2017 (5) TMI 644 - AT - Customs

Valuation of exported goods - whether the appellate authority is correct in holding that invoice price for the goods exported and corroborated by bank realisation certificate is to be treated as value of the goods exported on which customs duty is payable or whether the value of the goods declared in the shipping bill at the time of exportation of the goods is to be considered as correct? Held that - this bench has settled this issue in the case of Hira Steel Limited 2017 (1) TMI 11 - CESTAT MUMBAI , where it was held that, it is settled law that analysis of departmental laboratory, unless challenged, has to be accepted as true and correct. Since the value/price of the iron ore fines is based upon the Fe content of the consignment, the value was, in our opinion, correctly worked out by the lower authorities. - appeal allowed - decided in favor of Revenue.

Summary

Issues:
1. Whether the appellate authority correctly determined the value of goods exported for customs duty payment based on invoice price corroborated by bank realisation certificate or the value declared in the shipping bill at the time of exportation.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs (Appeals), Goa. The main issue revolved around the determination of the value of goods exported for customs duty payment. The exporter had filed shipping bills for iron ore export claiming a certain FE content, but upon reaching the destination port, the actual content was lower. This led to negotiations and a price reduction for the consignment. The exporter then filed refund claims based on the contractual value for FE content of 50% or more. The adjudicating authority rejected the contentions, while the first appellate authority considered the value equivalent to the bank realisation certificate received for the export consignment.

The Tribunal referred to a previous case involving Hira Steel Limited where it was held that the terms of the agreement between parties should take precedence in determining the value for duty liability. The value at the time and place of export, as agreed upon by the parties, is crucial. In the present case, the goods were exported based on specified FE content as per agreements with purchasers in China and Singapore. The Tribunal emphasized that the value paid or payable at the time of export is significant. The analysis of the departmental laboratory, unless challenged, is considered true and correct. Additionally, once the ship sails after the Let Export Order, any subsequent events such as the consignment being unaccepted by the purchaser do not alter the assessed value. The principle for valuation under Section 14 of the Customs Act remains unchanged even if the goods are lost at sea.

The Tribunal distinguished the present case from a previous judgment involving VGM Exports, highlighting factual differences. The decision in the current case was influenced by the principles established in the Hira Steel Limited case. Consequently, the Tribunal allowed the appeals filed by Revenue, setting aside the impugned orders and ruling in favor of the Revenue. The operative part of the judgment pronounced in court stated that the Revenue's appeal was allowed, and the impugned order was set aside.