2026-VIL-1115-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Modification of Assessment of Shipping Bills after Exportation of Goods – Post export of goods, the Commissioner issued show cause notice alleging overvaluation of goods and sought to re-determine the value and reject the declared value under Rule 8 of the Customs Valuation Rules and deny the DEPB claims - Whether the assessment of shipping bills can be modified after the goods have already been exported – HELD - The assessment cannot be modified after exportation. Once the goods are exported, they cease to be export goods as defined under section 2(19) of the Customs Act, 1962, and therefore there cannot be any further assessment of the shipping bill. The process of assessment is completed the moment the proper officer issues an order allowing the goods to be exported. The assessment can only be modified through specific methods available under law - The Department did not file any appeal before the Commissioner (Appeals) within the prescribed time, which is the only proper method available to modify an assessment of already exported goods. The Commissioner had no power to modify the assessment through an order in an original proceeding after the goods were exported. Therefore, the entire order modifying the assessment of the shipping bills was without authority and deserved to be set aside - The impugned order is set aside and the appeal is allowed - Denial of DEPB Scrips based on Re-determined Value under Customs Valuation Rules - The exporter had declared goods at certain FOB values in the shipping bills and obtained DEPB scrips from the DGFT as a percentage of the declared FOB values. The Commissioner subsequently re-determined the value of exported goods under Rule 8 of the Customs Valuation Rules at a lower rate and denied the DEPB claim, ordering recovery of customs duty to the extent the DEPB scrips were utilized - Whether the denial of DEPB scrips and recovery of duty can be ordered based on re-determination of value under the Customs Valuation Rules – HELD – The DEPB scrips are issued by the DGFT as a percentage of the FOB value, which is the transaction value agreed between the exporter and the overseas buyer. The FOB value is not defined in the Customs Act but represents the price at which the exporter exported the goods to the importer. If a customs officer re-determines the value under the Customs Valuation Rules for the purpose of assessing duty, he is only determining the assessable value and not modifying the transaction value. The transaction value remains the FOB value as per the agreement regardless of what value the Customs officer determines for duty purposes. Since DEPB scrips are issued based on the FOB value and the exporter is required to bring remittance based on the transaction value, the re-determination of assessable value by the customs officer has no impact on the DEPB claim. The Customs officer has no locus standi to issue or deny DEPB scrips as these are issued by the DGFT. Therefore, the Commissioner erred in denying the DEPB claim and ordering recovery of duty paid using DEPB scrips - The impugned order denying DEPB scrips is set aside - Confiscation of Goods Already Exported - Whether goods which have already been exported can be confiscated under section 113 of the Customs Act, 1962 – HELD – The confiscation of already exported goods is not permissible under section 113. Export goods are defined under section 2(19) as goods which are to be taken out of India to a place outside India. Once the goods are taken out of India and exported, they are no longer export goods within the meaning of the Act. The jurisdiction of the Customs Act extends only to the whole of India and not beyond. Therefore, once the goods move out of India, they fall outside the jurisdiction of the Act and cannot be subjected to confiscation proceedings. Section 113 provides that certain export goods shall be liable to confiscation, but this applies only to goods which are still export goods and within the jurisdiction of the Act. The confiscation order confiscating goods which were already exported is outside the scope of the Act - The impugned order for confiscation of exported goods is set aside - Penalty under Section 114A based on Recovery of Duty – HELD - Section 114A provides for imposition of penalty if duty is not paid or short paid by reason of collusion or any willful statement or suppression of facts and if it is ordered to be recovered under section 28. Since the appeal is held against the Revenue on the question of recovery of duty, the essential foundation for imposing penalty under section 114A is absent. The penalty is consequential to the recovery order and if the recovery order itself is not sustainable, the penalty cannot be sustained - The penalty imposed under section 114A is set aside - Penalty under Section 114AA for False or Incorrect Declaration - Whether penalty under section 114AA can be imposed where the declared values represent the actual transaction values agreed with the overseas buyer – HELD - Penalty under section 114AA can be imposed for using false or incorrect materials in any declaration statement or document filed under the Act. In this case the appellant had declared certain goods and certain values. Thus, the values declared were it’s transaction values. According to the appellant it has also realized that the remittance as per these values and obtained bank realization certificates. If the proper officer decides to change the value, it does not mean that the exporter has mis-declared the value. Therefore, the penalty under section 114AA cannot be imposed on the appellant cannot be survive.
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