{"id":7712,"date":"2026-01-22T16:03:23","date_gmt":"2026-01-22T10:33:23","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=7712"},"modified":"2026-01-22T16:03:23","modified_gmt":"2026-01-22T10:33:23","slug":"customs-cant-alter-fob-or-recompute-drawback-cestat","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/customs-cant-alter-fob-or-recompute-drawback-cestat","title":{"rendered":"Customs Can\u2019t Alter FOB Or Recompute Drawback | CESTAT"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/customs\/101010000000415136\/customs-officer-cant-alter-fob-as-mentioned-in-export-contract-nor-can-recompute-drawbackrosl-contrary-to-ftp-cestat\"><span class=\"TextRun SCXW30616443 BCX0\" lang=\"EN-IN\" xml:lang=\"EN-IN\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW30616443 BCX0\" data-ccp-parastyle=\"Body-All Documents\" data-ccp-parastyle-defn=\"{&quot;ObjectId&quot;:&quot;f54e3151-7552-5563-bc14-dd1598e94375|1&quot;,&quot;ClassId&quot;:1073872969,&quot;Properties&quot;:[469775450,&quot;Body-All Documents&quot;,201340122,&quot;2&quot;,134234082,&quot;true&quot;,134233614,&quot;true&quot;,469778129,&quot;Body-AllDocuments&quot;,335572020,&quot;1&quot;,469777841,&quot;Book Antiqua&quot;,469777842,&quot;Times New Roman&quot;,469777844,&quot;Book Antiqua&quot;,469769226,&quot;Book Antiqua,Times New Roman&quot;,335551500,&quot;0&quot;,134233111,&quot;true&quot;,335559740,&quot;280&quot;,201341983,&quot;1&quot;,335559739,&quot;0&quot;,335551550,&quot;6&quot;,335551620,&quot;6&quot;,469777929,&quot;Body-All Documents Char&quot;,201342446,&quot;1&quot;,201342447,&quot;5&quot;,201342448,&quot;1&quot;,201342449,&quot;1&quot;,469777843,&quot;Calibri&quot;,201341986,&quot;1&quot;,268442635,&quot;24&quot;]}\" data-ccp-parastyle-linked-defn=\"{&quot;ObjectId&quot;:&quot;d1cb5994-2cf1-5883-8af4-faa182bd9769|1&quot;,&quot;ClassId&quot;:1073872969,&quot;Properties&quot;:[201342446,&quot;1&quot;,201342447,&quot;5&quot;,201342448,&quot;1&quot;,201342449,&quot;1&quot;,469777841,&quot;Book Antiqua&quot;,469777842,&quot;Times New Roman&quot;,469777843,&quot;Calibri&quot;,469777844,&quot;Book Antiqua&quot;,201341986,&quot;1&quot;,469769226,&quot;Book Antiqua,Times New Roman&quot;,268442635,&quot;24&quot;,469775450,&quot;Body-All Documents Char&quot;,201340122,&quot;1&quot;,134233614,&quot;true&quot;,469778129,&quot;Body-AllDocumentsChar&quot;,335572020,&quot;1&quot;,134231262,&quot;true&quot;,335551500,&quot;0&quot;,134233111,&quot;true&quot;,469777929,&quot;Body-All Documents&quot;,469778324,&quot;Default Paragraph Font&quot;]}\">Mahajan Fabrics Pvt. Ltd. vs. Principal Commissioner of Customs (Export), New Delhi (2026) 38 Centax 125 (Tri.-Del)<\/span><\/span><span class=\"EOP SCXW30616443 BCX0\" data-ccp-props=\"{&quot;201341983&quot;:1,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:0,&quot;335559740&quot;:280}\">\u00a0<\/span><\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>Justice Dilip Gupta<\/strong>, President &amp;<strong>\u00a0Shri P. V. SUBBA RAO,<\/strong> Member (T)<\/li>\n<li><strong> Shri R.S. Yadav<\/strong>, Advocate, for the Appellant.<\/li>\n<li><strong>Shri M.K. Shukla,<\/strong> Authorised Representative, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The applicant exported readymade garments and claimed export incentives, including drawback and rebates on State levies. It was submitted that the FOB value in the export contract represented the transaction value agreed between the exporter and the overseas buyer. The adjudicating authority alleged that the exported garments were overvalued with the intent to avail higher export incentives. Based on a market inquiry report, the authority rejected the declared FOB value under Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, and redetermined the value under Rule 6 to compute export incentives. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).<\/p>\n<h2><em>CESTAT Held<\/em><\/h2>\n<p>The CESTAT held that the adjudicating authority, being a stranger to the contract between the exporter and overseas buyer, had no locus standi to alter the FOB value under Section 14 read with Sections 74 and 75 of the Customs Act, 1962 and the Customs Valuation Rules, 2007. It observed that the authority had no power to direct that export incentives, viz., drawback and rebate of State levies, be calculated on a value determined by him instead of the FOB value as per the Notification of the Government of India and Foreign Trade Policy. Following the Coordinate Bench in JBN Apparels Pvt. Ltd., the CESTAT held that FOB value, being the transaction value, could not be modified by Customs authorities. Consequently, the appeal was allowed in favour of the applicant.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li>JBN Apparels Pvt. Ltd. v. Commissioner \u2014 Final Order Nos. 50382-50387\/2025, dated 7-3-2025 by CESTAT, New Delhi \u2014 Followed [Paras 6, 7]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Mahajan Fabrics Pvt. Ltd. vs. Principal Commissioner of Customs (Export),&hellip;<\/p>\n","protected":false},"author":16,"featured_media":7719,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,177,47],"tags":[],"class_list":["post-7712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-customs","category-customs-news","category-custom-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Customs Can\u2019t Alter FOB Or Recompute Drawback | CESTAT<\/title>\n<meta name=\"description\" content=\"CESTAT holds that Customs officers cannot alter FOB value stated in export contracts or recompute drawback\/RoSL contrary to FTP provisions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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