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TMI Blog2020 (3) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... The present case is of exports. In case of exports, the cost of freight and transit insurance are not part of the transaction value at the Port of export i.e. the Indian Port where the goods are exported. It includes only the Free on Board (FOB) value. This is the value for the purpose of Section 14 and export duty must be calculated on this FOB value. The argument of the appellant is that out of this FOB value, the element of duty also must be deducted to determine the assessable value. In other words, their argument is that the FOB must be taken as cum duty price and the assessable value must be calculated backwards so that whatever is charged by them from the overseas buyers must be treated as including the export duty. A plain readi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well on behalf of the appellant. Hence, heard Ld. DR and perused the records. As the matter pertains to 2011, the same is being disposed of even in the absence of any representation of the appellant as it is very old and falls in a very narrow compass. 3. The appellant exported iron ore fines under various shipping bills. On export of Iron Ore Fines, there was an export duty @ 5% advalorem during the relevant periods. Shipping bills were filed and duty was paid accordingly. Thereafter, the appellant challenged the assessments of the shipping bills before the first appellate authority, arguing that the amount which they have received from their customers on FOB basis must be taken as cum duty price, accordingly the assessable value must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia 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 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 beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board), C F (Cost and Freight) and CIF (Cost Insurance and Freight). FOB refers to Free on Board that means the moment the goods are put on board the vessel, the seller is free i.e., all costs incurred after the goods are put on board are on the buyer s account. Therefore, the freight, transit insurance, etc. are on account of the buyer. C F refers to the FOB price + cost of shipping from the place of export to the place of import. Thus, this cost includes the FOB price + the freight. CIF includes the FOB price + freight + transit insurance. Contracts can be entered into between the buyers and sellers in terms of FOB, C F and CIF or any other terms. The question which arises is which of these is the correct transaction value as far as impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted to determine the assessable value. In other words, their argument is that the FOB must be taken as cum duty price and the assessable value must be calculated backwards so that whatever is charged by them from the overseas buyers must be treated as including the export duty. A plain reading of Section 14 would not show such a change in the valuation methodology is permissible under the law. The appellant cannot, on their own, claim a new valuation methodology for their exports when the law specifically lays down that transaction value at the place of export is the assessable value for determining the export duty. But, it appears that a wrong practice was in vogue of taking the FOB price as cum duty price upto 2008. This has been mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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