Mungad Strips & Alloy Pvt. Ltd Vs Commissioner (CESTAT Delhi)
The CESTAT Delhi allowed the appeals filed by M/s Mungad Strips & Alloys Pvt. Ltd. and M/s Jiji Industries Ltd., setting aside the Commissioner’s order insofar as it applied to them. The impugned order had arisen from a show cause notice issued by the Directorate General of Central Excise Intelligence concerning exports made under the Duty Entitlement Passbook (DEPB) Scheme during December 2010 and January 2011.
The appellants had exported goods described as “Aluminium Alloy Conductors” and, in the case of Mungad, “Cross Linking Agent”, and obtained DEPB scrips from the Directorate General of Foreign Trade (DGFT). Under the DEPB Scheme, exporters receive scrips calculated as a percentage of the Free on Board (FOB) value of exported goods. These scrips can be used to pay customs duty on imports or transferred to other importers. Following an investigation by the Directorate General of Revenue Intelligence (DRI) and DGCEI, it was alleged that the export goods had been grossly overvalued to obtain DEPB scrips of higher value. Based on the investigation, the Commissioner rejected the declared transaction value under Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, re-determined the value of the exports, changed the description of the exported goods, ordered confiscation under Sections 113(d) and 113(i) of the Customs Act, denied the DEPB benefits, demanded customs duty to the extent DEPB scrips had been utilized, and imposed penalties under Sections 114A and 114AA of the Customs Act.
