ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 31.07.2025
CESTAT Delhi Set Aside Re-determination of FOB Value and Confiscation β
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, recently delivered a significant judgment in the case of M/s Modak Dyeing & Printing Co. Pvt. Ltd. (Customs Appeal No. β 53962 of 2023). This decision, pronounced on July 29, 2025, has far-reaching implications for exporters and the interpretation of customs valuation rules under the Customs Act, 1962. Letβs delve into the details of this case and its impact on the export industry.
Background of the Case
The appellant, M/s Modak Dyeing & Printing Co. Pvt. β Ltd., filed two shipping bills in August 2018 for the export of Girls Frocks Woven Made of Manmade Fibre, declaring a Free On Board (FOB) value of Rs. β 4,10,52,321/-. However, the Special Intelligence and Investigation Branch (SIIB) suspected overvaluation of goods to claim excessive export benefits such as drawback, Refund of State Levies (ROSL), Merchandise Exports from India Scheme (MEIS), and IGST refund. β
Following a market inquiry, the customs authorities determined the market value of the goods to be between Rs. β 45/- to Rs. 65/- per piece, significantly lower than the declared value of Rs. 274.13 per piece. β Consequently, the Joint Commissioner rejected the declared FOB value under Rule 8 of the Customs Valuation Rules, 2007, and re-determined it under Rule 6, reducing the total value to Rs. β 74,88,000/-. The goods were confiscated, and penalties were imposed.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Delhi
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