2017 (1) TMI 1636 - AT - Customs

Valuation of imported goods - parts imported from Belgium for trading - value of such imports (from Belgium) was higher compared to the similar parts imported from Sweden meant for use in the manufacture of goods by appellant - what should be the transaction value of goods imported from Belgium? - Held that - There was a difference in price between these two supplies while the goods are the same and the principal supplier was M/s. Volvo only. To the extent the parts imported from Sweden were not used in manufacture but were sold, that defeated the purpose of law for which the goods so sold were bound to valued in par with imports came from Belgium. Compelling reason for sale of goods came from Switzerland is immaterial to law - appeal dismissed - decided against appellant.

Summary

Issues: Valuation of imported parts, differential duty, purpose of law

Valuation of imported parts:
The appellant imported parts from Belgium for trading, with a higher value compared to similar parts imported from Sweden for use in manufacturing. The appellant argued that in case of selling parts from Sweden, valuation should not be on par with parts from Belgium. The Revenue contended that parts from Sweden were meant for manufacturing, and if traded, it would defeat the purpose of excise duty realization on finished goods. The Tribunal examined the show cause notice revealing imports from Belgium for sale and from Sweden for manufacturing by the same principal supplier. The difference in prices did not alter the fact that selling parts from Sweden defeated the purpose of the law, leading to the dismissal of the appeal.

Differential duty:
The issue of differential duty arose due to the variance in the value of imported parts from Belgium and Sweden. The appellant's argument about the contingent event of selling parts from Sweden not warranting valuation on par with parts from Belgium was countered by the Revenue, emphasizing the need for consistent valuation to prevent circumvention of excise duty obligations. The Tribunal's decision to dismiss the appeal was based on the understanding that trading parts imported from Sweden at a different value would undermine the intended purpose of excise duty realization on manufactured goods.

Purpose of law:
The fundamental issue underlying the valuation of imported parts was the purpose of the law regarding excise duty realization. The Revenue's stance was that allowing the appellant to trade parts imported for manufacturing would defeat the legislative intent of ensuring excise duty collection on cleared goods. The Tribunal's analysis of the situation highlighted the importance of upholding the legal framework by valuing traded parts from Sweden in line with those from Belgium, irrespective of any compelling reasons for selling parts from Sweden. This interpretation reinforced the significance of adhering to the legislative objectives in determining the valuation of imported goods for trade or manufacturing purposes.