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TMI Blog2022 (7) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... without associating the exporter with the same. It is basic law of evidence that every evidence that is to be adduced in a proceedings against the person should be tested for it veracity and authenticity by the person adjudging the issue. In this case Commissioner has got the market verification done and have rejected the market enquiries undertaken by the DRI. In our view the approach of the Commissioner cannot be faulted. Admittedly the market enquiries conducted by the DRI during the course of investigation were conducted without participation of the exporter or his authorized representative. The enquiries so done behind the back of the exporter cannot be solely relied for determining the market value of export goods. Once Commissioner has concluded that the value as declared by the respondent to the Custom Authorities in India is genuine, other charges made against the exporter do not survive. Even if there are certain irregularities found in the export vis a vis the legal requirements in the destination country, (Bangladesh), the same could not be made a ground for proving the misdeclaration of value. For the irregularities committed vis a vis the legal requirements in Banglad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for submission to Bangladesh Customs along with export manifest which had impression of those rubber stamps with forged signature of Customs officer named N. C. Das to give impression to Bangladesh Customs that those documents were genuinely passed by Indian Customs. However, there was no Customs officer by the name of Shri N.C.Das posted at the LCS at the material time. 2.5 On examination of the concerned Bills of Export under DEPB, it is found that mode of payment in respect of most of export consignments was on DA basis, which was not valid as per Import Policy in Bangladesh. Further, the report of the 6th meeting of SAARC sub-group on CUSTOMS COOPERATION held in SAARC Secretariat, Kathmandu reveals that for import of goods into Bangladesh Letter of Credit is considered as a mandatory document. 2.6 Investigation with State Bank of India, Burtalla Street Branch, Kolkata, the Banker of the noticee firm revealed that Bills drawn under Letter of Credit were not negotiated or discounted by them and were sent for collection as per the instruction of the exporter. In respect of the Bills under D.A., Bank informed that the remittances were received from entities other than the foreign b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of Customs Valuation (Determination of value of export goods) Rules, 2007. 2.12 The residual method under Rule 6 of Customs Valuation (Determination of value of export goods) Rules, 2007, was resorted to redetermine the value of the export goods. Accordingly, on market inquiry the valuation of the said export consignment was redetermined 2.13. A show cause notice was issued rejecting the declared value u/r 8 of Customs Valuation (Determination of value of export goods) Rules, 2007 and proposing confiscation of the export consignments u/s 113(d) (i) of the C.A. 62 and imposition of penalty u/s 114 114AA of the said Act. 2.14 The Commissioner of Customs (Preventive), W.B., Kolkata vide the impugned order dropped all the charges as had been made out in the said SCN against the noticees. 2.15 Aggrieved revenue has filed these appeals stating following grounds: (a) The adjudicating authority rejected the market enquiry report of DRI in the instant case, on the ground that the noticee firm was not associated in the said enquiry and the wholesale dealers were not aware of export trade. Fresh market verification was therefore conducted in presence of the representatives of the noticee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned by the Commissioner was not ascertained before putting reliance on such documents by the adjudication authority. As the purchase documents were not submitted to the investigating authority during the investigation, reliance on those documents by the adjudicating authority is not justified. (c) The adjudicating authority appears to have erred while concluding that there was no overvaluation as the COIN report citing Bangladesh records, says that Customs duty was evaded in Bangladesh. The investigation and the SCN itself has stated the very important fact that the noticee firm has first overvalued the goods to avail undue export benefits under DEPB and then forged and fabricated the export documents to facilitate fast and smooth clearance of such consignments by his counterpart in Bangladesh through Bangladesh Authorities. Mere establishment of undervaluation in a foreign country is not sufficient ground to conclude that there was no overvaluation by exporter in India. (d) The Adjudicating Authority appears to have erred in not taking cognizance of the fact that the documents involving both D.A. as well as Letter of Credit were not being negotiated in the manner as prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter, CHA, clearing agent and their employees to facilitate importers of Bangladesh to evade customs duty payment in Bangladesh. I propose to deal with each issue serially: (1) Charge of Overvaluation :- It has been alleged that the exporter i.e. M/S. A.S. Traders had declared FOB value of goods at Rs. 3,22,80,954/- in respect of 4 bills of export from no. 88-91/EXP/MAU/DEPB/MDPR/09 all dated 06.01.2009 for export to Bangladesh through Mahadipur LCS. The value according to the DRI ought to be re-determined under Section 17 of the Customs Act, 1962 at Rs. 1,11,51,198.85. In view of alleged mi- declaration in respect of FOB value, DRI also proposed confiscation of the goods under Section 113(d) and 113(i) of the Customs Act, 1962. The valuation of the goods was arrived at by DRI on the basis of market verification of samples of fabrics that were drawn at the time of examination of the export goods. The market verification of the samples were made by the investigating agency from M/s. R.N. Textile, 22 Armenian Street, Kolkata -700 001, M/s. A.M. International, 20 Strand Road, Kolkata 700 001 and M/s. Suman Trading Company, KumirJalka Road, Srirampore, Hooghly. The offer price of