ORDER
C.N.B. Nair
1. The appellant is an exporter of readymade garments. They filed six shipping bills all dated 31.12.98 for export of 4339 pieces of assorted ladies readymade garments. Export value of the goods was declared at around Rs.19 lacs. The goods in question are eligible to drawback at 18%. Examination of the goods gave rise to suspicion that the goods had been over-invoiced in order to claim higher drawback. Investigations were, therefore, conducted by the customs authorities. They culminated in the impugned order, which ordered confiscation of the goods under section 113(ii) of the Customs Act, 1962 and imposition of a penalty of Rs. 15,000. It was also ordered that the goods cold be redeemed on payment of fine of Rs.70,000 and drawback on the consignment shall be paid based on the market value ascertained during the enquiry and not at the declared export value. Appellant challenges this impugned order.
2. It has been submitted by the appellant that the export prices declared by them were actual prices at which the goods were sold. They have also submitted that the market enquiries conducted by the investigating authority and the market price ascertained had no basis at all. It is also their grievance that their case has been taken for investigation contrary to the guidelines issued by the Department of Revenue under its Circular No. 74/2000 dated 7th September, 2000. It has been pointed out that the circular had specifically directed that market enquiry should be ordered only in such cases where prima facie the restrictions placed by Section 76(1)(b) would be violated.
3. The impugned order had been passed on the basis that the export value was much higher than the market value and that the appellant had confessed over-invoicing of the goods.
As the confessional statement and market enquiries were not available in the appeal file, we directed the Learned Departmental Representative to obtain case records for our perusal. The case records have accordingly been made available today and we have perused them.
4. A comparison of the market values adopted and export prices itself shows that the differences were not so vast as to straightaway reach to the conclusions that export prices had been misdeclared artificially high so as to commit a fraud in regard to drawback. For e.g. the export price of Rayon P/L Ladies Dress was Rs.423 per piece i.e. a difference of only over 11%. Market value ascertained is Rs. 375. In no case the export value is found to be alarmingly high. On a perusal of the case records, we find that the market enquiries were conducted from two firms. Report of H.K. Exports (India) dated 19.4.99 as available at page 35 indicated “present market value of each item in my opinion”. This certificate issued to “To whom so ever it may concern” is found to be signed by some one who describes himself as “Authorise Signature”. The name of the person who has expressed “my opinion” is conspicuously absent. The second opinion is purportedly of Arunav Exports. Also dated 19.499. This also is “my opinion” but he signs “for Arunav Export Proprietor”, however, does not mention name of the person signing it.
5. Mere perusal of the above leters makes it clear that no credibility or authenticity could be attached to these “opinions” as the letters do not disclose who their authors are and what their expertise is, to express authentic opinions. No reason is also given for valuing the material at the prices indicated in the letters. In these circumstances these letters could only be taken as, at best, letter given to oblige the customs authorities, with no intent to stand by those opinions. They have no credibility and cannot constitute acceptable evidence in adjudication proceedings.
6. A perusal of the circular dated 7th September, 2000 of the Department of Revenue makes it clear that enquiries by the customs authorities in regard to export value should be limited, namely, such enquiries had to be taken up only when the restrictions placed under section 76(1)(b) are found to be violated. The restrictions under section 76(1)(b) relates to prohibition on allowing drawback in respect of any goods, the market price of which is less than the amount of drawback due thereon. It is clear from the facts of this case that quantum of drawback would not have exceeded the market value of any of the goods.
7. From what has been stated above, it is clear that the finding regarding value as reached in the adjudication order has no basis. The investigation itself was not warranted according to the guidelines on the subject issued by the Department of Revenue. The proceedings have already led to unintended difficulties to the export of the goods. In these circumstances, the impugned order cannot be sustained at all. Accordingly, we set it aside in its entirety with consequential relief to the appellants. We also make it clear that the appellants’ export prices shall be accepted and full drawback as permissible at the declared export prices should be made available to them, without restricting it to the market prices determined through enquiry.
8. The appeal is allowed on these terms.