CC, ICD, TKD, New Delhi vs M/s.Kadmabri Worldwide And Anr.

Sl. No.,S/Bill No.,Dated,"Description

of The goods","FOB Value

Rs./yd","Jagdish &

Sons","Kedarnath &

Ratanlal

1,1543780,07.11.2005,"Polyester

Viscose

Fabric",132.00,20-22,20-21

department that overvaluation has been undertaken for availing higher DEPB benefit. Since Revenue has come up in appeal against the order passed,,,,,,

by the Commissioner (Appeals), Reference was made to circular No.26/4/2001 wherein it has been stated that in case over-invoicing of export",,,,,,

goods, PMV shall be determinative factor for allowing DEPB benefit .Reference was also made to the Circular No.63/2002-Cus dated",,,,,,

27.9.2002, Circular No.77/2002-Cus dated 27.11.2002 and Circular No.7/2003-Cus dated 5.2.2003.",,,,,,

In the above circulars, reference was also made to the Larger Bench judgement of the Tribunal in the case of Om Prakash Bhatia vs. CC-2001",,,,,,

(127) ELT 81 wherein it was held that section 14 of the Customs Act would apply to export valuation also. Reliance was placed on the judgment of,,,,,,

Hon’ble Calcutta High Court in the case of Pankaj vs. Seth-1997 (90) ELT 31 (Cal.), judgement of the Tribunal in the case of Globe Traders vs.",,,,,,

CC, Mumbai-2004 (166) ELT 92 (Tri.-Mum.) wherein it was pointed out that the drawback claim could be reduced in the light of market",,,,,,

enquiries. Reference has also been made to the judgement in the case of Sigma Industries vs. CC, New Delhi-2000 (124) ELT 315 (Tri.) wherein it",,,,,,

has been held that valuation done by the contemporary exporters was to be kept in mind for determining DEPB credit.,,,,,,

Revenue also challenged findings of the Commissioner (Appeals) wherein it was held that difference between the declared price and actual price,,,,,,

was not very significant and DEPB was allowable. Central Board of Excise and Customs by its Circular NO.77/2002-Cus dated 27.11.2002 clarified,,,,,,

that many unscrupulous exporters were availing unintended DEPB benefits. In order to curb such practice,G overnment through these circulars",,,,,,

laid down that wherever, the declared FOB value was more than the Present Market Value (PMV) as declared by the exporter or as",,,,,,

ascertained by the Customs authorities, the present market value shall be the basis for granting DEPB credit.",,,,,,

Ms. Ranjana Jha, ld. JCDR during the course of hearing before the Tribunal invited attention to section 14 of Customs Valuation of the goods and",,,,,,

read with larger bench decision of the Tribunal in the case of Om Prakash Bhatia contended that Valuation Rules 2007 were also applicable for,,,,,,

determining export price. It was held by the Supreme Court that market price of the goods prevailing in the country was the relevant,,,,,,

consideration for purpose of getting drawback, and not the price of the goods which the exporter expects to receive from the overseas",,,,,,

purchaser. In respect of over-invoicing of readymade garment when margin of profit appears, on the face of it, unreasonable, it was for",,,,,,

the exporter to establish that true export value has been stated in the shipping bills.,,,,,,

Respondents supported the impugned orders. Heard both sides and gone through the records to appreciate the rival contentions. The present,,,,,,

appeals have been filed by the Revenue against the Order of the Commissioner (Appeals) who has held that DEPB claim could not be denied merely,,,,,,

on the basis of value of goods ascertained from the market enquiry and where full payment has been received from the exporters/respondents. He,,,,,,

also referred to several judgements to support his finding.,,,,,,

The Revenue in their appeals, referred to the judgements passed by the Supreme Court in the case of Om Prakash Bhatia-2003 (155) ELT 423",,,,,,

(SC) wherein it was held by the hon’ble Supreme Court that market price prevailing in the country and not the price which exporters accepted,,,,,,

from the overseas buyers was relevant consideration for getting drawback. It was also held that where margin of profit appears to be unreasonable it,,,,,,

was for the exporter to establish that true value was declared in the shipping bills.,,,,,,

The Revenue has also pointed out that while market price was in the range of Rs.20-22 per metre, the respondents declared FOB value at Rs.132",,,,,,

per metre. It has also been highlighted in the appeals that findings of the Commissioner (Appeals) to the effect that variation between margin of profit,,,,,,

Rs.80 per yard and net export price Rs.102 per yard was not significant, was factually incorrect.",,,,,,

On careful examination of the impugned order, we find that the same has been passed in a very casual manner. The Commissioner (Appeals) has",,,,,,

passed the order totally unaware of the facts and figures involved in the case as pointed out by the Revenue. His finding that there was no significant,,,,,,

difference between the maximum market price of Rs.80 per yard and export price of Rs.102 per yard was based on the imaginary figures as the,,,,,,

actual figures involved in the present matter are market price of Rs.20-22 per metre and FOB value of Rs.132 per metre. The FOB value was,,,,,,

discovered by the Revenue through market enquiry. It is also observed that the Commissioner (Appeals) has passed the order based on the wrong,,,,,,

facts and figures. Obviously when he was unmindful of the correct facts and figures, he could not appreciate the context of applicability of judgement",,,,,,

quoted by the Revenue and the respondents/exporters. As consequence, it would be inappropriate for us as final fact finding authority to base our",,,,,,

decision on Order-in-Appeal which does not take into account the facts involved, the extant of law, value of exported goods, administrative guidelines",,,,,,

on the issue of applicability of judgement quoted by both sides.,,,,,,

On consideration of facts, figures and circumstances, we find that it to be fit case for reconsideration by the lower appellate authority.",,,,,,

Accordingly, we remand the matter back to the Commissioner (Appeals) without considering anything on the merit of the case with direction to decide",,,,,,

the matter afresh on the basis of correct facts and figures after taking into account the applicable export valuation rules and the relevant judgements,,,,,,

as well as administrative guidelines for implementation of law. It is also ordered that Revenue and exporters should be afforded the opportunity to,,,,,,

present their case in de novo adjudication so that proper natural justice would be granted to both sides.,,,,,,

In view of above observations, departmental appeals are disposed of by way of remand to the lower appellate authority.",,,,,,

(Pronounced on 29.01.2015),,,,,,