MUMBAI : The Customs Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi ruled that the Customs Broker has neither any authority nor any responsibility to assess the value of the imported/exported goods.

M/s. Trinity International Forwarders was issued a licence as a Customs Broker. The Directorate of Revenue Intelligence, Mumbai, received intelligence that some exporters were over-invoicing exports so as to claim excessive drawback and investigated the matter. One of these exporters was M/s. Janman Lifestyles Pvt. Ltd., who exported garments under 59 Shipping Bills filed in Mumbai and claimed drawback and the appellant filed some of these Shipping Bills as its Customs Broker. A Show Cause Notice for the alleged violations was issued to the exporter and others including the appellant in the case.  

Submissions 

Counsel for the appellant submitted that the summons were issued to its old address and therefore, it never received them. Had it received any of the summons, it would have appeared and would have readily cooperated with the investigation.

Decision 

The division bench of Dr. Rachna Gupta Member (Judicial) And P. V. Subba Rao Member(Technical)  noted that when the officer rejects the transaction value and determines the value of the imported  goods or export goods under the Rules, he re-determines the value to calculate duty under the Customs Act.

The bench further noted that he does not and he cannot change the transaction value (be it under FOB, CIF or C&F) which is the consideration paid or payable for the goods as between the importer and exporter. The officer is a stranger to the contract between the importer and exporter and has no locus standi to change the transaction value.

It was held by the Tribunal that the Customs Broker is neither authorized under the Act nor is obligated under the CBLR to re-determine the value of any goods. Transaction value (be it FOB, CIF or C&F) is a matter of negotiation between the overseas buyer and the Indian exporter. It is the consideration which is paid or payable to the Indian exporter by the overseas buyer. 

The bench observed that nothing in the facts of the case show that the appellant failed to fulfil its obligations under Regulation 11(d). Hence, it found that the appellant has not violated Regulation 11(d).

The Tribunal held that the cancellation of the licence of the appellant, forfeiture of the security deposit and imposition of penalty on the appellant are not sustainable and need to be set aside.