Texcomash Export & Sh. N.K. Rajgarhia Vs Commissioner of Customs (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, in Texcomash Export & Sh. N.K. Rajgarhia vs Commissioner of Customs, decided an appeal challenging Order-in-Original No. 6/88/2005 dated 13.07.2005. The case pertained to the denial of duty drawback on the allegation that exported goods had been overvalued and had not reached the declared Russian destination, but were instead delivered in Dubai.
Background and Proceedings
The appellants exported 29 shipments of children’s garments through ICD Tuglakabad, New Delhi (November 1993–June 1994), and 9 shipments of ladies’ garments through Mumbai Customs House (September–October 1994). During examination at export, Customs suspected over-invoicing to claim inflated drawback. Exports were allowed provisionally while market enquiries were conducted. The assessing authority later reduced the value to ₹210 per set for drawback purposes, and this was upheld on appeal. However, in revision, the matter was remanded for fresh adjudication. The drawback was eventually paid at the reduced value through cheques totaling ₹88,81,082.
After further appeals and revisions, the FOB value was enhanced by the appellate authority to ₹242 per set through Order No. 406/1999 dated 26.03.1999, and the department accepted this valuation. Despite this, a Show Cause Notice dated 07.01.2000 was issued proposing confiscation of the goods and disallowance of drawback under Sections 75 and 76 of the Customs Act read with Rules 16 and 16A of the Drawback Rules, alleging the shipments were never delivered to Russia.
