2025-VIL-2010-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Export valuation, Re-determination of export value, Confiscation of export goods – The consignment of readymade garments detained on suspicion of overvaluation - Dept found the goods were made of blended fabric instead of 100% cotton as declared, necessitating change in the drawback and ROSCTL schedules. The authorities confiscated the goods, imposed redemption fine, penalties under Sections 114(iii) and 114AA - Whether the re-determination of the FOB value by the authorities was valid – HELD - The re-determination of FOB value was not valid. The Customs authorities did not follow the procedure in Rule 8 of the Customs Valuation Rules to first reject the declared transaction value before re-determining it under Rule 6. The remittance of full declared value by the overseas buyer as per the BRCs and confirmation by the supplier regarding the transaction value were sufficient evidence to accept the declared FOB value - The goods were liable to confiscation under Section 113(i), (ia) and (ja) as they did not match the description declared, leading to incorrect claim of drawback and ROSCTL. However, since the goods were already provisionally released on execution of a bond, they were not available for actual confiscation. The authorities should have imposed a fine in lieu of confiscation instead of confiscating the goods – The Revenue appeal is partly allowed by upholding the re-determination of drawback and ROSCTL based on the correct fabric composition, and restoring the penalty under Section 114(iii). The re-determination of FOB value, confiscation, redemption fine, and penalty under Section 114AA are set aside – Ordered accordingly
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