TEXCOMASH EXPORTS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE issue involved in the appeal filed by M/s. Texcomash Export is whether the value of goods exported by them was overvalued by them.

(2.) BRIEFLY stated the facts are that the Appellants filed a Shipping Bill (SB) No. 4462, dated 12 -7 -1994, under claim for duty drawback, for export of 16000/ - pieces of men's shirts made of 100% viscose for export to Russia. The price declared by them was Rs. 2,48,25,878.40 and the drawback claimed was Rs. 155.16 per piece. A show cause notice dated 8 -8 -1994 was issued to them for denial of drawback claim and for confiscation of goods as the inquiry conducted from Shri Rajan Gupta of M/s Dress "N" Style, Vasant Place Market, New Delhi and M/s Sneh Libas, Vasant Place Market New Delhi revealed that the wholesale price of the shirt would be about Rs. 50/ - to 75/ - per piece and retail price would be about Rs. 90/ - to 110/ -. The Commissioner, Customs, New Delhi under the impugned order, directed appropriation of Rs 2 lakhs towards fine from the bank guarantee furnished by the appellants for the export of goods in question, denied the drawback to the appellants under Section 76(1) (b) of the Customs Act and imposed a penalty of Rs. 50,000/ - under Section 114(iii) of the Act, holding that Shri Rajan Gupta of M/s Dress 'N' Style had specifically stated, in his opinion dated 20 -7 -1994, that a shirt with 100% viscose of normal finish with deor design would cost Rs. 50/ - to Rs 65/ -; that his retraction on cross examination was not convincing which is an after thought.

(3.) SHRI A.K. Jain, learned Advocate, submitted that the opinion of Shri Rajan Gupta was obtained on 20 -7 -1994 whereas the sample was drawn only 30 -8 -1994; that the file does not show that any sample was drawn at any other time. He further, submitted that once the Adjudicating Authority allows the cross examination of a departmental witness, he is duty bound to take into account the answers made by him during cross examination for deciding the charges levelled in the notice; that once a departmental witness resiles from his earlier statement during his cross examination, his earlier evidence cannot be relied upon. He relied upon the decision in Keshoram Bora v. State of Assam, AIR 1978 S.C. 1096 wherein it was held by the Supreme Court that "when once a prosecution witness is declared hostile the prosecution clearly exhibits its intention not to rely on the evidence of such a witness and hence his version can -not be treated as the version of the prosecution itself. Reliance was also placed on the decision in Balkan and Anr. v. State of Rajasthan, 1976 Crl L.J. 828 (Raj.) wherein the Rajasthan High Court held that no part of the evidence of a hostile witness could be used. The learned Advocate also referred to the decision in the case of Union of India v. Abdidkadu Abdulgani Hasmani, 1991 (55) E.L.T. 497 (Guj.) in which the Gujarat High Court held that the stage of recording statements under Section 108 of the Customs Act arises only when an inquiry is started either for confiscation of goods or for imposing penalty. The learned Advocate contended that deposition in cross -examination is to be regarded as a statement under Section 108 of the Act. He also mentioned that an opinion (that too in the form of a letter) without any mention therein of any statutory provision and without any signature of any customs official is of no legal consequence and reliance was placed on the decision of the Appellate Tribunal in the case of Kartar Singh v. Collector of Customs - Order No. A/218/87 -NRB, dated 1 -4 -1983 that when departmental witness does not appear for cross -examination, his evidence is to be deleted from the record and reliance was placed on the decision in the case of Nemimth Appayya Hanamannanam -AIR 1966 Mys 154.