Over-Invoicing Violates Export Norms

The Supreme Court held last week that intentional over-invoicing of goods to be exported would amount to illegal transaction in foreign currency.

The court, therefore, upheld the imposition of redemption fine and penalty on a garment exporter by the Customs in the judgment. (The Om Prakash Bhatia vs Commissioner of Customs case, Delhi.)

In this case, 28,000 pieces of skirts were sought to be exported at the rate of $10.25 per piece. The export value was mentioned as Rs 1.21 crore.

The market price of such skirts was ascertained to be Rs 45 per piece and on that basis the total value of the goods came to be Rs 9.53 lakh.

 

The exporter claimed a drawback of Rs 21.87 lakh on the basis that the value of the skirt was Rs 78 per piece. During the probe, the exporter admitted that the market price was Rs 45 per piece and withdrew the claim for drawback. But the rest of the issues remained.

Two questions arose in this case, stated the Supreme Court judgment delivered by Justice MB Shah and Justice Arun Kumar. Whether over-invoicing of the goods for export would mean attempt to export