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2004 (2) TMI 129 - AT - CustomsValuation of imported goods - Enhanced the value of imported goods - goods as brass scrap - principle to reject the transaction value - HELD THAT - It is an admitted fact that the department relied on invoices of a higher value to reject the transaction value. We observe that the Tribunal, in the case of Adani Exports Ltd. v. CC, Vishakhapatnam 1999 (11) TMI 220 - CEGAT, MADRAS , ruled that prices given in a journal like PLATT cannot be the basis for enhancing the transaction value. In the present case, the department tried to rely on the LME prices though they have themselves not relied on those prices uniformly in every case of import during the relevant period. The Tribunal, in the above cited order, also observed that the price of a consignment of 1250 tons is not to be adopted for a consignment of 16 tons as the imports are on different commercial levels, and therefore are not comparable. The department's appeal against this order was rejected by the Supreme Court 2001 (3) TMI 1029 - SC ORDER . The Supreme Court observed, We find no merits in this appeal. It is dismissed with costs. In the case of CC, Nhava Sheva v. Sangeeta Metal (India) - 2001 (10) TMI 471 - CEGAT, MUMBAI , WRB, following the decision of the Supreme Court in the case of Eicher Tractors Ltd. v. CC, 2000 (11) TMI 139 - SUPREME COURT , the Tribunal observed that in the absence of any of the circumstances mentioned in Rule 4 of the Customs Valuation Rules, the transaction value declared by the importer has to be accepted. All in all, it is settled law that the transaction value cannot be altered/loaded on the basis of values declared in stray imports when the quantity/quality is not comparable. LME prices are only indicative at best. The transaction value declared by the importers when it is hit by any one of the clauses of Rule 4 of the Customs Valuation Rules can be rejected. The Revenue's appeal merely goes by certain decisions which can be distinguished. The later pronouncements on the subject (Eicher Tractors) should be the guiding principle to reject the transaction value. The Revenue has failed to pass the basic test of Rule 4. The appeals are rejected.
Issues Involved: Revenue's appeal against Commissioner of Customs (Appeals) order setting aside value enhancement on imported brass scrap; Dispute over transaction value acceptance u/s Section 14(1) and Rule 4 of Customs Act and Customs Valuation Rules; Reliance on LME prices; Comparison of contemporaneous prices; Absence of cogent material for transaction value rejection; Applicability of Rule 4 of Customs Valuation Rules.
Issue 1: Value Enhancement Dispute The Commissioner (Appeals) set aside the lower authority's order enhancing the value of imported brass scrap, emphasizing that the transaction value declared by importers should be accepted as per Section 14(1) and Rule 4 of the Customs Act and Customs Valuation Rules. The Commissioner rejected reliance on LME prices and upheld that the transactions were at arms length, not solely based on price. Various decisions supported this stance, leading to the importers' appeals being allowed. Issue 2: Department's Grounds of Appeal The Revenue contended that the Commissioner (Appeals) erred in not applying the best judgment method under Rule 8 due to differences in declared values, citing Tribunal and High Court precedents. They argued for the comparability of brass scrap prices and the rejection of contemporaneous prices and LME prices by the Commissioner (Appeals). Issue 3: Transaction Value Acceptance The Commissioner (Appeals) heavily relied on the Basant Industries case, asserting that the transaction value is acceptable unless there is cogent material to reject it. The Tribunal's past rulings emphasized the acceptance of declared transaction value in the absence of circumstances mentioned in Rule 4 of the Customs Valuation Rules. Conclusion It is established that transaction value cannot be altered based on values from incomparable imports, with LME prices being indicative. The rejection of transaction value requires adherence to Rule 4 clauses. The Revenue's appeal lacked merit and failed to meet the Rule 4 criteria, leading to the rejection of the appeals. The decision aligns with the settled law and recent pronouncements on the subject.
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