2008 (6) TMI 180 - AT - Customs

Confiscation - Jute bags were confiscated on the ground that the exporter declared higher FOB value - As the appellant in addition to the purchase price paid also done value addition & also paid transportation & insurance charges therefore it cannot be said that the value was inflated moreover value of the exported goods is not related to the DEPB claim - the DEPB claim is on the weight basis and there is no discrepancy in the weight mentioned in the shipping bill confiscation set aside

Summary

Issues:
1. Confiscation of jute bags due to the declaration of higher FOB value.
2. Appellant's contention of value addition and rejection of bags.
3. Revenue's duty-bound declaration argument.
4. Comparison with relevant case laws - Om Prakash Bhatia and Vishal Exports Overseas Ltd.
5. Lack of correlation between FOB value and DEPB claim.

Analysis:
1. The Appellate Tribunal CESTAT, New Delhi heard an appeal regarding the confiscation of 23025 jute bags due to the exporter declaring a higher FOB value. The goods were to be redeemed on payment of a fine and penalty. The appellant exported LDPE laminated Jute bags under the DEPB scheme, claiming entitlement based on weight. The revenue alleged misdeclaration leading to confiscation.

2. The appellant argued that they added value by printing logos, and rejected substandard bags before export. They contended that the declared value included additional costs like transportation and insurance, justifying the FOB value. They emphasized the lack of relation between the exported goods' value and the DEPB claim based on weight.

3. The revenue insisted on the duty-bound correct declaration of exported goods, citing the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi. The revenue pointed out the appellant's admission of purchasing goods at a lower price than declared, supporting the confiscation.

4. The Tribunal noted that the FOB value was based on the appellant's cost, including transportation and value addition. They highlighted the lack of correlation between the FOB value and the DEPB claim, as admitted in the adjudication order. They differentiated the present case from Om Prakash Bhatia, emphasizing the absence of a higher drawback claim. The Tribunal referenced the case of Commissioner of Customs v. Vishal Exports Overseas Ltd., supporting the FOB value being reasonable when the consideration amount is received.

5. Considering the irrelevance of the declared FOB value to the DEPB benefit based on weight, the Tribunal found the confiscation unsustainable and set it aside, allowing the appeal. The judgment was dictated and pronounced in open court by the Vice-President.