2009 (6) TMI 275 - AT - Customs

Contemporaneous import valuation - Importer made a contract with manufacturer for supply of goods for a period of six months - Revenue has not advanced any evidence to show that the contract price was not correct. They have also not effectively rebutted the reasoning of the Commissioner (Appeals) as regards the effect of fluctuating market, which stands dealt in by Tribunal in the case of Finolex v. CCE, Pune The product in question being petroleum based product, the price of which swing in the international market along with swing in the petroleum price. The appellate authority has taken into account the evidence showing fluctuations in the international market of the goods in question. - We do not find any infirmity in the order passed by the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.

Summary

Issues:
Customs Valuation - Rule 10A of the Customs Valuation Rules, 1988 - Justification of declared price - Contemporaneous import prices - Fluctuating market prices.

Analysis:

Issue 1: Customs Valuation - Rule 10A of the Customs Valuation Rules, 1988 - Justification of declared price
The case involved the import of Methyl Isobutyl Ketone (MIBK) by the respondent at a declared price of USD 690 PMT. The department questioned this price and issued a Show Cause Notice under Rule 10A of the Customs Valuation Rules, 1988. The respondent justified the price based on a contract with the manufacturer at USD 700 PMT. The adjudicating authority considered the contract and external sources like the Chemical Trade Intelligence Bulletin to support the declared price. The Commissioner (Appeals) also upheld this justification, emphasizing the importance of evidence to support declared values and the authority's role in determining the value sequentially as per Rules 5 to 8.

Issue 2: Contemporaneous import prices
The Revenue challenged the order, arguing that similar goods were imported at a higher price during the same period. However, the respondent provided evidence of the contract with the manufacturer and fluctuations in the international market for petroleum-based products like MIBK. The Tribunal noted that minor price variations in contemporaneous imports may not be sufficient to doubt the declared value, especially when supported by evidence. The Tribunal referenced previous judgments highlighting the need for the department to seek further information if doubts persist but also to accept justifications provided by importers.

Issue 3: Fluctuating market prices
The appellate authority considered the impact of fluctuating market prices on the valuation of goods, especially for petroleum-based products subject to international price swings. The Tribunal found that the Revenue failed to present evidence to challenge the correctness of the contract price or effectively rebut the reasoning of the Commissioner (Appeals) regarding market fluctuations. Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals), emphasizing the importance of supporting evidence and the authority's duty to consider market dynamics in customs valuation cases.

In conclusion, the Tribunal rejected the Revenue's appeal, finding no error in the Commissioner (Appeals)'s decision. The case highlighted the significance of justifying declared values, considering contemporaneous import prices, and accounting for market fluctuations in customs valuation assessments.