ORDER
Archana Wadhwa, Member (J)
1. Vide the impugned order Commissioner of Customs Goa, has rejected the appellant’s claim for drawback of Rs. 26,12,736/- under proviso 2 to Section 75 of the Customs Act, 1962, and has imposed personal penalty of Rs. 2,60,000/- under Section 114(iii) of the Act. The above order is based on the findings that the appellant had exported the goods by mis-declaring the description, rate and value of the same.
2. We have heard Shri S.N. Kantawala, ld. Advocate appearing for the appellant and Shri Uma Shankar the ld. SDR appearing for the Revenue.
3. As per facts on record appellant filed the shipping bill dt. 10-12-99 with the Custom House Goa, for export, of 500 cartons containing 36000 pieces Ready Made Garments Men’s exclusive Woven Trousers at the declared FOB value of Rs. 1,63,29,600/-. The said goods were meant for export to M/s. Kamal International Trading Dubai, under claim for drawback of Rs. 26,12,736/-. The market price of the goods was declared as Rs. 52,20,000/- at unit price of Rs. 145/-. The declaration to the effect that the value as contracted with the buyer is the same as the full export value was also filed by the exporters. The said declaration also disclosed that, the foreign exchange representing the full export value of the goods would be received through Laxmi Vilas Bank Ltd., Andheri, within a period of six months from the date of shipment. The said consignment was allowed to be exported by the Customs authorities after carrying usual inspection and satisfying themselves about the PMV of the goods.
4. The dispute in the present appeal relates to the description of the goods as also prevailing market price of the same and the doubts raised as regards receipt of the remittance from the foreign buyer. We will be dealing with the above issues in the succeeding paragraphs.
5. As regards the discrepancy about the description of the goods, the impugned order states that whereas the contract entered by the appellant with their foreign buyer indicate the goods as “Polyester/Viscose Fancy Trousers of various sizes specified therein, shipping bill showed the description as “Men’s Exclusive Woven Trousers” without mentioning any size. The appellants have explained that the said discrepancy was on account of the fact that the contract was more specific whereas the description in the shipping bills was generic. The above reasoning advanced by the appellant does not stand accepted by the adjudicating authority on the ground that absence of objection from the buyers is strange and leads to doubt. However, we find that in view of the fact that there was no objection by the buyer at Dubai, inevitable conclusion would be that the trousers were in accordance with the contract. In any case, we find that minor variation in the description of the case, when the same were admittedly Men’s trousers will not make much of a difference – especially when consignment stands accepted by the buyer.
7. As regards, the FOB value of the export consignment, we find that the authorities have not disputed the same. In fact the dispute raised in the present proceedings related to the market value of the same. The appellant had declared PMV as Rs. 52,20,000/-. Scrutiny of their balance sheet reflects the following position.
(i) Fabric 45025 mtrs. = Rs. 65,88,881/-
(ii) Stitching Charges = Rs. 42,75,350/-
Clearing & Forwarding Charges = Rs. 1,00,450/-
Traveiling Expenses = Rs. 6,15,306/-
Transportation = Rs. 18,000/-
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Total = Rs. 50,09.106/-
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The adjudicating authority has observed that the stitching charges undertaken by the appellant, as reflected in the balance sheet are to the tune of Rs. 42,75,358/-. Inasmuch as, PMV was to the tune of Rs. 52.20 lakhs, the value of the fabrics used for stitching the trousers would works out to only Rs. 9,44,642/-(Rupees 52,20,000/- – Rs. 42,75,350/-). As such, he has held that inasmuch as, the drawback is to neutralize the effect of duty paid on the raw materials and inasmuch as, the value of the fabrics itself works out to only around Rs. 9,00,000/-, the claim of drawback of Rs. 26,12,736/- cannot be permitted. He has further held that the figures relied by the Revenue are admitted and audited figures furnished by the exporter themselves in their balance sheet and are binding upon them.
8. However, we find that the Commissioner has failed to appreciate that even the cost of the fabrics as reflected in the said balance sheet as Rs. 65,88,881/- was also part of the audited figures. The Commissioner has chosen to pick up the stitching charges from the same balance sheet for the purposes of discarding the value of the fabrics appearing in the same balance sheet. In a Nutshell, he has accepted the stitching charges as reflected in the balance sheet to be corrected and on the basis of the same is trying to prove the value of the fabrics as incorrect appearing in the same balance sheet. It is well settled principle of law that any particular document, audit balance sheet in the present case has to be either accepted as a whole or to be discarded as a whole. It is not permissible to except one figure as true and correct (without any basis) and to falsify the other figures on the basis of the same. It is not understood as to why the value of the fabrics was not taken as correct reflection of factual position and stitching charges arrived at on the basis of the same instead of doing vice-versa.
