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TMI Blog2013 (12) TMI 1700X X X X Extracts X X X X X X X X Extracts X X X X ..... ding inasmuch as the same were of 15 length as against the requisite length of 2 mts. As such, the same cannot be used for intended purpose. The value of the same was found to be much on the lower side. 3. Based upon the above investigation, the show cause notice was issued to the appellant for reducing the value of the declared goods and to decide the DEPB claim accordingly. It is seen that Shri Surinder Singh Chandhok, proprietor of the appellant, vide his letter dated 30-1-2006 addressed to the Superintendent SSI, Faridabad requested as under : Since the goods are in your custody, we request that the same may be got examined and market verification may be made to ascertain the export price and the matter may be decided and export may be allowed. 4. Commissioner has observed that it was the noticee who had asked the department for examination of the goods and market enquiries. As such, by taking into account the result of the market inquiries, he hold that total value of all three consignments was to the tune of ₹ 11,000/-. He accordingly confiscated the goods and gave an option to redeem the same on payment of redemption fine of ₹ 5,000/-. In addition, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Product Group 62 is available to the appellant. (ii) The goods were confiscated and option to redeem the goods on payment of redemption fine of ₹ 5,000/- against each of the three shipping bill No. 1039370, dated 19-12-2005, 1039369, dated 19-12-2005 and 1039371, dated 19-12-2005 was given. (iii) The penalty of ₹ 47,19,680/- (shipping bill No. 039370, dated 19-12-2005), ₹ 46,92,240/- (shipping bill No. 1039369, dated 19-12-2005) and ₹ 46,64,800/- (shipping bill No. 1039371, dated 19-12-2005) totalling to ₹ 1,40,76,720/- has been imposed. 11. In this case, adjudication finding was that the appellant inflated value of consignment attempted to be exported to claim higher DEPB benefit while the goods were of sub-standard quality and were not fit to be part of any car. The exporters declared value of the goods was found to be between ₹ 666 to ₹ 674 per set on which DEPB credit claimed to be ₹ 53 per set approximately. On examination the goods were found to be pack in a set of 2 pcs and unit price was appearing to be on higher side. The exporter proposed to reduce the value by 40% to 50% for DEPB purpose vide their letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the relevant facts, evidence, investigation outcome and adjudication findings as well as intention of the appellant behind attempted export with the argument made on behalf of the appellant on the only ground of reduction of penalty without rebuttal of evidence collected by investigation and adjudication findings. Investigation unmistakably proved deliberate attempted export of rubber scrap/unserviceable non-exportable rubber products to make higher DEPB claim. It clearly comes out from the records that the items for export i.e. metal fitted/bonded/unbonded rubber part-door beading were attempted to be exported vide 3 shipping bills on 19-12-2005 whose FOB value of ₹ 1,40,76,720/- to claim of DEPB to the extent of ₹ 11,26,137/-. Investigation clearly brought out that there was fraudulent attempt by the appellant to export Door Beading inasmuch as the same were 15 length as against the required length of 2 metres. The goods attempted to be exported could not be used for intended purpose. Only purpose of misdeclaration of value and length of door beading was to earn higher DEPB benefit. There was intention to defraud the Revenue to claim higher DEPB benefit by over val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he redemption fine as also the penalty to 20% and 5% respectively. We find that the said order passed by the Tribunal is arbitrary and whimsical, for no reasons have been recorded specifically as to why in these particular cases it should be reduced to 20% and 5% and determination of quantum to be paid as redemption fine and penalty should be dependent on the facts and circumstances of each case. In the case of Commissioner of Customs (Import) v. Stoneman Marble Industries, reported in 2011 (264) E.L.T. 3 (S.C.), it was held by this court that a standard formula cannot be laid down for imposition of redemption fine and penalty. 