2023 (11) TMI 1037 - AT - Customs

Valuation - Rejection of Transaction value - Demand of differential Customs Duty - finalisation of assessment of shipping bill - whether the price adopted for finalisation at the rate of US 101.43 PDMT, instead of the contract value of the export goods is justified? HELD THAT - The transaction value have been rejected mainly on the basis of some confusion arising from the BRC, which referred to 4 shipping bills for the total quantity of 30,000 WMT. Accordingly, there was difference noted by the Customs Officer with regard to the quantity exported. According to the said invoice No. 355/2009 10 dated 14.01.2010, total quantity exported was only 25,924 WMT. It is found that there is no basis except assumption and presumption for drawing adverse inference on this account - further there is no evidence that the Appellant have received anything extra, higher than the invoice amount, which is supported by the BRC - the reasons given for rejecting the transition value, is against the provisions of Section 14 of the Customs Act read with Rule 8 of the Valuation rules. So far rejection of transaction value is concerned, it is held that for the excess lumps the same were to be charged at 10% ad-valorem, and not 15% ad-valorem. The Court below is directed to re-calculate the duty payable in terms of this Order - Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the demand of a differential customs duty and the justification of the price adopted for finalization of the assessment of shipping bills.

Issue 1 - Demand of Differential Customs Duty:
The Appellant, an exporter of Iron Ore Fines, faced a dispute regarding the demand of a differential customs duty of &8377;4,42,049/- as per the Order-in-Original. The dispute arose from the finalization of assessment for shipping bill Nos. 8800677 and 8800679 dated 02.02.2010. The Appellant had entered into contracts for sale with a buyer in China for specific quantities at different rates from Haldia Port and Vizag Port. The total quantity loaded on the ship MV DONG JIN was 25,924 WMT, supported by bills of lading. The Appellant raised a consolidated commercial invoice for this quantity, and the total amount realized was confirmed through a bank realization certificate. The Customs provisionally assessed the consignment at different rates than declared, leading to a differential duty demand. The Assistant Commissioner rejected the transaction value and resorted to Rule 5 and Rule 6 for determining the export value based on computed value method and Metal Bulletin prices, resulting in the demanded differential duty of &8377;4,42,049/-.

Issue 2 - Justification of Price Adopted for Finalization:
The rejection of the transaction value by the Customs was primarily based on confusion arising from the Bank Realization Certificate (BRC) mentioning 4 shipping bills totaling 30,000 WMT, while the commercial invoice indicated only 25,924 WMT exported. The rejection of the transaction value was found to be without a proper basis, assumption, or evidence of receiving extra amounts. The rejection was deemed to be against the provisions of Section 14 of the Customs Act read with Rule 8 of the Valuation rules. The Court allowed the appeal, set aside the impugned order, and directed a recalculation of the duty payable at 10% ad-valorem for excess lumps instead of 15% ad-valorem. The rejection of the transaction value was overturned, and the Court directed a re-calculation of the duty based on the new determination.

Separate Judgement:
No separate judgment was delivered by the judges in this case.