, dated the 14th November, 1969, the Central Government hereby prohibits the export otherwise than by post, of all goods, either directly or indirectly, to any place outside India. Other than Nepal and Bhutan, 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 :- (i) the full export value of the goods, or (ii) if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions express to receive on the sale of the goods in the overseas market, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed manner". 13. Apart from the aforesaid provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no scope of application of Section 14 for determining the value of goods by applying the criteria laid down in the said Section. In our view, this submission cannot be accepted. For determining the export value of the goods, we have to refer to the meaning of the word 'value' given in Section 2(41) of the Act, which specifically provides that value in relation to any goods means the value thereof determined in accordance with the provisions of sub-section (1) of Section 14. Therefore, if the export value of the goods is to be determined, then even if no duty is leviable, the method (mode) for determining the value of the goods provided under Section 14 is required to be followed. Section 14 specifically provides that in case of assessing the value for the purpose of export, value is to be determined at the price at which such or like goods are ordinarily sold or offered for sale at the place of exportation in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale. No doubt. Section 14 would be applicable for determining the value of the goods for the purpose of tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erseas enquiry result was challenged by the appellants only on the ground that the accompanying documents to the report were not authenticated and also the enquiring authority became adjudicating authority later. But truth of declaration of low value to the Customs of those countries could not be repelled leading any cogent evidence to the contrary by appellants. Revenue discharged its burden of proof making allegation of mis-declaration relying on evidence gathered from abroad and also basing on various other contributory factors as well as on the basis of remittance came from Hong Kong to Dubai and reduction of declared value before Hong Kong Customs upon detection by them. Added to that, claim of use of gold in making watch components received low weightage by test results of the Government recognized laboratory. 43.2 Contention of Revenue as to mis-declaration of FOB was established when the appellant M/s. Roche Watches changed its stand on cost of manufacture of watches filing three cost statement on three different dates, i.e., on 31-8-2004, 10-9-2004 and 24-9-2004. Repeated revision of such statements gives rise to the inference that the records of the appellants were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1988 Valuation Rules has to be adopted to determine the value of goods entered for exports irrespective of the fact whether any duty is leviable or not. It has also been held therein that the price received by the exporter in the ordinary course of business, shall be taken to be transaction value for determination of value of goods under export, in business of any special circumstances indicated under Section 14(1) of the Act read with Rule 4(2) of 1988 Valuation Rules. The said para 16 of the judgment is reproduced below for reference : "16. It is settled that the procedure prescribed under Section 14(1) of the Act and particularized in Rule 4 of the 1988 Rules has to be adopted to determine the value of goods entered for exports, irrespective of the fact whether any duty is leviable or not. It is also trite that ordinarily, the price received by the exporter in the ordinary course of business shall be taken to be the transaction value for determination of value of goods under export, in absence of any special circumstances indicated under Section 14(1) of the Act and Rule 4(2) of the 1988 Rules. The initial burden to establish that the value mentioned by the exporter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by proceeding sequentially through Rules 5 to 8 of the 1988 Rules. (See : Commissioner of Customs, Mumbai v. Bureau Veritas & Ors. [(2005) 3 S.C.C. 265 = 2005 (181) E.L.T. 3 (S.C.)] and Eicher Tractors Ltd. (supra). Rule 5 allows for the transaction value to be computed on the basis of identical goods imported into at the same time whereas Rule 6 provides for the computation of transaction value on the basis of the value of similar goods imported into India at the same time as the subject goods. In the absence of contemporaneous imports into India, the value is to be determined under Rule 7 on the basis of a process of deduction contemplated therein. If this is not possible, then recourse must be had to Rule 7A, and if none of these methods can be employed to compute the transaction value, Rule 8 provides that the transaction value can be determined by using reasonable means consistent with the principles and general provisions of these Rules and sub-section (1) of Section 14 of the Act and on the basis of data available In India." [Emph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, their orders cannot be sustained." [Emphasis supplied] 49. The Manufacturer exporter appellant themselves made various contradictory statements relating to use of gold and also cost statements were revised by M/s. Roche Watches. Similarly, the Chartered Accountant deposed against the manufacturer-appellant as has been argued by Revenue which remained uncontroverted by the manufacturer-appellant leading cogent evidence to the contrary. Thus valuation done by the exporters became questionable warranting revaluation under Section 14 read with the provisions contained 1988 Valuation Rules as has been held by Apex Court in the aforesaid citations. Therefore, learned adjudicating authority granting fair opportunity to the appellant shall re-determine the value of the export both in respect of past and live consignment cases except the 29 provisional assessment cases. That shall serve interest of justice. 50. Of course, 29 Shipping Bills of the appellant manufacturer M/s. Roche Watches in the past were subject to provisional ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Institute. 53. Variations in the Cost Statements, unreliability of the books of accounts and specific statement of directors of the manufacturer-appellant as to no use of gold in making watch components, preponderance of probability demonstrated mis-declaration of the value of export in the past and through live consignments. Therefore, all exports (both past and live consignments) to extent aforesaid are liable to valuation in terms of law laid down by the judgment of the Apex Court in Siddachalam Exports Pvt. Ltd. (supra). 54. Manufacturer exporter appellant's contention that the market enquiry done by the Revenue was unwarranted in view of value cap prescribed and cross-examination of the examiner as well as the Officers not allowed need not be addressed at this stage since valuation of past and live consignments are to be valued in the manner as has been held by the Apex Court in the case of Siddachalam Exports Pvt. Ltd. v. Commissioner of Central Excise, Delhi-III reported in 2011 (267) E.L.T. 3 (S.C.) and market enquiry is the last resort. If the data of contemporaneous exports of identical goods is not available, the procedure laid down in Rules 5 to 8 of the Val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the period 1-1-2000 to 5-8-2004 and even thereafter by live consignments. Show cause notice was issued on 30-11-2008 and learned adjudicating authority completed adjudication on 30th September, 2009. There is nothing found wrong on the action of the learned adjudicating authority as to lapse of time. A case of overvaluation should not be sanctioned on the plea of time bar. Therefore, such a plea is rejected. It was also the contention of the appellant that there cannot be market enquiry beyond certain period prescribed by the Board's circular. Present case is a case where value of the export is to be determined in accordance with Valuation Rules, 1988 and that has been directed by this order to be carried. 59. Appellant argued that the adjudication is time-barred on the ground that there is no time-limit prescribed in law to determine FOB for grant of DEPB and it's judicially settled that reasonable period of three years may be considered as limitation for the completion of adjudication. But the facts of the case suggest that there is overvaluation of FOB during the period 1-1-2000 to 5-8-2004 and even thereafter by live consignments. Show cause notice was issued on 31- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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