(1.) THESE appeals are filed by M/s. Veeyem Exports and the Commissioner of Customs, Thiruvanathapuram against order of the Commissioner (No. 9/2004 -Cus., dated 28 -9 -2004). M/s. Veeyem Exports were engaged in export of steel pegs (float pins of carburetor) under claim for DEPB as per EXIM Policy 1997 -2002. Based on a communication from the Joint Director General of Foreign Trade, Kochi dated 21 -3 -2002 expressing doubt about the genuineness of value of the steel pegs declared in Shipping Bills by M/s. Veeyem Exports, investigation was initiated. Searches were conducted at the premises of M/s. Veeyem Exports at MG Road, Ernakulam on 25 -8 -2003 and statement was recorded from Shri P.M. Musthafa, Proprietor. Enquiries were conducted with M/s. Siko Carburetor Parts, New Delhi, a distributor who allegedly supplied steel pegs exported by M/s. Veeyem Exports. Statements were recorded from manufacturers of the steel pegs including the one who supplied to M/s. Siko Carburetor Parts. DRI which investigated the case obtained a report letter No. 08/152 -334/2003 dated 22 -10 -2003 from the Senior Manager of Dubai Cargo Village & Airport Free Zone Customs informing Consul (Economic), Consulate General of India, Dubai stating that the total value declared to Dubai Customs for the clearance of the consignments received from M/s. Veeyem Exports under 10 Airway Bills came to 17221 US $. At the prevalent exchange rate this worked out to Rs. 8,21,442/ -. Prototype of the steel pegs exported was recovered from Shri P.M. Musthafa. Information gathered at the importers end revealed that the importer had declared US $ 1476 as the value of consignments covered by Airway Bill No. 1573262103 and 3 Shipping Bills No. 106902, 904 and 905. This amount worked out to Rs. 70,405/ - at the relevant exchange rate of Rs. 47.70 per US $. The exporter had instead declared an amount of Rs. 2,96,86,834/ -. The pro -rata value paid by the importer in respect of Shipping Bill No. 1069903 came to Rs. 14081/ - and admissible DEPB credit to Rs. 1831/ -. As against this, the exporter had already availed DEPB credit of Rs. 7,83,514 on Shipping Bill No. 1069903. It appeared that the exporter had mis -declared the value of the consignment in the various Shipping Bills to avail inadmissible DEPB credit contravening provisions of the Customs Act, 1962 (the Act). Accordingly a Show Cause Notice was issued to M/s. Veeyem Exports.
(2.) AFTER due process of law, the Commissioner found that the exporter had mis -declared the quantity of steel pegs exported. He did not find evidence for the exporter having inflated the value of the consignments. He ordered recovery of excess credit of Rs. 4,14,065/ - availed and utilized by the exporter against the Shipping Bill No. 1069903 dated 15 -1 -2002 along with applicable interest. He also imposed a penalty of Rs. 10,00,000/ - on M/s. Veeyem Exports under Section 114 of the Act.
(3.) IN this appeal filed by the Revenue, it is submitted that the show cause notice had proposed to re -determine the total number of steel pegs exported in 35 consignments under 10 Airway Bills from 2,06,23,769 to 87,55,555 and to re -determine the export value as Rs. 2,23,26,665/ - as against the declared export value of Rs. 28,32,80,585/ - and consequently to re -determine the admissible DEPB credit as Rs. 29,02,466/ - as against Rs. 3,68,26,476/ - as per the export documents. It was proposed to adopt the price of Rs. 8,21,442/ - declared by the consignee at the port of import as the value of all consignments and to accordingly determine the pro -rata export value of the consignment covered under Shipping Bill No. 1069903. It was proposed to re -determine DEPB credit due at Rs. 7,83,514/ - in respect of this Shipping Bill. In adjudication, the Commissioner concluded that the price declared by the exporter ranging approximately from Rs. 9.50 per piece for larger pegs and Rs. 14.30 per piece for smaller pegs were reasonable and fair. As per the Order -in -Original, the quantity and value of the steel pegs exported and DEPB credit admissible were as follows :