2017 (1) TMI 11 - AT - Customs

Valuation - export of goods - Section 14 of the Customs Act, 1962 - consignment rejected by purchaser due to dispute in Fe, and were sold to other party, can the valuation be revised on this basis that the appellant had received less amount than the contracted value? - Held that - once the ship sails from the port after the Let Export Order, and the cargo does not arrive at the destination, the assessment entered by the adjudicating authority at the time of Let Export Order remains and does not undergo any change even for the reason that the goods are lost at sea. The exporter does not have a claim for refund - If this principle is applied, which is the correct principle for valuation as per Section 14 of the Customs Act, 1962, the consignment having been declared to be unaccepted by the purchaser cannot be a reason for reduction in the value of the consignment as cleared from India - appeal dismissed - decided against appellant.

Issues Involved:
1. Correct valuation of export goods under Section 14 of the Customs Act, 1962.
2. Provisional assessment and final assessment of shipping bills.
3. Relevance of Fe content in determining the value of iron ore fines.
4. Impact of sale to a different purchaser at the destination port on valuation.
5. Applicability of previous judgments and legal precedents.

Detailed Analysis:

1. Correct Valuation of Export Goods:
The primary issue revolves around the correct value to be adopted under Section 14 of the Customs Act, 1962 for the duty demand on exported goods. The appellant contested the final assessment, arguing that the customs duty should be recalculated based on the actual price realized from the sale to a second purchaser at the destination port, due to the lower Fe content than initially declared.

2. Provisional Assessment and Final Assessment:
The appellant filed shipping bills for exporting iron ore fines to China, requesting provisional assessment. The provisional assessment was based on the declared Fe content of 52% and 54%. Upon receiving the test report from the Customs Laboratory and the required documents, the assessment was finalized. The appellant disagreed with the final assessment for one shipping bill, claiming the customs duty was wrongly calculated.

3. Relevance of Fe Content:
The Fe content declared by the appellant was 52% and 54%, based on private laboratory analysis. However, upon reaching the destination, the Fe content was found to be lower (46% and 50%). The appellant argued that the customs duty should reflect the lower price realized due to the lower Fe content. The adjudicating authority and the first appellate authority, however, upheld the assessment based on the original Fe content declared at the time of export.

4. Impact of Sale to a Different Purchaser:
The appellant's initial purchasers declined to accept the consignment due to the lower Fe content, leading to a sale to a different purchaser at a lower price. The appellant argued that the duty should be based on the actual price realized. The Tribunal noted that the subsequent sale at the destination port does not affect the valuation at the time of exportation from India. The taxable event is the point when the goods are cleared for export, and the value at that time should be considered for duty liability.

5. Applicability of Previous Judgments:
The appellant cited the case of Commissioner of Customs (Export), Goa v. VGM Exports, arguing that duty should be based on the price at the discharge port as evidenced by the Bank Realization Certificate (BRC). However, the Tribunal distinguished the present case, noting that the facts differed, particularly regarding the sale to a different purchaser at the destination port. The Tribunal also referenced other judgments supporting the principle that the valuation should be based on the declared value at the time of export.

Conclusion:
The Tribunal upheld the final assessment of the shipping bills, rejecting the appellant's arguments. It held that the value at the time of export, based on the declared Fe content, was correctly determined by the lower authorities. The appeals were dismissed as devoid of merits, affirming the correctness of the impugned order. The Tribunal emphasized that subsequent changes in the sale price at the destination port do not impact the valuation for customs duty purposes at the time of export.

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