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customs agent is not responsible for goods valuation

Case law: M/s. Sri Velavan Logistics Services Private Limited Versus The Commissioner of Customs


Customs Broker Is Not Liable For Undervaluation Of Exported Goods: CESTAT


The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that customs brokers cannot be held liable for the undervaluation of exported goods.

The bench of P. Dinesha (a judicial member) has observed that the valuation of any goods could never be the domain of a customs broker as it depends upon the contract between the exporter and the importer, in which the customs broker has no say.


The appellant or assessee is a customs broker. The show cause notice was issued to the appellant. The Show Cause Notice stated that there was an attempt to export goods that were undervalued. According to the market survey, an identical-looking product to the one that was attempted to be exported costs Rs. 59 per piece, including G.S.T.The value of the goods was computed at Rs.115 per piece in terms of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. It was accepted by the authorised representative of the importer.


In the Show Cause Notice, the customs broker was alleged to have rendered themselves liable for action under the Customs Broker Licensing Regulations (CBLR), 2013, for contravening the provisions of Regulations 11(n) and 11(d).


The issue raised was whether the department was justified in imposing a penalty under Section 114 of the Customs Act, 1962, on the customs broker for an alleged violation of Regulations 11(n) and 11(d) of the Customs Brokers Licensing Regulations, 2013.

The tribunal held that the department failed to bring reasons on record as to the doubts about the truth or accuracy of the value declared in relation to the export of goods.

The CESTAT allowed the customs broker’s appeal and stated the imposition of a penalty on the customs broker was bad in law.


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