[Order per : S.S. Sekhon, Member (T)]. - These Applications and Appeals have been filed by the captioned Sole Proprietorship Concern of Sri Bharat Kumar Mahensaria being aggrieved by the impugned order of the Commissioner of Customs (Port), Kolkata, dated 25-1-2006 and signed on 30-1-2006, vide which the Commissioner has held as follows :-

(i)      Confiscation under Section 113(d), of the goods covered by twelve DEPB shipping bills dated 2-6-1999 and 3-6-1999, where the shipping bills were allowed on provisional assessment basis and were finalised on various dates in the month of July, 1999 by the Additional Commissioner of Customs, DEPB, Kolkata;

(ii)    Imposition of penalty of Rs. 10.00 lakh (Rupees ten lakh) on the appellant company of the Sole Proprietor under Section 114(i) of the Customs Act, 1962;

(iii)   Confiscation under Section 111(o), of the goods imported against six DEPB Licences so obtained in lieu of these exports made on these twelve shipping bills having DEPB Credit of Rs. 1,00,75,882.00 (Rupees one crore seventy-five thousand eight hundred and eighty-two). Since the goods were not available for confiscation, redemption fine of Rs. 25.00 lakh (Rupees twenty-five lakh) was offered;

(iv)   Ordered for recovery of the excess DEPB Credit of Rs. l,00,35,562.00 (Rupees one crore thirty-five thousand five hundred sixty-two) along with the interest accrued thereon, to be realized from the appellant company under Section 28 of the Customs Act, 1962;

(v)     Imposition of a penalty of Rs. 1,00,35,562.00 (Rupees one crore thirty-five thousand five hundred and sixty-two) on the Proprietor of the appellant company under Section 114A of the Customs Act, 1962;

(vi)   Imposition of a penalty of Rs. l0,00,000.00 (Rupees ten lakh) each on the three other noticees who are not before us now.

1.2 After hearing both sides and considering the materials on record, it is found that the appeals could be taken up for disposal after waiver of pre-deposit. Accordingly, the Stay Petitions are allowed. We now proceed to dispose of the appeals itself.

1.3 Relevant facts relating to the matters in brief are as follows :-

(a)     The appellants are traders and deal in import and export of diverse items. M/s. Top Bottom Impex of Singapore (for short ‘foreign buyer’) placed an order for sale and supply of finished glass-beads as per sample provided by them. The appellant company, a merchant exporter, procured the said goods M/s. Nirpra Industries of Kolkata and in the first week of June, 1999, the appellant company exported 7.2 MT of finished glass-beads on 125 bills under claim of DEPB on post-export basis in terms of Para 7.25 EXIM Policy. 1997-2002, at a unit price of US$ 162 (equivalent to Rs. 6897.80 approx.) per kg to the foreign buyer. Exports were allowed on provisional assessment made, “Let Export Orders” were passed, after the goods were examined and appraised, representative’s samples were drawn and shipments were affected.

(b)     The appellant company and the foreign buyer are unrelated; price of the said goods was the sole consideration for the sale; the sale price was not subject to any condition and no part of the proceeds of the subsequent re-sale, disposal or use of the goods by the foreign buyer accrued directly or indirectly to the appellant company and these matters are not in dispute.

(c)     After receipt of the said goods and being satisfied with the same, the foreign buyer remitted full export through proper banking channels. On production of the Bank Realization Certificate by the appellant company and due verification, provisional assessments were finalized on various dates in the month of July, 1999 as per order of Additional Commissioner of Customs, DEPB passed in File No. S-60(DE)(Misc.)-356/99A with the approval of the Commissioner of Customs (Port), Kolkata. Orders of provisional assessment and final assessment were recorded on the shipping bills.

(d)    After final assessments, the appellant company applied for and was issued six DEPB (transferable) licences by the DGFT Authorities. The said DEPB licences were issued on post-export basis and were transferable and were transferred by the appellant company fully in accordance with law.

