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Issues involved: Interpretation of Customs Valuation Rules, 1988 regarding rejection of transaction value based on contemporaneous value and applicability of 'special circumstances' u/s 14(1)(A).
The Appellate Tribunal CESTAT, Bangalore, in a case involving importers entering into contracts with foreign suppliers for goods delivery, addressed the issue of rejecting transaction value in favor of contemporaneous value. The Tribunal noted that the Revenue argued for assessing goods at a higher price based on contemporaneous values of other consignments on the same ship. However, the Tribunal cited the Customs Valuation Rules, 1988 and the decision in Eicher Tractors Ltd. v. CC, Mumbai, emphasizing that in the absence of 'special circumstances' as outlined in Rule 4(2), Customs must accept the price actually paid or payable. The Tribunal found that the transaction value was based on commercial considerations and upheld the appellants' position that there were no grounds to reject the transaction value. The Tribunal distinguished the Rajkumar Knitting Mills case, stating it was under the old law. Consequently, the Tribunal allowed all appeals with consequential relief, if any. In conclusion, the Tribunal's decision centered on the correct interpretation of Customs Valuation Rules, 1988, emphasizing the importance of 'special circumstances' u/s 14(1)(A) and the acceptance of transaction value based on commercial considerations unless specific exceptions apply.
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