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TMI Blog2002 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... imports were related transactions, but for the mis-declarations on import and export invoices, they would not have met the value addition norms, to qualify for benefit of Customs Duty under DEEC scheme as per 51 of EXIM Policy 1992-97. 2. Enquiries were caused by DRI Officers of Bangalore Zonal Unit and a show cause notice issued on the enquiries made alleged, that :- (i) BBS was incorporated registered as a Private Ltd. Company with Directors being NRIs and an Italian national was Managing Director, who was also the Managing Director of IGI-UAE. The other Directors were Directors of IGI-UAE while one Director of BBS was a Manager in IGI-UAE. (ii) Purchase orders were recovered, amongst the documents which appears to have been made, after goods were stuffed in the containers at UAE. The Bills raised on BBS were at prices indicated by Manager of IGI-UAE. The invoices produced to Customs, were showing lower values, than invoice recovered during the search. It was also alleged that invoice produced to Customs were prepared at Bangalore showing such lower values. (iii) As regards goods exported to M/s. Anker International (UK) by BBS the invoice Bills, rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the purchase order had been received by IGI-UAE. The purchase order dtd. 6-9-94, was therefore a mere formality. From the two invoices recovered viz. IGI 2276-94 and 2275-94 both dtd. 26-4-94 of IGI on BBS, he found that the goods stuffed in the containers were the same as declared on these invoices, out of which no IGI 2276-94 was produced before Bangalore Customs, on which the value were different, to the extent of US$ 15635.16. He found the lower value invoice to be prepared at Bangalore office of BBS, since Blank invoices/stamps etc. of IGI-UAE were found by the DRI during the search at the premises of BBS. Thereafter, he concludes that all imports made by BBS had been made in that fashion and were undervalued to the same extent. (c) Similarly from the seized note sheets, he concluded that BBS exports to UK firm on account of IGI-UAE were overvalued, since the invoice values of BBS raised on IGI-UAE were higher than the invoices raised by IGI-UAE on UK firm for the same goods. That all such differences in export values, were debited to BBS accounts. Since he found BBS to have received more sale proceeds from IGI-UAE, than that which IGI-UAE got from UK firm, he conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid RCMC inter alia, is a document required to be submitted, along with the export orders. The input/out norms given as standard, can be varied by DGFT authorities. LUT/BGs have to be executed with the DGFT authorities to fulfil the exports. No material has been brought on record as to what were the declarations and documents as made and submitted to the DGFT authorities. show cause notice in Para 4.4.2 records - "4.4.2 When shown their SSI Certificates No. BUSIC/PMT/94-95, dated 20-4-94, wherein the manufacturing activities had been indicated as Engineering Moulds and Writing instruments such as ball pens etc., and the RCMC Certificate dated 13-4-94 wherein the description of the moulds and requested to explain the terminologies Engineering Moulds Plastic Engineering Moulds........." The Registration Certificate, No. EPC/SROB/REG(MFR)/006/94-95, photocopy available in the paper books (Page 131/133), shows the RCMC Certificate issued vide letter EPC/SROB/REG/0267, dtd. 27-4-94, under the Columns 'Description of the goods for which Registered in Part II of the Certificate required to be filled in by the Registering Authority the words are "ENGINEERING MOULDS AND WRITING ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or all the imports made in the facts of this case. (d) The overvaluation of the goods exported has been worked out in Para 12(al) of the order-in-original, based on some accounting sheets, showing a payment as per invoices, made to BBS by IGI-UAE which are more than what has been billed by IGI-UAE to M/s. Anker International UK. This para records a finding that the amounts as per BBS invoice have been received. Except for a consignment sent in last week of December. This would, not justify to be a case of overvaluation of exports from India by BBS. There could be any number of reasons, why IGI-UAE has billed the UK firm at a lower rate, including a desire to misdeclare to UK Customs. No evidence exist, whether the invoice of IGI-UAE on UK firm has been accepted or otherwise by UK Customs. Be that as it may. The receipt of the total sale proceeds by BBS, will not induce us to conclude that all exports made by BBS to other parties, are also over-valued, on basis of this evidence. There is no evidence to that effect. (e) The Commissioner appears to have laboured upon certain calculations to arrive at a general overall overvaluation on all exports by 32%. He, thereafter has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication, the authorities have to satisfy themselves about the correctness of the contents of the application. They also have to satisfy themselves that the application satisfies all the requirements of the scheme and the other applicable provisions of law, if any. In a country like ours, where abuse of such facilities is rampant, reasonable time has to be afforded to the authorities to process the application [what is reasonable time, of course, depends on the facts of each case. No hard and fast limit can be prescribed]. It is only after appropriate verification that the licence is granted." And in the case of East India Commercial Co. Ltd., Calcutta [1983 (13) E.L.T. 1342] a full Bench of the Apex Court held :- "35. Nor is there any legal basis for the contention that licence obtained by misrepresentation makes the licence nonest, with the result that the goods should be deemed to be imported without licence in contravention of order issued under Section 3 of the Act so as to bring the case within Cl. (8) of Section 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue of a licence under the Act, a licence obtained by fraud is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing order." We, therefore, accept the appellants plea made in this regard and find no reasons to hold the confiscation under Section 111(d) for violation of Import (Control) Order 1955, which has been superseded on 31-12-1993. (g) Once we cannot agree to the findings arrived as regards value of imports and exports, as is being made and or question the value additions, we find no cause to uphold the denial of benefit of Notfn. 203/92 on the imported goods or find any liability for confiscations of goods under Sections 111(d) and 111(m) as arrived. Therefore, we, find no liability for penalty under Section 112 on any person. (h) There is no allegation or any finding of any imported components/parts to have been diverted, for any other purpose than export. Quantity-wise, the exports of all the imported goods have been effected. Two licences out of seven granted have not been utilised. There is no allegation of the export proceeds not been remitted as per shipping bills filed. It is difficult to conclude as arrived at in the impugned order, that the BBS had any ulterior motive to misdeclare values at Import and thereafter at Export threshold. (i) When we look at t ..... 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