(e)     In January, 2000, the Commissioner ordered an enquiry for determination of the Present Market Value (PMV) of the said goods. Statements of various persons including Sri Nirmal Saraswat, a partner of M/s. Nirpra Industries (Supplier of the said goods to the appellant company) and Sri Kishan Goswami were recorded. Sri Nirmal Saraswat initially stated that he supplied the goods. Thereafter, he denied this admission, but such denial was retracted before the Magistrate. Sri Kishan Goswami stated that he was in noway connected with procurement, sale or export of the said goods. Statements of about ten other persons were recorded under Section 108 of the Customs Act. Enquiries were made by Jaipur Customs wherefrom the said goods were made by Customs and Central Excise Authorities at Siliguri, the place of Sri Ajay Ojha and report was obtained. Enquiry was also conducted in Singapore by Indian High Commission where the foreign buyer is situated and where the goods were shipped. Statements of Accounts of the appellant company, Nirpa Industries (Supplier of the appellant company), M/s. Madho Prasad Mahabir Prasad (another supplier of glass-beads), S.K. Impex, Rahul Industries, B.K. Trading Company, C.G. Impex, Kumar Trading, Akay Exports, Calcutta Trading Company, I.G. International and B.B. Leather were procured from the respective buyers. In addition to the above, searches were conducted at various places including the places of the appellant company, its supplier and supplier’s supplier and various documents were seized. In course of such investigation, price lists of several exporters such as Master/Interiors Pvt. Ltd., New Delhi and Hi-Fashion Accessories, New Delhi and export invoice of Nilam Exports, Varanasi, Shipping Bill of Benaras Beads Ltd. and computer print out of Mumbai Customs were collected. On 20-7-2000, show cause notice was issued by the Department alleging that a conspiracy was hatched by the proprietor of the appellant company, Sri Bharat Mahensaria, Sri Ajay Kumar Ojha to obtain huge DEPB credit through gross over invoicing of export of finished glass-beads. It was further alleged that the source of the procurement of the said goods could not be identified and the enquiry revealed that price of the said goods normally ranges between Rs. 70/- to Rs. 100/- per kg. The noticees were called upon to explain as to why the said goods should not be confiscated under Section 113(d) of the Customs Act, why the goods imported against the DEPB licenses should not be confiscated and why penal action should not be taken against the noticees under Sections 112(a) & (b) and 114 of the Customs Act. This notice (here-in-after referred to as 1st S.C.N.) was supplemented by two addendums dated 2-8-2005 and 3-8-2005. The noticees in the 1st SCN were - (i) M/s. Rammapati Exports (appellant company), (ii) Bharat Kumar Mahensaria (Proprietor of the appellant company), (iii) Nirmal Saraswat (supplier of the goods to the appellant company), (iv) Ajay Kumar Ojha (said to be the supplier to the appellant company’s supplier), (v) Kishan Goswami (unrelated to the export) and (vi) M/s. N.L. Mullick & Co. (clearing agent of the appellant company). The same persons are made parties to the 2nd SCN now impugned.

(f)      The appellant company as well as other noticees to 1st SCN, by their respective replies, denied the allegations. Sri Nirmal Saraswat confirmed having sold the goods to the appellant company at the declared invoice price and having received the entire sale proceeds from the appellant company. Sri Kishan Goswami reiterated his statement recorded under Section 108 of the Customs Act that he was not in any way connected with and had no role in procurement/purchase of goods or their export. Sri Ajay Ojha in his reply dated 10-8-2000 to the first SCN confirmed having supplied glass- beads to Sri Nirmal Kumar Saraswat (supplier of goods to the appellant company) and having received full sale price thereof. He further contended that it was a domestic sale from a domestic supplier to a domestic purchaser and neither any provision of Customs Act/FERA/Foreign Trade Regulation Act was involved nor he violated any provisions of law.

(g)     Personal hearings of first SCN were held on 26-12-2000, 4-1-2001, 6-2-2001 and 7-2-2001. In course of these hearings the appellant company, its proprietor was represented by their advocate. The supplier, Nirmal Saraswat (partner of Nirpra Industries) appeared in person before the Commissioner and again confirmed having supplied the goods to the appellant company at the declared price and filed certified copies of various documents relating to the transaction, namely, the Contract for Sale, Invoices, Payment Receipts etc. Sri Kishan Goswami also appeared in person and reiterated that he had no role of any nature whatsoever in procurement/pur- chase/export of the said goods.

