2007 (11) TMI 164 - AT - Central Excise

Valuation of goods cleared to DTA by EOU - value of DTA clearances aren t necessarily to be same as that of value of export - value of exports could be different for different customers, especially if the exports are to different countries - value adopted for payment of duty for DTA clearances is the T. V. & not a manipulated one so, the transaction value declared by appellant can t be rejected order of taking FOB price of identical goods exported as value of goods sold in DTA is rejected

Summary

Issues:
- Discrepancy in valuation of goods for DTA sales compared to exports
- Imposition of duty, interest, and penalty by the original authority
- Appeal against the Commissioner (Appeals) decision

Analysis:
1. The appellant, a 100% EOU, cleared finished products for DTA sale at a value lower than identical goods exported. The original authority ordered duty recovery, interest, and penalty. The Commissioner (Appeals) upheld duty demand and interest but set aside the penalty, citing lower DTA sales value as the reason.

2. The appellant's advocate argued that export value depends on various factors and cannot be the standard for DTA sales. No evidence of deliberate under-valuation was presented, challenging the sustainability of the demand.

3. The SDR contended that the DTA sales value was significantly lower (25-30%) than the export value declared for Development Commissioner's permission. Both sides' submissions were carefully considered.

4. The Tribunal rejected the notion that DTA clearance value must match export value, noting variations due to different customer negotiations, especially across countries. The declared transaction value for DTA clearance was accepted, with no evidence of manipulation found.

5. Referring to a previous case, the Tribunal emphasized that the transaction price should be the basis for customs valuation, supporting the appellant's position.

6. Ultimately, the appeal was allowed with consequential relief, highlighting the importance of transaction value in determining duty for DTA clearances. The judgment emphasized the validity of the appellant's declared value and rejected the imposition of duty based on a different FOB value for exports.

Conclusion:
The judgment from the Appellate Tribunal CESTAT, Ahmedabad favored the appellant, a 100% EOU, in a dispute over the valuation of goods for DTA sales compared to exports. It emphasized the significance of the declared transaction value for DTA clearances and rejected the imposition of duty based on a different FOB value for exports. The decision provided relief to the appellant, setting aside the penalty and upholding the transaction value as the appropriate measure for customs valuation.