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Issues: Valuation of goods under Section 14(1) of the Customs Act
The judgment revolves around the valuation of goods under Section 14(1) of the Customs Act. The key issue is whether the transaction value provided by the appellants should be accepted or if an alternate valuation method should be applied based on contemporaneous imports by a Government of India undertaking. Analysis: The appellants sought the acceptance of the invoice value for the goods, while the revenue relied on the import price of contemporaneous imports made by a Government of India undertaking. The lower appellate authority allowed a quantity discount of 6.5% based on a certificate provided by the suppliers of the goods. The advocate for the appellants argued that all requirements for accepting the transaction value under Section 14(1) and Rule 4 of the Valuation Rules had been met. The appellants had negotiated the price with the suppliers, and certificates from the suppliers highlighted discounts offered based on various terms like bulk offtake commitment. The JDR contended that the appellants did not provide evidence of standard prices in the international market or the rationale behind the discounts offered. It was argued that since the appellants had personal negotiations with the suppliers and no evidence supported the goods being sold at the invoiced price in the course of international trade, the special price given to the appellants was not acceptable. The Tribunal noted the lack of evidence to show that the invoiced price was based on international trade rationale, as required by Section 14(1) read with Rule 4 of the Valuation Rules. The Tribunal observed that the appellants failed to demonstrate that the reduced price at which they imported the goods reflected the price available in the course of international trade. As a result, the transaction value could not be accepted. Considering the rejection of the Rule 4 value, the Tribunal examined the basis for valuation. It was noted that a Government of India undertaking had imported the same goods at higher prices, and a discount of 6.5% was allowed by the lower authority to account for the appellants' bulk purchases. The Tribunal upheld the lower appellate authority's decision, finding no error in the valuation method applied. In conclusion, the Tribunal dismissed the appeal, affirming the lower appellate authority's order regarding the valuation of the goods under Section 14(1) of the Customs Act.
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