(h)    The appellant company filed Written Submissions dated 14-2-2001 making detailed submissions on all the issues involved and produced all relevant documents/materials in support of its submissions. In its reply and Written Notes and during personal hearings, it was inter alia submitted by the appellant company as under :-

(i)       The declared price of USD per Kg was genuine and correct and the said exports were made in the usual course of business and the price was the sole consideration.

(ii)     Full exports proceeds have already been realised by the appellant company from the foreign buyer and Bank Realisation Certificates have also been filed by it.

(iii)    Glass-beads are of several types and qualities and international market price of Glass-beads range from USD 150 to USD 5000 per Kg.

(iv)    Samples of the goods exported by the appellant company were drawn by the Department and the same should be got examined by any Government-approved examiner and an expert valuer and market price of the said sample should be ascertained. Without the aforesaid, there can be absolutely no scope to make any surmise as regards any alleged over-valuation.

(v)      The Customs Authorities themselves had assessed the shipping bills initially on provisional basis and thereafter, on examination of the relevant facts and documents and after being satisfied about PMV, the assessments were finalised by the Department. The said orders were not appealed against by any one and attained finality.

(vi)    DEPB licences were issued to the appellant-company on post-export basis and these were freely transferable and the appellant company, in the normal course, transferred the said licences in open market. The said DEPB licences have not been cancelled or suspended by the Licensing Authorities nor any proceeding has been initiated in that regard and the said licences are very much in existence and are valid. The Customs Authorities cannot enter into the arena as to whether the said licences were issued by the licensing authorities lawfully and correctly.

(vii)   In fact, the Commissioner of Customs himself had conducted an enquiry in September, 1999 as regards alleged over-invoicing, and after completion of the said enquiry, a letter was addressed by the Commissioner to the Central Board of Excise and Customs on 21-9-1999 stating that there was no over-invoicing.

(viii)  Sample of the goods exported by the appellant company was not shown by the Customs Authorities either to any trader or to any expert valuer.

(ix)    The period of limitation for review/revision of the final assessment has already been over and it is not open to the Customs Authorities to reopen the said final assessments and/or adjudications already made.

(x)      In terms of the circulars issued by the Central Board of Excise and Customs, the Customs Authorities are even otherwise estopped from contending anything contrary to the PMV already accepted by the Department during final assessment.

(xi) Apart from the aforesaid, various other submissions were made by the appellant company and it was submitted that the Show Cause Notice was wholly illegal and invalid.

(i)      In the said earlier proceedings, in support of the transaction value, the appellant company inter alia relied on the following :-

(j)      The said 1st SCN was thereafter decided by the Commissioner vide Order-in-Original dated 20-4-2001. After being fully satisfied. the proceedings initiated by the said 1st Show Cause Notice dated 20-7-2000 and its addendums were dropped against all the noticees.

(k)     The Department did not file any appeal against dropping of proceeding against co-noticees, inter alia, against Sri Ajay Ojha and Sri Kishan Goswami but filed an appeal before the Tribunal, as far as the appellant company was concerned. The Tribunal vide its Order No. A-17/KOL/2002 dated 29-1-2002, held that the Order passed by the Commissioner was correct, legal and sustainable and accordingly, upheld the same and dismissed the appeal filed by the Revenue. The Department filed Civil Appeal therefrom before the Hon’ble Supreme Court, which was also dismissed.

(l)      After dismissal of the civil appeal by the Hon’ble Supreme Court, the Department filed an application for Rectification of Mistake (ROM) before the Tribunal. The said application was dismissed by the Tribunal vide Order dated 3-7-2003.

