M/S. OM PRAKASH BHATIA versus COMMISSIONER OF CUSTOMS, DELHI

Citation: [2003] SUPP. 1 S.C.R. 412 · Decided: 07-07-2003 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Dismissed
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Judgment (excerpt)

A 
MIS. OM PRAKASH BHATIA 
v. 
COMMISSIONER OF CUSTOMS, DELHI 
JULY 7, 2003 
B 
[M.B. SHAH AND ARUN KUMAR, JJ.] 
Customs Act, I 962: 
Section 2(23)-Export of good~-Over invoicing-If an attempt to export 
C prohibited goods-Held: Yes, since over invoicing of goods is not mentioning 
true sale consideration of goods which amounts to violation of condition for 
export of goods. 
Section 14-Export of goods-Value of-For purpose of assessment-
D Value as under Section 14 or value of goods exporter expects to receive by 
sale of goods in overseas market-Held: Exporter has to declare full export 
value of the goods exported as under section 14-Criterion is the price at 
which such or like goods are ordinarily sold or offered for sale in the course 
of international trade where the seller and buyer have no interest in business 
of each other and price is the sole consideration for sale-However, if full 
E export value of goods is not ascertainable, the value of goods is which the 
exporter expects to receive on the sale of the goods in the overseas market. 
F 
Section I I 3(d)-Applicability of-Held: When goods attempted to be 
exported is contrary to any prohibition imposed under any law for the th1e 
being in force, goods are liable to confiscation. 
Section 76-Drawback-Claim-Relevant consideration-Held: ls the 
market price of goods prevailing in the country and not price of goods exporter 
expects to receive from the overseas purchaser. 
Sections 2(23), 2(41), 14, 76 and l/3(d)-Exporter seeking export of 
G goods-Over-invoicing of goods-Claim for drawback~'lubsequent withdrawal 
of claim-However, the exporter not leading any evidence that export value 
mentioned in the shipping bill was true sale consideration-Finding of the 
department that the exporter had initially claimed drawback by deliberately 
over-invoicing the goods-Order for confiscation of goods and imposition of 
H redemption fine and levy of penalty-Tribunal upholding the order-On appeal, 
412 
0.1'. 1311/\ Tl/\ 1·. COMMR. OF CUSTOMS 
413 
held: On facts of the case. the finding arrived al by the authorities below A 
reasonable and does not call for interference. 
Words and Phrases: 
"Value in relation to any goods "-Meaning of in the context of Section 
2(41) of the Customs Act, 1962. 
"Prohibited goods"-Meaning of in the context of Section 2(33) of the 
Customs Act, 1962. 
Appellant-exporter seeking to export 28000 pieces of ladies skirts@ 
$10.25 per piece filed shipping bills. The quantity of skirts was found to 
B 
be 21184 pieces and the market price of the skirts was ascertained to be C 
Rs. 45 per piece, total value of goods coming to Rs. 9,53,280. Exporters 
then claimed a draw back of Rs. 21,87,800 on the consignment@ Rs.78 
per piece. During enquiry, exporters submitted that the market price of 
Rs. 45 per piece was acceptable to them and withdrew their claim for 
drawback. Commissioner of Customs found that the exporters had initially D 
claimed drawback by deliberately over-invoicing the goods. It then passed 
an order for confiscation of goods and imposed redemption fine and levied 
penalty. Aggrieved appellant filed an appeal which was dismissed holding 
that the over-invoicing of the goods for exportation was an offence under 
the Customs Act, 1962. Hence the present appeal. 
Appellant contended that Section 113( d) is not applicable to the facts 
of the instant case as the goods are not prohibited goods; and that exporter 
is not required to declare the market value of the goods which he would 
fetch in the market in India but the value of the goods which he is expected 
to receive from the overseas purchaser. 
Respondent contended that over-invoicing is not permitted as it is 
in violation of the statutory provisions of the Act; and that at the time of 
export, the exporter has to give correct value of the goods which is the 
value of goods which he would fetch in market in India or from overseas 
purchaser. 
Intervenor contended that in some cases, exporter may get much 
higher value of the goods than the market price prevailing in the country 
and, therefore, merely because higher export value is mentioned, it cannot 
be inferred that it is not the true sale consideration. 
Dismissing the appeal, the Court 
E 
F 
G 
H 
414 
SUPREME COURT REPORTS [2003) SUPP. 1 S.C.R. 
A 
HELO: I. Section 2(33) of the Customs Act, 1962 defining prohibited 
goods states that if there is any prohibition of import or export of goods 
under the Act or any other
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