By TIOL News Service

MUMBAI, APRIL 18, 2018: THE appellant had filed shipping bills for export of readymade garments under claim of duty drawback.

Revenue harboured a doubt about the value of the readymade garments and drew samples from the consignments and forwarded the same to the assessing group for verification. Provisional export of the shipment was allowed.

Subsequently, Revenue conducted market enquiry and on that basis entertained a view that the value of the exported goods were on the higher side. After about two years, another market enquiry was conducted and various items were also purchased under invoices to substantiate its stand that the goods were available at lower value in the Indian market.

Alleging that the export consignment was over-valued, proceedings were initiated by way of SCN proposing to confiscate the goods, to impose penalty and to restrict the drawback to the market value of the goods.

Vide the impugned order, the Commissioner ordered confiscation of the goods with an option of redemption fine of Rs.6,72,750/- and penalty of Rs.50,000/- u/s 114(i) of the Customs Act, 1962. In addition, the drawback restrictions were also made, restricting the claim to market value.

Hence, the present appeal before the CESTAT.

The Bench observed -

+ We note that the readymade garments were Baba Suits, Boys trousers, Boys Tshirt- knitted etc. The first market enquiry conducted by the Revenue was from a number of small stores selling more or less the said goods. The market survey specifically says that "identical readymade garments were not available in the said shops, some what similar goods are available".

+ We observe here that the value of the clothing depends upon the number of factors including the quality of fabric used, stitching quality, brand name and art work done on the same. A baba suit may be available in the market at a price of Rs.50/- or Rs.500/- or more. Similarly, in respect of second market survey also there is nothing on record to indicate that the type of garments available in the market were identical to the type of garments exported by the assessee.

+ As such, we agree with the assessee that overvaluation of the consignments cannot be proved by making reference to the market enquiry without there being any indication of comparability of the goods. Onus to prove over-valuation falls upon the Revenue and is required to be discharged by production of evidence.

+ In the absence of positive evidence, the value of export cannot be rejected on the basis of market enquiry or on flimsy ground. In any case, we note that the appellant had admittedly received the entire remittance of the export proceeding by way of BRCs. If that be so, the Revenue's case that there was overvaluation of the goods does not stand. The appellant having been able to sell the goods even at higher value to their foreign buyer and having realized the entire consideration for the export consignments, is entitled to the drawback admissible to him under the law.

Concluding that there is no justifiable reason to uphold the impugned order, the same was set aside and the appeal was allowed with consequential relief.

(See 2018-TIOL-1221-CESTAT-MUM)