1.4 After disposal of the appeal by the Tribunal, the Civil Appeal filed by the Revenue in the Hon’ble Supreme Court and the Rectification Application thereafter, filed by this Tribunal, the present notice (termed as 2nd SCN) was issued resulting in the impugned order now before us. From a perusal of the impugned order, especially the paras 5, 5.1 and 5.2 it is found that those have recorded the purported reasons of an enquiry being made by the Special Investigation Branch of the Kolkata Customs in case of three other such exporters of glass-beads, and CBI Examining Officers’ Wing (EOW) were investigating the exports made by the present appellant company and the other three exporters. After investigation, certain evidences and statements were found, which were felt to be relevant in the case of exports made by the appellant company on the twelve shipping bills. These additional so-called evidences are recorded in extensio in paras 6 to 12 of the impugned order. Therefore, it is found that the present proceedings are raising the very same charges as made in the 1st SCN, which has been decided in favour of the assessee concurring the findings of the Commissioner, Tribunal and the Hon’ble Supreme Court. The reasons for the new evidences now considered to be substantive, as is evident from para 13.1 of the impugned order, are reproduced below :-

“13.1. It therefore appeared that, these new evidences which were substantive in nature were good enough to have a fresh look into the case in terms of the Hon’ble Madras High Court judgment in the case of Union of India v. K. Siraj reported in 1993 (65) E.L.T.-25(Mad.).”

1.5 The Commissioner’s Order relies on the statement of one Shri Ajay Kumar Ojha recorded on 26-8-2002 to bring on record, the conduct of Shri Nirmal Saraswat, and non-supply of any goods to this person, Shri Saraswat is confirmed. On perusal of this statement as recorded in the order, it is apparent that no statement of Shri Nirmal Saraswat has been recorded as regards this new material now brought on record by the statement of Shri Ajay Kumar Ojha. The earlier statement of Shri Nirmal Saraswat of having supplied the goods to the appellant company has been accepted by the Commissioner while adjudicating the 1st SCN. No appeal was filed by the Revenue in those proceedings against the said Order of the Commissioner having accepted the role of Shri Nirmal Saraswat and supply of goods. Now the statement of Shri Ajay Kumar Ojha dated 26-8-2002 relied upon and extracted in para 6.2 of the impugned Order, cannot implicate the present appellant company in any manner, as it does not relate to them. In any fashion, the statement is not corroborated in any manner. Therefore, the concurrent findings of the Commissioner, Tribunal and the Apex Court as regards the present appellant company, cannot be disturbed by this statement, now relied upon as substantive evidence. The absence of any fresh statement of Shri Nirmal Saraswat leads to a conclusion that the statement of Shri Ojha which was recorded after release on bail by the Customs Authorities, is a doubtful piece of confession, and cannot be a reason to upset the findings already settled in favour of the appellant company. In any case, this new statement dated 26-8-2002 of Shri Ojha does not implicate or incriminate the present appellant company in any manner.

1.6 A perusal of the impugned Order at para 7.1 thereof, wherein the statement of Shri Kishan Goswami has been relied upon, reveals that the alleged new evidence is only an admisson now brought on record to indicate the 18 MTs of glass-beads having been procured by the Proprietor of the appellant company herein, at the rate of Rs. 125.00 per Kg., from one Shri Anil Kumar Mahensaria who purchased it from one Shri Suresh Khandelwal of Jaipur. The statement also as a revelation, recorded that Shri Bharat Mahensaria, the Proprietor of the appellant company herein, had exported about 7 MTs of glass-beads during June, 1999 out of the 18 MTs of glass-beads so procured by him. This statement and the so-called fresh material is considered. If this be a fact, then the Commissioner in his impugned Order in para 12 has correctly observed as under :-

“12. It thus appeared that the glass-beads were exported at a grossly inflated price of USD 162/- per Kg. (C&F) (approximately Rs. 7000/-) whereas, on the basis of value at Rs. 28/- per Kg., the value of glass-beads (weighing 7.2 MT) came to Rs. 2,01,600/- and the resulting DEPB credit came to Rs. 40,320/- (@ 20%) as against total credit of Rs. 1,00,75,882/- claimed/received by the exporter. This had resulted in fraudulent availment of excess DEPB credit to the tune of Rs. 1,00,35,562/- [Rs. 1,00,75,882/- - Rs. 40,320/-].”

