The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for adjudication on the determination of the eligible amount of drawback on change in rate while exporting.
The appellants M/s S.G. International, the exporter and Shri Mohd. Sadique Muchhada, Power of Attorney holder of the said exporter challenged the Order in-Appeal passed by the Commissioner of Customs ( Appeals ), JNCH, Nhava Sheva, Mumbai-II.
The Appellants had exported goods of FOB value of Rs. 6,40,08,136.70/- in eleven Shipping Bills ( S/Bs ) and balance 9 C/Bs, all dated 22.10.2018 claiming total drawback for Rs.11,71,805/-, refund of Integrated Goods and Service Tax ( IGST ) of Rs.42,32,438/- and Refund of State Levies ( ROSL ) of Rs.6,91,458/- being taxes/duties suffered on the export products.
The goods covered by the shipping bills were duly assessed and cleared for export by Customs following the due procedure. The drawback, IGST refund and ROSL amounts as indicated above have been paid to the appellants after the “Let Export Order” grant and shipment of the goods for export.
Based on intelligence that the exporter had mis-declared the description of the goods and overvalued the exports to avail of an inadmissible higher amount of drawback, refund of IGST, ROSL, the Commissioner ( General ), JNCH, Nhava Sheva had directed the custodian CFS-JWR, Panvel to put on hold the goods exported by the appellants vide his letter dated 25.10.2018.
The Custodian that the goods had already been gated out from Container Freight Station ( CFS ) and were found to have been already shipped on board to Lagos by Maersk Line India Pvt. Ltd., in container No. MSKU0011063 on 30.10.2018. The shipping line was then directed by the Commissioner vide letter dated 7.11.2018, to recall back the container.
The appellants had requested Customs authorities to release the export goods presenting copies of the purchase orders and Bank Realization Certificates. Investigations conducted by the Customs in the matter involved testing of the representative samples of the export products to ascertain the actual composition of the goods for determination of appropriate classification of the goods and determining respective drawback rate, market survey of the export products to identify the value of the goods in terms of Customs Valuation ( Determination of Value of Export Goods ) Rules, 2007.
It was submitted that while determining the value as per residual method under Rule 6 ibid, it was nowhere explained how it can be construed that the market survey report prices can be adopted as a reasonable means consistent with the principles and general provisions laid down in these Rules, since the local market price of the export goods may not be the only basis for determining the value of export goods.
It was argued that the conclusion arrived by the learned Commissioner of Customs ( Appeals ) on this valuation issue in the impugned order is not supported by any evidence or factual detail, to fasten the penal liability for such over valuation on the appellants and thus the impugned order rejecting the transaction value by confirming the redetermination of assessable value of export goods arrived at by the original authority in order is contrary to the legal provisions and the manner provided under Customs Valuation ( Determination of Value of Export Goods ) Rules, 2007.
Further, for the limited extent of determination of eligible amount of drawback, arising on account of change in drawback rate alone and not on account of redetermination of the FOB value, the two-member bench of Mr S K Mohanty, Member ( Judicial ) and Mr M M Parthiban, Member ( Technical ) remanded the case back to the original authority. The Tribunal allowed the appeals filed by the appellants by setting aside the impugned order.
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