9. In any case appellants have explained the above discrepancy, it is their contention that there was no legal obligation on their part to declare the PMV. However the same was declared by them by taking into account only the ! estimated value of the fabrics in question under bona fide belief that as long as PMV disclosed is more than the drawback, their claim cannot be denied. They have further submitted that the burden to prove that PMV is lower than the drawback amount claimed by them is on the Revenue as held by the Tribunal in the case of Mahavir Exports v. Commissioner and Peerless Consultancy Services Pvt. Ltd. and the guidelines contained in CBEC Circular No. 60/97-Cus., dt. 8-12-97, we find that in the present case no market inquiries as regards PMV were conducted by the Revenue and the entire case of the Revenue is based upon the figures appearing in audited balance sheet, which we have already held is not the correct method to arrive at the value of fabrics used. It may also noticed here that examination report of the goods conducted by the Customs Officers at the time of export never doubted the PMV and the goods were allowed to be exported. In fact, it is on record that the appellant produced a copy of the shipping bill before the adjudicating authority showing the endorsement regarding inspection and remarks of the officers to the effect that PMV declared was fair. The above plea stands rejected by the adjudicating authority on the ground that there is no estoppel and the peculiar facts as emerging from record were not in the knowledge of Customs at the time of shipment of the goods. As, we have already observed that arriving at the value of the fabrics on the basis of figures in the balance sheet is not correct and there is no independent evidence on record showing the PMV declared to be less than the amount of drawback claim, we find no merits in the above reasoning of the adjudicating authority.
10. As regards the remittance from the foreign buyer it is seen that as per letter dt. 29-1-2000 from the foreign buyer, they had received the export consignment of 500 cartons contain 36000 pieces of trousers in satisfactory condition. The above fact is not being doubted or disputed by the Revenue. The only objection is that the appellant had not received the export sale proceeds within the time limit of six months or within the time extended by RBI. However, it is a fact that remittance were received by the appellant in 16 instalments during the period 28-6-2001 to 28-23-2001(sic). Though the above facts stands corroborated by the statement of accounts of the exporters furnished by the Laxmi Vilas Bank Ltd., the Commissioner has observed that as the said receipts were not within the extended time limit granted by RBI and the receipts were received in piecemeal instalments and through various money exchangers from Dubai, and not from the notifying bank in the export documents, the same cannot be treated as genuine remittance. We find that the appellants had taken a stand even before the RBI that payment from the foreign buyer could not be recovered in time owing to the financial difficulties faced by them at the relevant time as is evident from the correspondence from their end. Even RBI, while turning down their request to further extend the time, directed them to recover the dues in the shortest possible time. In any case the entire realization having been effected by the appellant, time factor cannot reflect upon the genuineness of the same.
11. At this stage, we may refer to Rule 16A of the Customs and Central Excise Duties Drawback Rules, 1995, relied upon by the adjudicating authority. The same is to the effect that where the amount of drawback has been paid but the sale proceeds of export goods have not been realized, within the time period, the drawback shall be recovered. Admittedly, the said Rule is applicable where drawback has already been paid to the exporter and has no application where the claim for drawback is still being considered. This is primarily to check a situation whereby an exporter gets drawback and also does not receive foreign remittance.
12. The Commissioner has referred to the fact that the remittance of the foreign supplier correspondent with the withdrawal by the appellant from their bank at Andheri, and as such, he has concluded that the remittance was arranged by them. However, we find that though the above fact may raise some doubt against the appellant but the same cannot take the place of evidence. There is nothing on record to show by way of evidence that the money withdrawn by the appellant from their banks was rotated and remitted back to the appellant by their foreign buyer. In the absence of any positive evidence to that effect, we cannot uphold the above allegations and findings. Similarly receipt of remittance through various money exchangers and not from the notified bank, by itself cannot lead to inevitable conclusion that the same was arranged. It is well settled law that as long as the remittance has been received from the foreign buyer, which fact is not disputed in the present case, denial of drawback claim is not justified. The appellant’s have referred to and relied upon various decisions of the Tribunal as recorded in last para of the impugned order. The said decisions have not been followed by the adjudicating authority on the simple observation that the present case is based on the concrete documentary evidence. We have already observed that the investigation conducted by the Revenue may raised some doubt but cannot be considered as sufficient positive and tangible evidence so as to dislodge the appellants claim of drawback. In view of the foregoing discussion, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Pronounced in court on 19-12-2006)