Therefore, the Commissioner is not relying upon this revelation regarding the procurement of 7 MTs of glass-beads at the rate of Rs. 125/- per Kg. from Shri Anil Kumar Mahensaria, while arriving at the figures of valuation-claim of DEPB. When the Commissioner himself is not accepting this version of Shri Kishan Goswami, it is difficult for us to accept the same now recorded from Shri Goswami. The other aspect of his statement as regards Shri Bharat Mahensaria, the Proprietor of the appellant company having exported about 7 MTs in June, 1999 out of the said 18.2 MTs procured by him, cannot be accepted because the statement made by Shri Kishan Goswami in the beginning, as recorded in para 7.1 of the impugned Order to the effect - “ ……..he did not have any role in export of glass-beads at any point of time by any exporter or himself. He also did not have any role in the purchase/sale of glass-beads…….”, would be false. It is difficult to make out which part of the statements made by Shri Goswami is false. If we accept the opening paragraph as relied upon by the Commissioner, then it would be evident and clear that the statement of Shri Goswami about his procurement of 18.2 MTs of glass-beads @Rs. l25/- per Kg., and about the export of 7 MTs out of this quantity by Shri Bharat Mahensaria, cannot be accepted. More so, when there is no material in the statement to bring forth as to how Shri Goswami derived his knowledge that Shri Bharat Kumar Mahensaria would have used 7 MTs for the exports made by him in June, 1999, the statement of Shri Kishan Goswami has also to be considered in the background of the conduct and role of this document. In para 20(ii) (c) of the impugned Order, the Commissioner has recorded the submissions of noticees that Shri Kishan Goswami was an accused in four cases registered by CBI and that being as Co-Director with the appellant-proprietor herein in a company named as M/s. Santosa Overseas Private Limited, wherein he had disputes with the appellant company over accounts of that firm and this dispute went upto the police due to animosity between the Proprietor and Shri Goswami. These statements have been recorded by the Commissioner. But the Commissioner still considers Shri Goswami’s statement to be that of an impartial witness. The statements had been recorded for a long time and Shri Goswami had been reported to be inimical to the appellants’ interest. In fact, Shri Goswami had been given the very said notice and was granted a personal hearing. It has been observed at para 17 of in the impugned Order by the Commissioner to the effect, “...On 15-9-2005, Shri Kishan Goswami appeared for hearing before the Commissioner, Customs (Port) and pleaded that whatever he had to say he had said earlier and he had nothing else to say except all along he had helped the Department……..” This plea as recorded by the Commissioner would indicate to us that Shri Kishan Goswami is an unreliable witness whose evidence in giving the subsequent statement as relied upon by the Commissioner as substantive new evidence, emanates out of his desire to help the Department. Such deponence and statements recorded from them lead us to reopen the case which has been arrived at in favour of the appellant company by the concurrent findings of the Commissioner, Tribunal and Apex Court, and the Rectification Application filed has since been rejected.

1.7 The third statement relied upon is that of one Shri Ashoke Kumar Gupta of M/s. Benaras Beads Ltd. and the documents furnished by him. On this statement, the appellant-company’s submissions are as follows:-

“(a)   The Appellant states that the following price lists, print outs from the Customs, adjudication order of Delhi Customs, invoices and shipping bills of exports were already on record during the adjudication of the 1st SCN :-

(i)      Catalogue and price list of Hi Fashion, Delhi showing price upto $139.50 per Kg.;

(ii)     Catalogue and price list of Master Stroke Private Limited, Delhi;

(iii) Computer print out from Bombay Custom showing export price $119.98 per kg;

(iv)    Export shipping bills and invoices of Neelam Exports, Banaras;

(v)     Price list of Motibala Industries;

(vi)    Statement of six persons said to be local agents, traders of glass beads.

(vii)   Invoice & shipping bill of Banaras Beads Limited.

