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2023 Supreme(Del) 2540
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Sh S. K. Jindal Director – Appellant
Versus
Commissioner of Customs – Respondent
CUSAA 8 of 2023 & CM APPL. 8597 of 2023, CUSAA 9 of 2023 & CM APPL. 8675 of 2023
Decided On : 22-02-2023
Ms. Priyanka Goel, Adv., for the Appellant.
Mr. Anurag Ojha, Senior Standing Counsel for Revenue with Mr. Kumar Abhishek and Mr. Gautam Barnwal, Advocates, for the Respondent.
The valuation of goods for duty drawback and the credibility of defenses in customs cases are crucial factors in determining the outcome of appeals.
Headnote:
Customs Act - Valuation of Goods - Section 114, Section 114AA - The court discussed the valuation of goods under the Customs Act, 1962, specifically focusing on the over-valuation of goods for availing a higher duty drawback. The court also considered the defense of seeking withdrawal of export shipments and the relevance of a letter requesting permission for withdrawal.
Fact of the Case:
The case involved the over-valuation of goods for export, leading to the denial of duty drawback and imposition of penalties under the Customs Act, 1962.
Finding of the Court:
The court found that the goods in question were over-valued, and the defense of seeking withdrawal of export shipments was not substantiated.
Issues: The key issues included the valuation of goods for duty drawback, the credibility of the defense regarding the withdrawal of export shipments, and the admissibility of the letter requesting permission for withdrawal.
Ratio Decidendi: The court held that the over-valuation of goods and the lack of substantiated defense led to the dismissal of the appeals.
Final Decision: The appeals were dismissed by the court.
JUDGMENT
Vibhu Bakhru, J. (Oral)
1. The appellants have filed the present appeals impugning an order dated 02.08.2022 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereafter `the Tribunal') in the respective appeals preferred by the appellants - Customs Appeal No. 50306 of 2022 [SM] and Customs Appeal No. 51272 of 2022 [SM].
2. M/s Bhavana Jindal Exim Pvt. Limited (appellant in CUSAA9/2023 and hereafter referred to as `the company') is, inter alia, engaged in the business of exports. Sh S.K. Jindal (appellant in CUSAA 8/2023) is one of the directors of the company.
3. The controversy arises in the context of two shipping bills dated 27.01.2017 (Shipping Bill No. 3718938 and 3718934) which were filed by the company's CHA (M/s. Sadagati Clearing Services Pvt. Ltd.).
4. The shipping bills related to shipment of `Leather Apparels and Leather Gents Long Jacket', which were being exported to M/s Unimax Handbags, Los Angeles.
5. It is the respondent's case that DRI Officers, on the basis of some intelligence, examined the goods on 17.02.2017 and on visual examination, found that those goods were old and used.
6. Thereafter, the statement of Sh S. K. Jindal (Appellant in CUSAA 8/2023), was recorded. It is apparent from the said statement that he admitted that the goods, which were being exported were old.
7. Thereafter, the Show Cause Notice dated 02.08.2017 was issued calling upon the appellants to show cause why penalty under Section 114 of the Customs Act, 1962 (hereafter `the Customs Act') not be imposed. It was alleged that the goods were over-valued to avail a higher duty drawback.
8. The adjudicating authority adjudicated the said show cause notice by an order dated 10.01.2019. The adjudicating authority denied the drawback of Rs. 6,09,976.74/-, claimed on the goods covered under the shipping bills in question. The adjudicating authority also imposed penalty of Rs.5 Lakhs under Section 114(iii) of the Customs Act and a penalty of.5 Lakhs under 114AA of the Customs Act on the company. In addition penalties of Rs. 1 Lakh under Section 114(iii) and 114AA of the Customs Act were also imposed on Sh. S.K. Jindal.
9. It was found that the declared unit price was USD 130 (Rs.8762) per piece and USD 135 (Rs.9099) per piece, as mentioned in the shipping bills. However, the value of the said goods was determined at Rs.500 per unit totalling to Rs.3,52,500/. This was also confirmed by Sh. S K Jindal (appellant in CUSAA 8/2023) in his statement.
10. The appellants appealed against the said order dated 10.01.2019 before the Commissioner of Customs (Appeals). However, the said appeals were rejected by an order dated 01.10.2021.
11. The appellants carried the matter in appeal before the Tribunal. These appeals were dismissed by the impugned order.
12. A plain reading of the pleadings as well as the impugned orders, indicates that there is no dispute that the goods in question were over-valued.
13. Ms Goel, the Learned counsel appearing for the appellants submits that although it is admitted that the goods in question are not new but the appellants had not admitted that the goods were used.
14. In our view, that makes little difference as there is no real dispute that the goods were over-valued.
15. The appellants' defence rests on their claim that the company had sent a letter dated 31.01.2017 requesting permission for withdrawal of both the shipments.
16. It is stoutly contended that since the appellants had sought withdrawal of the export shipments, no mens rea could be attributed to them. More importantly the company had no intention to avail duty drawback.
17. It is also pleaded that the said letter was sent because the CHA, while examining the goods on 27.01.2017, had found the goods to be old and used and had informed the same to the appellants. The Director of the appellant was travelling and therefore had reacted a few days later by sending the letter dated 31.01.2017.
18. The said expla
