Cus - export is not liable to duty but misdeclaration of higher value to claim higher drawback is breach of law and is one of modality of hawala - violation of provisions of Sec 113 proved - redemption fine imposable: CESTAT
By TIOL News Service
NEW DELHI, MAY 20, 2015: THE appellant attempted to export silk carpets by presenting exporting documents on 5.1.2010 declaring export of 213 pieces and 96 pieces of silk carpet in terms of Shipping Bills both dated 2.1.2010 declaring FOB of Rs.57,92,394/- and Rs.92,90,813/- and claiming duty drawback of Rs.8,39,897/- and Rs.13,47,168/- respectively.
It was found by the Customs department that neither such quantities were available in the exporting consignments nor the values declared were correct.
Upon detection, immediately on 6.1.2010, exporters filed revised Shipping Bill declaring lower quantities of the above goods, an excess declaration of 142 pieces in one S/B and 64 pieces in another vis-à-vis that filed originally. The inflated value declared without corresponding quantity of goods resulted in a higher claim of drawback of Rs.14,90,684/-. This fact was not rebutted by appellant and the only plea made is that the incongruence is a clerical error inasmuch as wrong invoice and wrong packing list were sent along with the Shipping Bill initially filed.
Before the CESTAT against imposition of penalty by the Commissioner of Customs (Export), the appellant pleaded that there was no deliberate mis-declaration; that invoice and packing list were revised when the mistake came to its notice; that drawback was being allowed on the basis of Shipping Bill but not on invoice value, the appellant having declared proper value in the Shipping Bills, it is neither liable to redemption fine nor penalty. Inasmuch as since the original authority did not impose any redemption fine, levy of penalty of Rs. 14,90,684/- by him u/s 114 of Customs Act, 1962 was also unwarranted.
The AR submitted that it was only upon detection that the mis-declaration was unearthed and had that not been done, then the appellant would have made claim of higher amount of duty drawback at the cost of the exchequer. That no prudent exporter would export higher quantity than the real exportable quantity when he was not being paid for such higher quantity.And hence the penalty imposed for contravention of section 113(i) and section 113(ii) of Customs Act, 1962 was proper in law. It is also submitted that Revenue is in appeal against the non-imposition of Redemption fine by the adjudicating authority.
The Bench, while adverting to the apex court decision in Om Prakash Bhatia Vs. Commissioner of Customs, Delhi - 2003-TIOL-06-SC-CUS observed –
+ It is an established fact from the materials on record that higher quantity of goods were covered by both the Shipping Bills filed on 5.1.2010. So also packing-list declared higher quantity. Only upon detection by customs, appellant came forward to file revised invoice and packing list declaring lower quantity meant for export in terms of both the Shipping Bills. Misdeclaration of the quantity gave raise to mis-declaration of the value of the export.
+ No doubt, export is not liable to duty but misdeclaration of the higher value to claim higher drawback is breach of law. Misdeclaration of the higher value is one of the modality of hawala transactions.
+ Revenue is correct to submit that there was violation of provision of section 113(i) and 113(ii) of Customs Act, 1962 since there was a misdeclaration of the quantity and value of the goods with material departure to the particulars relating to quantity and value of the goods being attempted to be exported under drawback claim not corresponding in material particular with the information furnished in the export documents.
+ Revenue's contention that appellant acted deliberately cannot be ruled out for the reason that an exporter who has not remitted higher amount of foreign exchange to this country does not expect higher quantity of goods with higher value. Accordingly, confiscation of the goods was justified. Since the goods were under drawback claim, imposition of redemption fine is also warranted under law.
Nevertheless, the matter was remanded to the Commissioner to determine appropriate quantum of redemption fine etc.
(See 2015-TIOL-905-CESTAT-DEL)