(viii)  Investigation report of CC (Port) dated 21-9-1999 sent to Board confirming no overvaluation in export of glass-beads with the price range of Rs. 6,000-6,500 per kg.

(ix)    Order of adjudication bearing No. 2/99 dated 16-10-1999 in case of Rainbow International passed by Delhi Customs confirming the price of $ 165 per kg.

When the export invoices and shipping bills of Banaras Beads Limited were on record during the first adjudication proceeding, the statement of Ashok Gupta of Banaras Bead, repeating the same, by any stretch of imagination, cannot be said to be a new evidence or new mateial.

(b)     In the said purported statement dated 14-3-2002, Shri Ashok Kumar Gupta has merely alleged that ‘so far as he knew, there was no manufacturer in India who make Glass-beads valued at Rs. 7,000/- per kg.” and that ‘there was hardly any market of Glass-beads in Singapore and that their yearly export of Glass-Beads to Singapore would hardly be USD 1000’. The said statement is merely a personal view of Ashok Gupta and it was contrary to the result of the material obtained by the investigations and adjudications by the Customs Authorities.

(c)     In investigation report dated 21-9-1999 sent to the Board, the Customs Authorities had themselves confirmed that there was no over-valuation in export of Glass-beads with price range of Rs. 6,000/- to Rs. 6,500/- per kg. Not only this, in adjudication order dated 16-10-1999 passed by Delhi Customs, the price of USD 165 per Kg. was accepted. The said exports were in fact made by the Appellant to the foreign buyer in Singapore and full export profits were also realised by the Appellant. This position is not at all in dispute.

(d)     There is nothing in the impugned order to show that what were the credentials of Sri Gupta and as to whether he was an office bearer of any association of manufacturers/exporters or as to whether he was a manufacturer of Glass-beads of high value etc. The said purported statement of Sri Gupta is no material at all and is straightaway liable to be rejected.

The purported statement of Sri Ashok Kumar Gupta in any event has no bearing on the export made by the Appellant. Sri Ashok Kumar Gupta was neither supplier of the said goods nor he is office bearer of any association of manufacturer’s/exporter’s of glass beads. At best he can say about the price of his goods. Furthermore, evidences relied upon in the 1st SCN being the catalogues of various exporters, Mumbai Customs print out and the prices given by the Customs in their 1st SCN believe his statement. From those statements, Price List, Catalogues, Mumbai Customs Print Out etc. relied upon by the Customs in the 1st SCN, it is apparent that prices of the glass-beads vary and go upto the price range of Rs. 7,000/- per kg. and more.”

Considering the statements, documents and the submissions made, we find that there is no material of substantive nature now brought on record by the efforts of recording the statements from Shri Ashok Kumar Gupta, as all these materials were available and relied upon in the first show cause notice and which has been considered and a decision in favour of the appellant company has been taken after due consideration.

1.8 As regards the other new substantive evidence of Sales Tax Way Bills and other purported evidences mentioned in paras 9, 10, and 11 of the second show cause notice and para 9 of the Order impugned, the same pertains to a period of March, 1999. The present exports were made in June, 1999 and there is no material on record to relate the export of the goods obtained/mentioned in these documents by the present exporters. In fact, the only evidence relied upon in the second notice is the statement of Shri Kishan Goswami relating to the goods of 18 MTs under export obtained from Shri Anil Kumar Mahensaria, which has not been accepted by the Commissioner adjudicating the present proceedings and has been found to be of no evidentiary value. Therefore, no evidentiary value as regards the present proceedings can be ascribed to these documents for the exports in the present case effected in June, 1999.

1.9 Once it is found that no fresh material/evidence exists which can be relied upon, to reopen the charge of over-valuation settled in favour of the appellant company by the concurrent findings of the Commissioner, the Tribunal and the Supreme Court, the proceedings initiated ab initio by the issue of the second show cause notice and the Orders pursuant thereto, have to be not permissible and not upheld.

