TEX-AGE Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THESE are applications for waiver of pre deposit of drawback amounting to Rs. 1,21,73,997/ - sought to be recovered from M/s Tex -Age, the first applicant, another amount of drawback amounting to Rs. 2,82,080/ -and imposition of a fine of Rs. 1,10,00,000/ - on Tex -Age, Rs. 25.00 lakhs each on Subhash Choudhary and Satish Choudhary, proprietors/partners of M/s Tex -Age, penalty of Rs. 2.00 lakhs on Om Prakash Jhunjhunwala, Rs. 2.00 lakhs on Prithvi Singh Kuntal @Gulla, Rs. 2.00 lakhs on Deepak Khetawat and Rs. 4.00 lakhs on A win Exim Co and Rs. 4.00 lakhs on Ekta Exports under Section 114(i) and (iii) of the Customs Act, 1962.

(2.) THE facts of the case are that the applicant Tex -Age has exported ready -made garments from Nhava Sheva through Port under claim of drawback and DEPB Scheme, which on subsequent intelligence and investigation were found to be highly over -valued and accordingly, Show Cause Notices were issued seeking to redetermine the PMV grossly misdeclared and recovered back the duty drawback sanctioned and paid and to deny the DPEB credit along with proposal for confiscation of goods already exported and imposition of penalties under Section 114(i)and (iii) of the Customs Act, 1962.

(3.) THE Show Cause Notice was based on the evidence in the form of statements recorded from the supplier of fabrics and garments to M/s Tex -Age and the declarations made by M/s Tex -Age to Indo -Arab Chamber of Commerce which showed that there was a vast difference between the prices declared to Indo -Arab Chamber of Commerce and the purchase bills found in the possession of the suppliers of the goods and their statements that the goods were highly over invoiced and that there were no written orders, nor any purchase bills were issued, and that the purchase bills were generated only after the investigation by DRI was started. Further, it came to the notice that though the exports were made to countries other than Dubai i.e. Netherlands, Australia etc invariably in all the cases, the goods were off loaded at Dubai and cleared to firms which on investigation were found to be belonging to the exporters themselves. This was confirmed from the enquiries made from Consulate General of India, Dubai and from the visiting cards found in the premises of M/s Mohd Essa Al Marri Trading Est., Dubai on which the name of Satish Choudhary was printed and was actively associated with M/s Tex -Age. Evidence was also gathered during the search of the office premises of one of the firms of Subhash Choudhary i.e. M/s Master Forms Pvt. Ltd., where two sets of invoices were recovered, one showing value at Rs. 6/ - per piece whereas the value declared in the Shipping Bill was US 2 per piece. For procurement of readymade garments, payments were made by cheques, but the same were discounted by two to three persons. Based on the above evidence, total FOB amounting to Rs. 10,53,40,623/ - declared for the purpose of drawback was revised to Rs. 75,81,720/ - and the PMV was revised to 60,65,376/ - in respect of 69 Shipping Bills. Similarly in respect of DEPB Shipping Bills PMV was revised to Rs. 24,45,965/ -. The Commissioner demanded back the drawback amount already paid amounting to Rs. 1,21,73,997/ - and Rs. 2,82,080/ - from M/s Tex -Age and rejected the DEPB credit of Rs. 95,85,068/ -. These goods were also ordered to be confiscated under Section 113(d) and (i) of the Customs Act, 1962. However the goods were not available for confiscation. Penalties of the amounts mentioned in the order above were imposed on the various applicants.