Export bond duty recovery must follow declared export value, not later departmental valuation, when exports do not materialise.

Goods cleared for export under bond but not actually exported remained liable to duty recovery, but the duty base had to be the value declared in the export declaration at the time of clearance. The later sale price could not be substituted, and the department's valuation lacked stated basis and was treated as arbitrary. The settled position applied was that, where export does not materialise after clearance under bond, duty is recoverable on the declared export value rather than on a later departmental valuation. The demand therefore required re-quantification on that basis.

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Issues: Whether excise duty on goods cleared for export under bond, but not actually exported, was payable on the value declared in the export documents or on the later value adopted by the department.

Analysis: The goods were cleared for export under bond and the value was declared at the time of such clearance. When export did not materialise, duty became recoverable in terms of the bond, but the recoverable duty had to be worked out on the value declared at clearance. The later sale price of the goods could not be substituted as the duty base, and the departmental valuation of Rs. 6000 PMT had no stated basis and was therefore arbitrary. The settled position applied by the Tribunal was that for goods cleared for export and not exported, the value declared in the export declaration is the relevant value for duty recovery.

Conclusion: Duty was required to be computed on the value declared in the export declaration and not on the departmental value of Rs. 6000 PMT. The demand was therefore liable to be re-quantified, and the appeal succeeded to that extent.

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