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TMI Blog2019 (9) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... shipping Bill Nos.2182201 & 2178314 both dated 20.02.2019 for export of the goods declared as Multiple purpose Split Pin Top Quality with HSN Code 87089900 for a total quantity of 5,00,000 pieces with unit price as 0.26/USD with a total consideration of USD 130000 (FOB) for shipment to the overseas buyer, viz., MWI TRADING FZE, AJMAN, UAE, based on the purchase order dated 01.02.2019 placed on the petitioner by the above said overseas buyer, with the payment condition fixed as FOB Terms 180 days post shipment, which was accordingly agreed by the overseas buyer. b) The petitioner, on receipt of the purchase order placed by the overseas buyer, locally procured the goods meant for export from one M/s.Radhika Trading Co., Delhi, on certain terms and conditions agreed upon between them towards the payment of sale consideration. Accordingly, the goods meant for export was dispatched from Delhi to Chennai with all the export documents along with the E-Way Bill dated 19.02.2019 and the same reached Chennai on 20.02.2019. After filing the said two free shipping bills, the subject goods meant for export was physically examined by the Officer of the customs and found the same to be as decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was overvalued, when compared with similar item available in the market. The classification of the subject goods is incorrect. The subject goods are multipurpose split pin and should be classified under CTH 7318 (73182400). Hence, there is a misclassification of CTH. The value of the subject items were declared as at 0.26$ per piece but the estimated vlaue of the cargo as per the Indian market is found to be around Rs. 75/- per Kg. On conversion of declared value of the said item from US dollar into Indian Rupees, it works out to Rs. 46,11,750/- (per B/E) whereas the Indian market price for the same works out to Rs. 10,125/- (per B/E). Hence, the cargo has been overvalued in both the shipping bills wherein it is also shown that IGST amount was paid by the exporter at Rs. 12,91,290/- each. On reasonable suspicion, the above mentioned consignments were detained on 21.02.2019 for further investigation. b) The subject matter shipping bills are free bills only and not eligible for drawback. Further, under CTH 7318, the IGST is 18% only whereas under CTH 8708, it is 28% and thus, the exporter is intending to claim higher rate of IGST refund. Summons were issued to the concerned, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the same will be paid only after realizing foreign exchange from the buyer. In support of his contention, the learned counsel relied on a decision of this Court made in 2017 (348) E.L.T. 612 (Mad), J.K.Exim vs Principal Commissioner of Customs. 5. On the other hand, the learned counsel for the respondents, after reiterating the contentions raised in the counter affidavit, submitted that the petitioner filed bogus bills and did not file any return showing the payment of IGST in respect of the purchase of goods from its sellers. Therefore, the petitioner, in order to claim higher rate of IGST refund, overvalued the cargo. Learned Standing Counsel relied on the Circular No.01/11-Customs dated 04.01.2011, in support of his contention that apart from executing a bond, the petitioner is also liable to furnish appropriate security in order to cover the redemption fine and penalty. 6. Heard both sides. Perused the materials placed before this Court. 7. The petitioner is engaged in the business of import and export. They filed two free shipping bill numbers 2182201 and 2178314 both dated 20.02.2019 for export of the goods declared as Multipurpose Split Pin Top Quality with HSN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject matter goods itself is wrong and consequently, the rate of IGST refundable to the exporter also varies. As already stated supra, as per the claim made by the petitioner based on their classification, they are entitled to refund of 28% IGST whereas according to the Revenue, it is only 18%, as the subject matter goods are classified under different CTH. This Court, at this stage, is not going to express any view on the merits of the above contentions raised by the respective parties, since admittedly the adjudication proceedings is yet to take place. However, in the meantime, as the petitioner is intending to export the goods and consequently, sought for release of the same for export, only issue that is to be gone into and decided in this case as to whether the conditions imposed by the customs for releasing the goods for export are onerous or justifiable. 10. Circular No.1/2011-Customs dated 04th January 2011 issued by the Central Board of Excise and Customs contemplates at paragraph No.4(a) as follows: "In case the export goods are found to be misdeclared in terms of quantity, value and description and are seized for being liable to confiscation under the Customs Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on the allegation of misdeclaration, overvaluation and also on the reasonable apprehension that the exporter would claim higher rate of IGST refund, as discussed supra. In such circumstances, even before completing the adjudication process, if the exporter seeks for release of the goods for export, certainly it is for them to comply with the conditions imposed in the impugned order. In this case, in fact, the customs has not refused to release the goods. On the other hand, provisional release is ordered subject to the execution of bond and furnishing of bank guarantee. 15. Going by the facts and circumstances, I find that the conditions are not onerous and therefore, if the petitioner intends to export the goods, it is for them to safeguard the interest of the Revenue by providing the bond and appropriate security in order to cover the redemption fine and penalty as stated in the above circulars. Needless to say that if the petitioner furnishes bank guarantee and ultimately succeeds in the adjudication process, it is always open to them to get the bank guarantee released. After all, it is only to safeguard and secure the interest of the Revenue, the bank guarantee is sought t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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