Declared FOB value cannot be reduced without evidence of fictitious export proceeds; DEPB credit and penalty findings failed.

Declared FOB value in export documents cannot be reduced merely because it exceeds the domestic purchase price where there is no evidence that the export proceeds were fictitious or not realised. The Court found the Revenue's allegation of inflated or misdeclared value unsupported by the record, noting that export documents and bank realisation certificates showed receipt of the declared proceeds. Fixing a lower FOB value on the basis of the manufacturer's purchase price was arbitrary, and the precedent cited on drawback did not control a DEPB claim on these facts. The declaration was accepted as genuine, DEPB credit was upheld on the declared export value, and confiscation and penalty could not stand.

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Issues: Whether the declared FOB value of exported goods was inflated or misdeclared so as to justify reduction of DEPB credit and imposition of confiscation and penalty.

Analysis: The Revenue's objection rested on the difference between the domestic purchase price and the declared FOB value. The Court found that there was no evidence on record to support the allegation that the FOB value was excessive or not genuine. The export documents and BRCs showed receipt of the declared export proceeds, and there was no case that the export price had not in fact been realised. The adjudicating authority's fixation of a lower FOB value on the basis of the manufacturer's purchase price was held to be arbitrary and unsupported by evidence. The Court also held that the market value declaration was within permissible limits and that the relied upon precedent concerning drawback did not govern a DEPB claim on the facts of the case.

Conclusion: The declared FOB value was accepted as genuine, the allegation of misdeclaration failed, and the assessee was held entitled to DEPB credit on the declared export value; the penalty and confiscation orders could not stand.

Ratio Decidendi: In the absence of evidence showing that the declared export proceeds were not actually received or that the FOB value was fictitious, the export value cannot be reduced merely by comparing it with the domestic purchase price for the purpose of denying DEPB benefit.

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