FOB Value Cannot Be Modified by Customs for Export Incentive Calculations - Transaction Value Prevails

CESTAT ruled that Free on Board (FOB) value is the transaction value agreed between buyer and seller, which cannot be modified by any Customs officer or third party. The Tribunal held that Customs authorities lack statutory power to redetermine FOB values for export incentive calculations, as these incentives (drawback, MEIS, and ROSL) must be paid as a percentage of FOB value per government notifications. The Joint Commissioner's order accepting the declared FOB values was restored, as officers have no authority to direct that export incentives be paid on alternative values. The Tribunal criticized DRI's interference in the adjudication process and dismissed Revenue's appeals. .....

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