TaxTMI 
TaxTMI 
2025 (7) TMI 1924
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....r Rule 6 of the 2007 Rules. Consequently, he disallowed the drawback and Refund of State Levies [ROSL] to the appellant. He also held the export goods were liable to confiscation under section 113(i) of the Act. Since the goods had been released provisionally during investigation and exported, he imposed a redemption fine of Rs. 15 lakhs in lieu of confiscation under section 125 of the Act. He also imposed a penalty on the appellant under section 114(iii) of the Act. He also ordered Rs. 5,00,000/- from the Bank Guarantee submitted by the appellant to be appropriated towards redemption fine and penalty. 2. We have heard learned counsel for the appellant and learned authorized representative for the Revenue and perused the records. 3. The fundamental isssue which needs to be examined in this appeal is if the FOB value of export goods can be redetermined by the Customs Officer under section 14 of the Act read with the 2007 Rules which provide for determination of the value. We find that the expression 'FOB value' is not defined under the Act but it is commonly understood as it is defined in INCOTERMS. INCOTERMS are universally accepted terms of international commerce between buy....
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....tion value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bil....
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....cy of the declared value after the said enquiry in consultation with the exporter. (iii) The proper officer shall have the powers to raise doubts on the declared value based on certain reasons which may include - (a) the significant variation in value at which goods of like kind and quality exported at or about the same time in comparable quantities in a comparable commercial transaction were assessed. (b) the significantly higher value compared to the market value of goods of like kind and quality at the time of export. (c) the misdeclaration of goods in parameters such as description, quality, quantity, year of manufacture or production. 6. Thus, the value under section 14 of the Act and the 2007 Rules and the transaction value (FOB value) are distinct and different. Duties have to be calculated on the value determined under section 14 and the 2007 Rules. Unless the transaction value (FOB value) is rejected by the proper officer, value under section 14 shall be the same as the transaction value. If the proper officer rejects the transaction value under the 2007 Rules and redetermines it, the two will be different and duties have to be paid o....
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....nt Commissioner. Since we found that the re-determination of the FOB value cannot be sustained, the confiscation, redemption fine and penalty also cannot be sustained for this reason alone. 10. We also proceed to examine the scope of section 113(i). It provides for confiscation of export goods which do not correspond in value or any material particular with the entry made under the Customs Act, i.e., the shipping bill. The relevant part of the section reads as follows: 113. Confiscation of goods attempted to be improperly exported, etc. The following export goods shall be liable to confiscation:- .. (i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under section 77; 11. Goods which do not correspond in any material particular or value to the declaration in the Shipping Bill are liable to confiscation. If the goods are declared as 'X' and they are found to be 'Y', or if they are declared to be of quantity 'A' and they are found to be of quantity 'B', they will be liable to confiscation. The good....