Over-invoicing of export goods can trigger confiscation where the declared value is not the true export sale consideration.

Over-invoicing of export goods may amount to an attempt to export prohibited goods where export conditions are not complied with, because prohibited goods under the Customs Act include goods exported contrary to statutory conditions. The text states that Section 113(d) can apply to fraudulent over-invoicing and permit confiscation. It also states that an exporter must declare the true export value under Section 14, meaning the price at which like goods are ordinarily sold in international trade, and not merely the amount expected from the overseas purchaser. On that basis, an inflated export declaration is improper and may sustain confiscation, fine, and penalty.

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Issues: (i) Whether over-invoicing of export goods amounts to an attempt to export prohibited goods within the meaning of Section 113(d) of the Customs Act, 1962. (ii) Whether an exporter is required to declare the value of goods on the basis of the price expected from the overseas purchaser, or the true export value determined under Section 14 of the Customs Act, 1962.

Issue (i): Whether over-invoicing of export goods amounts to an attempt to export prohibited goods within the meaning of Section 113(d) of the Customs Act, 1962.

Analysis: Section 113(d) covers goods attempted to be exported contrary to any prohibition imposed by or under the Customs Act or any other law in force. The definition of prohibited goods in Section 2(33) includes goods the export of which is subject to prohibition, and also goods exported without complying with the conditions subject to which export is permitted. Section 11 further recognises that prohibition may be absolute or conditional. On that basis, non-compliance with export conditions, including deliberate over-invoicing in a case showing fraudulent conduct, can attract confiscation.

Conclusion: Over-invoicing of export goods can amount to an attempt to export prohibited goods and is within the mischief of Section 113(d).

Issue (ii): Whether an exporter is required to declare the value of goods on the basis of the price expected from the overseas purchaser, or the true export value determined under Section 14 of the Customs Act, 1962.

Analysis: Section 2(41) defines value by reference to Section 14, and Section 14 adopts the price at which like goods are ordinarily sold in international trade where the parties have no interest in each other and price is the sole consideration. Read with Section 18 of the Foreign Exchange Regulation Act, 1973 and Rule 11 of the Foreign Trade (Development and Regulation) Rules, 1993, the exporter must disclose the full and true export value and affirm receipt of that value in the prescribed manner. The relevant value is therefore the true export sale consideration, not an inflated figure unsupported by evidence.

Conclusion: The exporter must declare the true export value as determined under Section 14, and not merely the amount expected from the overseas purchaser; the over-invoiced declaration was not accepted.

Final Conclusion: The customs authorities were justified in treating the inflated export declaration as improper and in sustaining confiscation, fine, and penalty, and the appeal failed.

Ratio Decidendi: Over-invoicing of export goods, when the declared price does not represent the true export sale consideration, violates the statutory export conditions and permits confiscation under the Customs law framework.

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