Cus - Valuation provisions of s.14 are not applicable to goods which have already left shores & export of which has already taken place - Excess drawback allegedly disbursed not recoverable: CESTAT
By TIOL News Service
ALLAHABAD, JAN 03, 2017: M/s KAKA Carpets presented three Shipping Bills dated 07.06.2008 with FOB value of Rs.2,45,11,179/- under claim for drawback for export of commodity "Indian Hand Knotted Woollen Carpets" with ICD, Bhadohi.
The said Shipping Bills were assessed and the examination was conducted by Superintendent, ICD, Bhadohi& cleared by him by giving let export order.
The custodian at ICD, Bhadohi was CWC. On 20.06.2008 the said container lying at Hind Terminals, CFS, NhavaSheva was opened by DRI Officers of JNPT, NhavaSheva in presence of two independent witness, partner of M/s Kaka Carpets and representative of Shipping line M/s Emirates Shipping line.
The bottle seal was broken and then the doors of the containers were opened. It was noticed that the container was stacked with rolls of carpets packed in polythene bags.
A total number of 626+322 of carpet rolls were found in the container which was dispatched from ICD, Bhadohi. DRI officers also took measurement of carpets representing all the three Shipping Bills.
It appeared to Revenue that 63 rolls out of 1011 rolls of carpet declared to have been presented for export through Shipping Bills were short.
On the basis of samples drawn during examination of carpets and market enquiries conducted about quality and value of carpets, it appeared that the declared FOB value was far in excess of the value of goods declared. Inasmuch as it appeared that drawback claimed by M/s Kaka Carpets in the said three Shipping Bills respectively as Rs.10,54,016/-, Rs.11,04,300/- & 11,00,700/- was more than their admissibility.
Thus, it appeared that in respect of the goods already exported from 02.02.2004 to 24.06.2008, the value declared by M/s Kaka Carpets in various Shipping Bills was Rs.1,59,66,35,071/- on which total drawback already disbursed was Rs.16,93,96,338/- whereas the correct FOB value should have been Rs.53,91,27,749/- and appropriate drawback admissible was Rs.4,93,16,928/-. Inasmuch as excess drawback to the tune of Rs.12,00,79,410/- was disbursed to M/s Kaka Carpets, the Revenue alleged.
It also appeared that the Customs officers had cleared the consignments after superficial examination of documents and thus failed to discharge their duties and were liable to penalty u/s 114 of Customs Act, 1962.
SCN dated 16.02.2010 was issued for recovery of excess drawback sanctioned and imposition of penalties and interest.
The adjudicating authority ordered recovery of excess drawback availed; imposed penalties on M/s Kaka Carpets and its Partners and also dropped the proceedings for imposition of penalty on Rajiv Ranjan, then Assistant Commissioner, Rajender Kumar, Superintendent and Ajay Shukla, Inspector. However, penalty was imposed of Rs.1 lakh each on Pawan Kumar Singh, Superintendent and S.K.Vishkarma, Inspector u/s 114 of Customs Act, 1962.
The aggrieved appellants are before the CESTAT.
The Bench observed -
++ The container was not inspected immediately after it was removed from ICD, Bhadohi. The counting of the contents of container was carried out much later after eighteen days of container being out of the control of Officers. For counting contents of the goods at the Gate Way Port several times it was reopened, resealed, & shifted from one container to another. Therefore, it cannot be established beyond doubt that the goods stuffed in containers at the time of sealing of container at ICD, Bhadohi were less than that declared in the said Shipping Bills.
++ The fact also has emerged that when the goods were actually exported after provisional release the Overseas importer received 63 rolls less than that declared in the said three Shipping Bills but the valuation of the goods exported through said three Shipping Bills was not reduced by the importer but the less payment by the Sunshine Overseas importer was on account of short delivery of goods. Therefore, the market enquiries conducted in respect of goods which were exported through the said three Shipping Bills is not established to be correct since importer in foreign country has remitted full amount for the quantity received.
++ Further, we find that for the valuation of goods which were exported from 02.02.2004 to 24.06.2008, the Show Cause Notice has resorted to Section 14 of Customs Act, 1962. Section 14 of Customs Act, 1962 empowers valuation of export goods and export goods is defined at Clause 19 of Section 2 of Customs Act, 1962 as the goods which are to be taken out of India to a place outside India . It clearly establishes that the goods which are presented for export are export goods and goods which are exported do not satisfy the definition of export goods. Therefore, provisions of Section 14 of Customs Act, 1962 are not applicable to goods which have already left the shore of Indian Territory and the export of which has already taken place . Therefore, we hold that all the allegations and findings in respect of goods which were exported during the period from 02.02.2004 to 24.06.2008 are totally unsustainable.
++ Penalty under Section 114 of Customs Act, 1962 cannot be imposed for dereliction of duty on the part of the Officers.
++ Since it could not be established that at the time of export of goods from ICD, Bhadohi the exporter misdeclared the goods, therefore, penalty imposed on exporter and its Partners is also not sustainable.
As regards disbursement of drawback involved in the impugned three Shipping Bills, the Bench remanded the case to drawback disbursement Authority with a direction to take into account the actual quantity of goods exportedand on the basis of actual foreign exchange realized as per provisions of law.
The appeals were disposed of.
(See 2017-TIOL-13-CESTAT-ALL)