synth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again for market verification. They also added that actual value of goods was only marginal lower than the FOB (profit + cost added further). They also admitted that remittance was to come substantially from Dubai. In view of above submission of the exporter in regards to market verification of the export consignment, sealed samples of the exported goods lying at Malda Customs Division were brought to this office to determine the contemporaneous value of the export goods. It was decided that fresh market verification will be conducted by members of market verification subcommittee of S D Unit (working under joint pricing committee of this Commissionerate of CCP), W.B.) jointly with authorized representative of said exporter and conversant officers of DRI, Kolkata Zonal Unit on 05.12.2011, 07.12.2011 and if required further on 09.12.2011. Accordingly letters dated 23.11.11 was issued to ADG, DRI, KZU requesting to depute conversant officer to take part in the above market verification and submit their report for finalization of Adjudication proceedings. Vide letter DRI F. No. 4/Kol/APP/2009/9552 dated 02.01.12 received from ADG, DRI, KZU, it was informed that in course of investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct market price as the exporter contested the market verification conducted by the investigating agency without intimating the exporter. The result of fresh market verification indicates that the price of fabrics shown in market enquiry report of the investigating agency is abnormally low and hence liable for rejection. Moreover, wholesale price of fabrics as per the fresh market verification is marginally lower than the declared F.O.B value. The F.O.B value is inclusive of profit element of the exporter and other incidental charges. The investigating agency also did not allege that the impugned goods were purchased by the exporter from local market at a lower price when the purchase documents were available with them to arrive at the correct market value of the impugn goods. Accordingly, I reject the market enquiry report of the investigating agency as market verification conducted afresh with representative of exporter does not support the allegation of over invoicing since contemporaneous price of the goods was only marginally lower than the FOB price shown by the exporter in Customs documents. Overvaluation is also being alleged on the ground that much lower value was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order with an Indian exporter and provide for payment on DA basis, the exporter cannot be held liable for any illegal action of the foreign party. It is for the foreign buyer to handle once of the goods reach Bangladesh and the exporter cannot be taken to task. Even today hundred thousands of exports are being allowed to Bangladesh through various LCSs on DA basis. They have also submitted that as per master circular no. 9/2009-10 dated July, 1, 2009, it is stated that there is no specific instruction issued by RBI against making export on DA basis. It is true that the Letter of Credit is one of the recognized modes of payment in exportation of goods outside India. However, from a bare perusal of the guidelines issued by the Reserve Bank of India vide Master Circular No. 09/2009-10 dated July 1, 2009 it would be amply clear that the instructions on export of goods and services including manner of payment and monitoring of realization/follow up have been consolidated in a generalized manner and the same is applicable to exports on DA basis also. The Exim Policy of India and the guidelines issued by the Reserve Bank of India in that behalf rather do not provide that export to Bang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re conducted fraudulently. During the adjudicating proceedings commissioner has duly ordered for such market verification on the basis of the same sample that were drawn from the export consignment at the time of seizure. On the examination of the same samples and verification undertaken Commissioner has re-determined the market value of the export consignments and concluded that the value as declared by the exporters was genuine. Revenue in their appeal have sought to place reliance on the market enquiries that were conducted by the DRI without associating the exporter with the same 4.4 It is basic law of evidence that every evidence that is to be adduced in a proceedings against the person should be tested for it veracity and authenticity by the person adjudging the issue. In this case Commissioner has got the market verification done and have rejected the market enquiries undertaken by the DRI. In our view the approach of the Commissioner cannot be faulted. 4.5 Admittedly the market enquiries conducted by the DRI during the course of investigation were conducted without participation of the exporter or his authorized representative. The enquiries so done behind the back of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be proved by making reference to the market enquiry without there being any indication of comparability of the goods. We also find that though the appellant has produced the invoices of the suppliers but the same stand dismissed by the adjudicating authority on the flimsy ground without being any concrete evidence to show that the same do not stand issued by the said supplier. The adjudicating authority has raised the same flimsy doubt about the correctness of the said invoices, even in those cases where the supplier has come forward and has admitted having supplied the goods. Such attitude of the Revenue cannot be appreciated. 4.1 The onus to prove overvaluation falls upon the Revenue and is required to be discharged by production of evidence. This was so observed by the Tribunal in the case of Akshay Exports Inds. v. Commissioner of Customs - 2003 (156) E.L.T. 268 (Tri.-Kolkata). The said decision stands approved by the Hon ble Supreme Court when the appeal filed by Revenue was rejected. In the absence of positive evidence, the value of export cannot be rejected on the basis of market enquiry or on the flimsy ground. In any case, we note that the appellant had admittedly re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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