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TMI Blog2003 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... per piece was acceptable to him and the claim for drawback was withdrawn. Thereafter, the exporter has not led any evidence that export value mentioned in the shipping bill was the true sale consideration for the goods sought to be exported. Considering the aforesaid facts and also the fact that this was the second case belonging to the same exporter, the authorities arrived at the conclusion that it was an organized racket to claim fraudulent drawback or an act of deliberate over-invoicing the readymade garments. Hence, the authority imposed redemption fine as well as levied penalty. In our view, this finding arrived at by the authorities below cannot be said to be, in any way, unreasonable which would call for interference by this Court in this appeal. In the result, the appeal is dismissed. - 4060 of 2001 - - - Dated:- 7-7-2003 - M.B. Shah and Arun Kumar, JJ. [Judgment per : M.B. Shah, J.]. - Questions requiring consideration in this appeal are : - (A) Whether over-invoicing of the goods for export would mean attempt to export 'prohibited goods'? and (B) Whether, while exporting the good, exporter has to give value of the goods as provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, his contention is - Section 113(d) is not applicable to the facts of the present case as the goods are not prohibited goods. He further stated that exporter is not required to declare the market value of the goods which he would fetch in the market in India. He is required to declare the value of the goods which he is expected to receive from the overseas purchaser and that is the scheme of the Customs Act, as well as of the allied Acts. 4.Learned Additional Solicitor General Mr. Raju Ramchandran, on the other hand contended that over-invoicing is not permitted under the Act as it is in violation of statutory provisions. He further submitted that at the time of export, the exporter has to give correct value of the goods and that correct value of the goods would be the value of goods which he would fetch in market in India or which he is likely to fetch from overseas purchaser. 5.At the outset, we would state that the learned Counsel for the appellant has not pressed for the drawback in view of specific provision of Section 76 which inter alia provides that no drawback shall be allowed "(b) in respect of any goods the market-price of which is less than the amount of dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Shekih Mohd. Omer v. Collector of Customs, Calcutta and Others [(1970) 2 SCC 728] wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus :- '…What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er expects to receive on the sale of the goods in the overseas market, and (c) the exporter has to affirm that full export value of goods will be received. 12.These two clauses of Section 18 leave no doubt that exporter is not concerned with the prevailing market price in India of the goods sought to be exported, but he is required to disclose true export value of goods. That is to say, exporter has to disclose full and true sale consideration - export value of the goods. The notification issued in exercise of the power under Section 18 also inter alia provides that Central Government prohibits the export of all goods unless exporter furnishes to the prescribed authority a declaration in the prescribed form of material particulars including the full export value of the goods or in the alternative the value of the goods which he expects to receive on their sale in overseas market. Hence, importance is given to the value of goods which exporter is to receive. It also provides that the exporter shall affirm in the declaration that full export value of the goods has been or will within prescribed period be paid in the prescribed manner. Further, the learned Additional Solici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of each other and price is the sole consideration for the sale or offer for sale : Provided 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 or bill of export, as the case may be, is presented under Section 50; (1A)Subject to the provisions of sub-section (1) the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. (2)Notwithstanding anything contained in sub-section (1) or sub-section (1A) if the Central Government 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. …." 14.The aforesaid Section would be applicable for determining the value of goods for the purposes of assessment of tariff under the Act or any other law for the time being in force where under a duty of cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l with this aspect in this appeal as the goods were sought to be exported in the year 1998. 16.From the aforesaid provisions, mainly, Section 2(41) read with Section 14 of the Act and Section 18 of the Foreign Exchange Regulation Act, 1973, it is crystal clear that :- (a) Exporter has to declare full export value of the goods (sale consideration for the goods exported). (b) Exporter has to affirm that the full export value of the goods will be received in the prescribed manner. (c) If the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market. (d) Exporter has to declare true or correct export value of the goods, that is to say, correct sale consideration of the goods. Criterion under Section 14 of the Act is the price at which such or other goods are ordinarily sold or offered for sale in the course of international trade where the seller and buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale. 17.To the same effect Rule 11 of the Foreign Trade (Development and Regulation) Rules, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of readymade clothes, particularly, in the days where information is easily available through internet or various other sources. In any case, when margin of profit appears, on the face of it, unreasonable, it is for the exporter to establish that it was true export value stated in the shipping bill. Section 14 itself contemplates that the price at which such or like goods are ordinarily sold or offered for sale in the course of international trade would be the value of the goods. 20.In Toolsidass Jewraj v. Additional Collector of Customs Others [(1991) 2 SCC 443], full export value of the goods was not correctly stated in the shipping bills along with G.R. I forms and it was a case of under-valuation in respect of full export value of goods. In that set of circumstances, the Court upheld the order passed by the authorities that there was violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947. 21.In the present case, as found by the authorities, 28,000 pieces of ladies skirts at the rate of $10.25 per piece, export value of which was mentioned as Rs. 1,21,54,447/-, were sought to be exported. The market price of such skirts was ascertained to be Rs. 45/- p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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