2003 (7) TMI 423 - Commissioner - Customs

Summary

Issues Involved:
1. Provisional assessment and declared value of imported goods.
2. Query memo and test report.
3. Show Cause Notice and defense reply.
4. Adjudicating Authority's grounds for rejecting invoice value.
5. Appellant's grounds for appeal.
6. Application of Customs Valuation Rules.
7. Comparison with contemporaneous imports.
8. Determination of assessable value.

Issue-wise Detailed Analysis:

1. Provisional Assessment and Declared Value of Imported Goods:
The appellant filed Bill of Entry No. F-8468, dated 24-6-2002, for importing 1,000 MT of Toluene, provisionally assessed at a declared value of US $ 285 PMT pending test results and value verification under P.D. Bond.

2. Query Memo and Test Report:
A query memo was raised due to the declared value being lower than a contemporaneous import value of US $ 325 PMT. The Customs Laboratory at Kandla confirmed the declaration in the Bill of Entry.

3. Show Cause Notice and Defense Reply:
A Show Cause Notice dated 5-7-2002 was issued, seeking enhancement of the declared value to 325 USD PMT and recovery of differential duty of Rs. 7,60,750/-. The importer contended that the goods were of Iranian origin, shipped under a bulk contract for 5,000 MTs, and the contemporaneous price related to a smaller quantity and different origin.

4. Adjudicating Authority's Grounds for Rejecting Invoice Value:
The Adjudicating Authority rejected the declared invoice value, citing that it was lower than the prevalent international market price. The authority referenced Rule 11 of the Customs (Valuation) Rules, 1988, and Section 14(1) of the Customs Act, 1962, emphasizing that the burden of proof shifted to the importer once the department presented evidence of contemporaneous import at a higher value.

5. Appellant's Grounds for Appeal:
The appellant argued that the Adjudicating Authority misapplied case laws (Plast Fab and Rajkumar Knitting Mills Pvt. Ltd.) and failed to consider the registered sales contract for 5,000 MTs. The appellant cited several court decisions supporting their stance on transaction value and the inapplicability of the referenced case laws.

6. Application of Customs Valuation Rules:
The appellant argued that the Adjudicating Authority incorrectly applied Rule 11 instead of proceeding sequentially through Rules 5 to 8. The Advocate emphasized that the goods from different countries cannot be considered identical or similar under the Valuation Rules.

7. Comparison with Contemporaneous Imports:
The Advocate highlighted that the contemporaneous import from Singapore at US $ 325 PMT was not comparable due to different country origins and commercial levels. The appellant provided evidence, including PLATT prices, showing that the declared value was consistent with international market prices.

8. Determination of Assessable Value:
The appellate authority found that the Adjudicating Authority erred in directly applying Rule 11 without considering Rules 5 to 8. It was concluded that the contemporaneous import from a different country was not comparable, and the transaction value should be accepted as no substantial evidence was provided to reject it.

Conclusion:
The appeal was allowed, and the transaction value declared by the appellant was accepted, overturning the Adjudicating Authority's decision to enhance the value based on non-comparable contemporaneous imports.