TaxTMI 
TaxTMI 
2025 (6) TMI 1285
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....2 [Impugned order] passed by the Commissioner of Customs (Appeals), New Delhi, whereby he rejected the appeals filed by both the appellants and upheld the order-in-original dated 08.12.2020 [OIO] passed by the Additional Commissioner. In the OIO, the Additional Commissioner decided the proposals made in the show cause notice dated 5.4.2018 [SCN] issued to Jayantah, Sunil and two other persons. 2. Jayantah is an exporter of readymade garments and it exported garments under various shipping bills. Receiving intelligence that Jayantah was exporting sub-standard garments and over valuing them in order to avail inadmissible duty drawback and other incentives, the Directorate of Revenue Intelligence [DRI] investigated the matter and thereafter....
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....n fine in lieu of confiscation of the goods covered under Shipping Bill mentioned in Annexure-KT, Annexure-KP & Annexure-JTC should be imposed on them under Section 125 of the Customs Act, 1962 on M/s KKR & M/s JTC. (v) Whether penalty should be imposed under Section 114 and Section 114AA of the Customs Act, 1962 upon M/s KKR, M/s JTC, Sh. Amit Kumar, Prop of M/s Arora Exports, Sh. Sunil Kumar r/o H. No. 34 Lucky Enclave, St. No. 2, Near Basti Jodhewal Chowk, Ludhiana and Sh. Sunil Kumar, resident of H. No. 63, Mahavir Nagar, Ferozepur Road, Ludhiana. (vi) Whether (vi) export incentives viz, duty drawback and other export incentives of M/s KKR & M/s JTC & Sh. Amit Kumar, Prop of M/s Arora Exports, pending disbursal should ....
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....lower and, therefore, the FOB value was re-determined. The remaining proposals of confiscation of fine and penalties flow from this re-determination of FOB value. 10. The FOB value was purportedly rejected under Rule 8 of the Customs Valuation (Determination of export Goods) Rules, 2007 [Valuation Rules] and re-determined under Rule 6 of the Valuation Rules read with Section 14 of the Act. Consequently, all the export benefits were also ordered to be re-determined as per the FOB value re-determined by the Additional Commissioner and this decision was upheld in the impugned order. 11. The question which arises is what is the FOB value and if it can be re-determined by the Customs Officers. FOB value is not defined in the Act. It refers....
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....reads as follows: 14. Valuation of goods. (1)For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf: Provided that such transaction value in ....
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....tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation.-For the purposes of this section- (a) "rate of exchange" means the rate of exchange-(i)determined by the Board, or(ii)ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b)"foreign currency" and "Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)." 14. Gener....
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....termination of FOB value by the Additional Commissioner is without any authority of law. The Commissioner (Appeals) erred in upholding such re-determination of FOB value. 16. The next question is if the drawback and other export incentives must be paid on the FOB value or on the value re-determined by the officer. If the drawback schedule provides for payment of drawback as a percentage of FOB value, it should be paid so. No officer has the power to modify the drawback schedule in any particular case and hold that it shall, instead, be paid on some value determined by him/ her. 17. A doubt may arise as to why drawback and other export incentives have been made payable as a percentage of the FOB value and not on the basis of the assess....