Mahajan Fabrics Private Limited Vs Principal Commissioner/Commissioner of Customs (Export) (CESTAT Delhi)
In the matter above-mentioned CESTAT Delhi Bench held that customs officers are stranger to the contract between the exporter and the overseas buyer and has no locus standi to change the FOB value of the goods. The appellant filed a shipping bill dated 22.12.2018 in Inland Container Depot, Tughlakabad to export 598 cartons of readymade garments. These goods were examined by the Special Intelligence and Investigation Branch officers of the Depot found that the shipping bill indicated the FOB value of the goods as Rs. 4,25,17,566/- on which a drawback of Rs. 10,62,939/- and rebate of State levies of Rs. 5,06,603/- were claimed. The matter was investigated came to the conclusion that the goods had been overvalued in order to claim excess Drawback and ROSL. Based on the market inquiry, the value of the exported goods was re-determined under Rule 6 of Customs Valuation (Determination of Export Goods) Rules 2007 after rejecting the declared value under Rule 8 of the Valuation Rules. Thereafter, Order-in-original was passed. In appellate proceedings Commissioner (Appeals) upheld the order.
After considering the submissions from both sides CESTAT observed that the short question to be answered is if the Commissioner (Appeals) was correct in upholding the order-in-original re-determining the FOB value of the export goods under Rule 6 of the Valuation Rules read with Section 14 of the Customs Act, 1962 and whether confiscation of the goods u/s 113 and the redemption fine imposed u/s 125 and the penalty imposed u/s 114 were correctly upheld by the Commissioner (Appeals). In the case of M/s JBN Apparels Pvt LTD, in Customs Appeal No. 50127 of 2024, this Tribunal examined the issue at length and held that the FOB value is free on board value, i.e. the value agreed between the buyer and the seller for the goods to be imported and that no stranger to the contract including the Customs Officer has any right to modify the FOB value because it is the transaction value. The power of the officers to determine the value as per section 14 of the Act and the valuation Rules is only to determine the assessable value of the goods. There is no reason to take a different view in this appeal. Accordingly, order-in-original was wrong in re-determining the FOB value invoking section 14 and the Valuation Rules.
