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TMI Blog2025 (3) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... available to the exporters. The case is remanded back to the Adjudicating Authority for this matter. 6.3. The Bonds and Bank Guarantees only related to redemption fine under Section 125 of Customs Act, 1962 and penalty under Section 114 of Customs Act, 1962 will be released. 6.4. The Bond and Bank Guarantee related to any export benefits available shall be adjudicated via de novo adjudication order. 2. Customs Appeal No. 50127 of 2024 is filed by JBN Apparels Pvt. Ltd [JBN]. 3. Customs Appeal No. 50128 of 2024 is filed by Aastha Apparels Pvt. Ltd [Astha]. 4. Customs Appeal No. 50129 of 2024 is filed by JBB Apparels Pvt Ltd [JBB]. 5. Customs Appeal No's. 50301, 50302 and 50303 of 2024 are filed by the Revenue. 6. The Joint Commissioner had, in his Order-in-Original, dropped all the proceedings against the three exporters-JBN, Astha and JBB-in respect of the shipping bills which were investigated. The operative part of the order is as follows: ORDER (i) I drop the proceedings initiated in respect of Shipping Bills Nos. 1807036, 1807017 & 1807046 all dated 05.02.2019; 1807069 & 1807053 both dated 05.02.2019; shipping Bill Nos. 1710107, 1710004 & 1710110 all dated 31.01.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls Pvt. Ltd. and two shipping bills of M/s JBN and found that the goods and their details matched with the shipping bills. On 21.02.2019, the officers of ICD Pipava examined the goods covered by three shipping bills filed by M/s JBB and also found the goods matched with the declaration. 11. However, on the suspicion that the goods were overvalued, they were seized and later provisionally released on bond and were allowed to be exported. Samples of the seized goods were taken to the market to enquire about their value. Summons were issued and statements were recorded and proceedings were initiated on the suspicion that the goods were overvalued. The appellants had waived the requirement of show cause notice but made written submissions and attended personal hearings. After considering the submissions, the Joint Commissioner passed the Order in Original dropping all proceedings. 12. Aggrieved by the order-in-original, the department filed appeals before the Commissioner (Appeals) on the following grounds: (i) The investigations by income tax showed four export firms including the three appellants herein were involved in trade related money laundering without proper stock in books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cion, however strong, cannot take place of evidence. (vi) The overseas inquiry report by DRI is not relevant to the matter at hand. The exporters, therefore, prayed that the impugned order may be set aside and the order of the Joint Commissioner may be restored. 15. The three appeals filed by Revenue against the impugned order assert that the acceptance of value in the 8 shipping Bills by the Commissioner (Appeals) was not correct. The Commissioner (Appeals) accepted the value on the grounds that the department had not adduced any evidence to quantify over-valuation and that the exporter explained the reason of difference in his valuation and the market value and that bank realization certificates were also available. (i) The Commissioner (Appeals) ignored the investigation report which shows that the supply chain in this case from Punjab to Delhi showed no movement of goods and only invoices were raised. (ii) He also ignored that overseas inquiry shows the substantial evidence to prove overvaluation of the goods which emerged out of DRI investigation. (iii) Bank realization of export proceeds cannot be a ground for accepting value. It is, therefore, prayed that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is and that settles the rights and liabilities of the buyer and seller in the transaction. In short, FOB value is the transaction value of the goods agreed to between the buyer and the seller. Do the Joint Commissioner, Commissioner (Appeals) or any other officer of Customs have the power to re-determine the FOB value? 20. FOB value, as discussed above, is the transaction value i.e., the price paid or to be paid for the goods to be exported by the overseas buyer. It is the consideration for the goods which are to be exported. It is the product of negotiations and the contract between the buyer and the seller -whether it is a formal written contract or an informal one. The exported goods are the consideration which the overseas buyer would receive and the price is the consideration which the exporter would receive. Therefore, this price has to be determined only by the buyer and seller. Consideration, as per the Indian Contract Act, need not be adequate for the goods. It can be higher or lower and so long as some consideration is paid the contract is valid. There is a privity of contract between the buyer and the seller and they alone can decide the terms of contract and in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n living in Delhi imports a luxury car from his friend, 'B' in UK for, say GBP 1,000/-. This is the consideration which 'A' will have to pay to 'B' and the car is the consideration which 'B' will give to 'A'. When the car is imported, the proper officer, finding that the transaction price is too low, rejects it and re-determines the value as, say,GBP 5,000/-. The customs duty will have to be calculated on the re-determined value of GBP 5,000/- and the importer 'A' will have to pay duty accordingly. However, the transaction value will continue to be GBP 1,000/-as was agreed to between A and B. Neither can A remit more for the car nor can B demand GBP5,000/- to be remitted on the ground that the Customs had re-determined the value. Therefore, the FOB value cannot be modified by anyone including any Customs officer. Nothing in the Customs Act confers any power on anyone to modify the transaction value between the buyer and seller-be it FOB, C&F or CIF or on any other terms. If the export incentives are based on FOB value, does any Customs officer have the power under the law to order that the export benefits shall instead be paid on the basis of some other value determined by the off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y particular manufacturer or particular person carrying on any process or other operation, and interest if any payable thereon; (aa) for specifying the goods in respect of which no drawback shall be allowed; (ab) for specifying the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub-section (1) or interest chargeable thereon; (b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary; (c) for requiring the manufacturer or the person carrying out any process or other operation] to give access to every part of his manufactory to any officer of customs specially authorised in this behalf by the Assistant Commissioner of Customs or Deputy Commissioner of Customs to enable such authorised officer to inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or otherwise the statements made in support of the claim for drawback. (d) for the manner and the time within which the claim for payment of drawback may be filed; (3) The power to make rules conferred by sub-section (2) shall include the power to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his presumption and both the Joint Commissioner and the Commissioner (Appeals) also proceeded under the same wrong presumption (although based on evidence found they had not modified the FOB value). The Committee which reviewed the impugned order also proceeded under this wrong presumption. A plain reading of the Customs Act and the FT(D&R) Act would have shown all these officers that they had no such powers under them. The only power under the Customs Act is to determine the assessable value of the goods and not to change the FOB value. 31. All three export incentives in dispute-drawback, MESI and ROSL are to be paid as a percentage of FOB value as per the notifications issued by the Central Government under the Customs Act and the FT(D&R) Act and no officer has the power to order that they should instead be paid as a percentage of any other value. 32. It also needs to be pointed out in this case that the bank realization certificates have been received in these cases confirming that the amount as per the FOB value have been received as remittances from the overseas buyers by the exporters herein. 33. One of the strange grounds taken in the appeals filed by the Revenue before C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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