2.1 Considering the plea of the appellant company that the show cause notice as well as the impugned Order dated 25-1-2006 are void ab initio and wholly without jurisdiction on the grounds of res judicata based on the decisions, namely -

(i)            (S.C.) (Para-5);

(ii)           2005 (11) SCC 251; - Amarendra Komalam v. Usha Sinha

(iii)         (T);

(iv)          (T);

(v)           (T);

(vi)          (T);

is well founded and accepted in the facts of the cases to call for and hold that the proceedings are not permissible in law. The reliance on the decision of the Honourable High Court in the case of K. Siraj reported in (Mad.), is not called for, when it is found that the statements now relied upon, do not in any manner induce any confidence on reliability or bring out any fresh substantive evidence and the documents of M/s. R.G. Sales now relied upon, do not and cannot relate to the consignments exported, as it is seen that since in the addendums issued to the first SCN dated 3-8-2000 relied upon and the statements of a representative of M/s. R.G. Sales dated 9-1-2000, 14-2-2000, 1-6-2000 and 7-3-2000, it had neither been claimed by M/s. R.G. Sales that they had sold glass-beads, nor they had confirmed the goods from the samples drawn from the lots exported to be similar or of same quality as their goods. The same position is as regards the invoices of M/s. Vishal Handicrafts from whom M/s. R.G. Sales had purchased their goods. This would be very relevant as glass-beads have a price spread over a wide-band width, which even the Commissioner had found and reported to the Board, vide his representations which were got to be deleted by the Rectification Applications made by the Revenue, having been rejected. In this view of the matter, we cannot find reliance on the Hon’ble Madras High Court’s decision to be relevant and empowering the Department to initiate and reopen the present proceedings. The judgement is found to be permitting the enquiry under Sections 107 and 108 of the Customs Act, after issue of the Notice. They did not consider the issue as to whether an earlier notice which was settled by the Commissioner, Tribunal -and the Supreme Court by the concurrent findings, could be reopened or not.

2.2 The exports were effected on provisional assessment basis and have been finalised thereafter. No market survey/report of any kind has been obtained by showing the samples to experts challenging the valuation is brought on record, to upset the finalisation of the Assessment Order. The glass-beads have been demonstrated to be having a price spread over a wide-band width. Based upon the material as relied upon by the Revenue themselves and enquiries made by the Commissioner and reported to the Board, a demand/supply position would influence the prices considerably. The grounds of reopening the finalised assessments did not exist here and therefore, the reopening of the assessments was not called.

2.3 The question of liability to confiscation under Section 113(d) of the Customs Act, 1962 and penalty under Section 114 of the said Act on grounds of over-valuation of DEPB exports has not been upheld by the Hon’ble Apex Court in the case of Prayag Exports Pvt. Ltd. v. CC (EP), Bombay reported in (T), which has been upheld by the Hon’ble Supreme Court by its decision reported in (S.C.). A Review Petition filed by the Revenue against this dismissal of their Appeal by the Apex Court, was also dismissed as reported in & A114 [Commissioner v. Prayag Exports Pvt. Ltd.]. The Review Petition was filed by the Revenue after the decision in the case of OM Prakash reported in (S.C.). On the other hand, the Tribunal in the case of Ramayan Impex v. Commissioner of Customs (Exports), Nhava Sheva reported in (Tri.-Mumbai), has also found and held as follows :-

“2.2. The ld. D.R.’s submission that goods simplicitor when brought to Customs area, are liable to confiscation under Section 113(d) of the Customs Act, 1962 has been considered and we find that the goods under Section 113(d) would be liable to confiscation only when they are brought to a Customs area and when they are so brought contrary to a prohibition under the Customs Act, or any other Act for the time being in force. In the present case, since we have come to the conclusion that there was only, if at all a preparation to export and not an attempt to export, the bringing of the goods simplicitor to the Customs area under a Shipping Bill filed by carting the goods after permission from the Port authorities, is not cause for their liability to confiscation under Section 113(d), since no prohibition under the Customs Act, 1962 would be found by us in this carting of goods. The goods which are covered by a Shipping Bill as in this case, can be brought to and carted to the Customs area, they have not acquired the status of Export Goods till they traverse Section 51 stipulation & thereafter are ready to be taken on a vessel and therefore are not prohibited in any manner under the Customs Act, 1962. Examining the provisions under DEPB, it is found that in the case of Kobian ECS India Pvt. Ltd. v. CC, Mumbai - (Tri.), the Tribunal had held that a declaration for DEPB is not a declaration which should be read as a prohibition under the Customs Act, 1962 read with Foreign Trade (Development and Regulation) Act, 1992 since that scheme of DEPB has been announced under powers of Section 19 of the Foreign Trade (Development and Regulation) Act, 1992 and not under Section 2 of the said Act. Since the prohibitions under the Customs Act, 1962 and or any other Act could not be found, we find no merits in the plea of the ld. D.R.”

