2008 (1) TMI 664 - AT - Customs

Summary

Issues involved: Interpretation of Customs Valuation Rules, reliance on judicial precedents, rejection of transaction value, applicability of Metal Bulletin Price.

In the present case, the Revenue challenged the orders of the Commissioner of Customs(Appeals) which accepted the transaction value of Manganese Metal imported by the respondents from South Africa, setting aside the adjudication order that rejected the transaction value and enhanced it based on Metal Bulletin rates of LME.

Interpretation of Customs Valuation Rules:
The Appellate Tribunal considered the Apex Court judgment in the case of M/s. Rajkumar Knitting Mills (P)Ltd. v. CC, Bombay [1998 (98) E.L.T. 292(S.C.)]. However, the Tribunal noted a distinction made in the case of Andhra Sugars Ltd. v. CC, Visakhapatnam [2006 (193) E.L.T. 68 = 2005 (102) ECC 103], where it was held that the Rajkumar Knitting Mills decision was rendered in the context of the old Customs Valuation Rules. The Tribunal emphasized that transaction value cannot be rejected without evidence of contemporaneous import of the same goods, and in the absence of such evidence in the present case, where reliance was solely on the Metal Bulletin Price, the new Valuation Rules should apply.

Reliance on judicial precedents:
The Tribunal upheld the decision in Andhra Sugars Ltd., stating that the ratio of that decision is applicable to the facts of the case. It was emphasized that the decision of the Apex Court in the Rajkumar Knitting Mills case, relied upon by the Revenue, was not correct in the context of the new Valuation Rules governing the import in question.

Rejection of transaction value:
The Tribunal found that there was no evidence of contemporaneous import in the case, and the entire basis of rejecting the transaction value was the Metal Bulletin Price. As per the decision in Andhra Sugars Ltd., the Tribunal concluded that the transaction value cannot be rejected solely based on such pricing information.

Applicability of Metal Bulletin Price:
The Tribunal ultimately upheld the impugned orders and rejected the appeals, emphasizing that the case was governed by the new Valuation Rules, and the decision in Andhra Sugars Ltd. was directly applicable to the present circumstances, where reliance on the Metal Bulletin Price alone was insufficient to reject the transaction value.