21. At this stage, we may also appropriately refer to a three Judges Bench decision of this Court in Jain Exports Pvt. Ltd. v. Union of India, reported in 1993 (66) E.L.T. 537 (S.C.). In the said decision this Court held that the quantum of the redemption fine would depend on the facts and circumstances of each case and no hard and fast rule can be laid down in that behalf. While rejecting the contentions of the assessee/appellant in that case that the importers had acted in good faith and bona fide and therefore assessee is entitled to claim entire rede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been held that penalty is to be limited to the total DEPB benefit of ₹ 11,26,137/-. Sd/- (Manmohan Singh) Member (Technical) In view of above difference in opinion of both the Members in this appeal, under mentioned questions arise for reference to the Hon ble President to resolve the same. Registrar is required to place both the files before him : DIFFERENCE OF OPINION 1. Whether there was fraud committed by appellant against revenue making intentional misdeclaration of description of goods as well as value and claim of higher DEPB with mala fide intention? 2. Whether on the facts circumstances as well as uncontroverted evidence recorded in adjudication, penalty of ₹ 50,00,000/- u/s 114(iii) of the Customs Act, 1962 is required to be imposed as held by Hon ble Member (Technical) or penalty to the extent of DEPB benefit of ₹ 11,26,137/- claimed by the appellant shall be imposable as held by Member (Judicial)? Sd/- (Manmohan Singh) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) In my views, difference at Sr. No. 1 framed by Ld. M (T) does not arise as the fact of misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under Section 114(iii), held that looking to the nature of the offence, penalty of ₹ 11,26,137/-, equal to the DEPB benefit claimed by the appellant, would be sufficient and accordingly she reduced the penalty to this level, Member (Technical) in a separate order expressed the view that looking to mala fide intention of the appellant to defraud Revenue by making fraudulent claim of DEPB by gross misdeclaration value of the goods, this case requires a much higher penalty and accordingly he ordered imposition of penalty of ₹ 50 lakhs, so that in future such frauds do not take place. Thus the point of difference which has been referred to the undersigned for decision is as to whether in the facts and circumstances of the case as well as uncontravened evidence recorded in adjudication order, penalty of ₹ 50 lakhs under Section 114(iii) of Customs Act, 1962 is required to be imposed, as held by Member (Technical) or penalty to the extent of DEPB benefit of ₹ 11,26,137./- claimed by the appellant shall be imposable, as held by Member (Judicial). 22. Heard both the sides today on the point of difference. 23. Sh. Roshan Lal, Consultant, the Learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) has held that reduction of redemption fine and penalty to 20% and 5% respectively in the case of fraud, is not justified and that redemption fine and penalty in the cases of fraud must be commensurate with the gravity of the offence. He, therefore, pleaded that looking to the nature of the offence of the appellant, the penalty of ₹ 50 lakhs imposed by Hon ble Member (Technical) is justified. 25. I have considered the submissions from both the sides and perused the records. As observed by Hon ble Member (Judicial) in her observation dated 1-8-2013 recorded below the point of difference, there is no difference of opinion on the question of misdeclaration of value and as such on this point both the members have decided against the appellant and thereby upholding the allegation of misdeclaration of value and on this basis, confiscation of the export consignments under Section 113 of the Customs Act, 1962. Therefore, I am not required to go into the question as to whether the allegation of gross misdeclaration of value is to be upheld. The point of difference which is to be decided is only over the quantum of penalty. While according to Member (Judicial), penalty of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing highly inflated FOB value of the goods being exported, covered by the Clause (iii) of Section 114, the maximum penalty which can be imposed is - declared value of the goods being exported or the value determined under this Act, whichever is higher and thus, in such cases the maximum penalty which can be imposed is not restricted to the Drawback/DEPB benefit involved and higher penalty can be imposed if the gravity of the offence warrants. Thus the Legislature has provided for higher quantum of penalty for the offences covered by the Clauses (i) and (iii) of Section 114 which are of more serious nature. 27. The appellant s case is covered by the clause (iii) where the maximum penalty which is imposable is the value of the goods as declared by the exporter or value as determined under this Act, whichever is greater . The value declared by the appellant (exporter) in respect of the three consignments attempted to be export under claim for DEPB benefit is ₹ 1,40,76,720/-, while the ascertained value of the consignments of ₹ 33,000/-. There is this overvaluation to the tune of 426 times obviously with intention of claiming higher DEPB benefit of ₹ 11,26,137/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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