Therefore, we find no reason to uphold the confiscation of the goods under the provisions of Section 113(d) of the Customs Act, 1962 for exports under DEPB claim. In the circumstances, the imposition of penalty on the present appellant company and that of redemption fine as arrived at, are not warranted. In any case, separate penalties on the Proprietor as also on the Proprietor Firm as ordered by the Commissioner, cannot be upheld.

2.4 The Commissioner totally erred in holding that the goods imported against the said six DEPB licences were liable to confiscation under Section 111(o) of the Customs Act and on that basis, demanding redemption fine of Rs. 25.00 lakh (Rupees twenty-five lakh) in respect thereof. The wholly illegal and arbitrary nature of the said purported demand is also evident inter alia from this that the Commissioner has not even bothered to find out as to why and what were the imports of the said goods against whom this order, is passed, were being sought to be confiscated and upon whom the said demand of redemption fine was being sought to be levied. In so far as the appellants are concerned, they have not been proved to have made any import whatsoever under the said DEPB licences; they cannot be liable to pay the said purported redemption fine which even otherwise is wholly illegal and invalid for the reasons mentioned above.

2.5 The Commissioner erred in holding that DEPB credit of Rs. 1,00,35,562.00 (Rupees one crore thirty-five thousand five hundred and sixty-two) along with interest was liable to be realised from the appellant company under Section 28 of the Customs Act, Firstly, Section 28 of the Customs Act can have no application whatsoever for realisation of any such DEPB credit, as credit is not duty as held by the Larger Bench of this Tribunal in the case of Essar Steel Ltd. v. Commissioner of Central Excise, Vishakhapatnam reported in (Tri. - LB). Secondly, the DEPB credit under the DEPB licences was allowed by the Statutory Authority under the Export and Import Policy in exercise of their powers. The said DEPB licences have not been cancelled and the same all along and still now continue to be valid. The Customs Authorities have no jurisdicton at all to amend, modify the DEPB credits allowed under the Scheme, by the DG Authority. No demands contrary to the said DEPBs can be raised by the Customs Authorities. This issue is already covered by the decisions of this Hon’ble Tribunal in (Kobian ECS India Pvt. Ltd. v. CC), (Suresh Enterprises v. CC) and (Vrundavan Exports v. CC). In any event, there is absolutely no basis or material for raising any such demands. Hence no duty demands and/or interests on the Propriety Firm can be upheld.

2.6 When we find that no duty demands could be arrived at or confirmed by the Commissioner, the imposition of penalty under Section 114A of the Customs Act, 1962 on the Proprietor of the Exporting Firm cannot be arrived at and upheld.

2.7 The clear-cut findings arrived at earlier by the Commissioner and the Tribunal on merits, that there was no evidence to substantiate the charge, of overvaluation and the Hon’ble Supreme Court not upholding the Revenue’s appeal, was also not inclined to interfere with the said findings. Therefore, the so-called new material/evidence not being relatable or relevant as found to uphold the charge of over-valuation, leads to the setting aside of the impugned Order and the notice.

2.8 Before parting with this appeal, we would like to observe that the appellants’ lament of being singled out and getting a biased treatment by the Customs House, has force to be heard.

2.9 The Order not sustainable in law on merits and emerging out of bias, are to be set aside and the appeals allowed.

3.1 The Applications and the Appeals are disposed off accordingly.

(Pronounced on 7-8-2006)