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Customs duty demand based on transit loss allowance in the valuation of imported goods. Analysis: The case involved eight appeals by M/s. Binani Zinc against orders confirming customs duty demand by the Commissioner (Appeals), Cochin. The dispute centered around the treatment of transit loss in the valuation of Zinc Concentrate imported by the appellants. The Appellants contended that the duty should be based on the transaction value agreed upon with the foreign supplier, which included deductions for transit loss and moisture content. The Department, however, argued that duty should be paid on the entire quantity imported without allowing for transit loss deductions. The Appellants' advocate argued that the contract price, based on an international formula, was the actual price paid and not disputed by the Department. They relied on previous court decisions to support their position. On the other hand, the Department contended that under Section 14 of the Customs Act, the value for duty calculation is deemed and should be based on the actual quantity imported, without provisions for remission based on transit loss. They cited a High Court decision to support their stance. The Tribunal analyzed the submissions and found merit in the Appellants' argument. They noted that the transaction value, including deductions for transit loss and moisture content as per the contract, was not disputed by the Department. The Tribunal emphasized that the dispute was about the price of the goods, not the quantity imported or any actual loss during transit. As the Department did not contest the transaction value and no restrictions applied, the Tribunal ruled in favor of the Appellants. They set aside all impugned orders and allowed all eight appeals, directing duty payment based on the transaction value agreed upon with the foreign supplier. In conclusion, the Tribunal's decision clarified that duty liability should be determined based on the transaction value agreed upon in the contract, which included deductions for transit loss and moisture content as per the international formula. The judgment highlighted the importance of honoring agreed-upon terms in international trade contracts and upheld the Appellants' position regarding the valuation of the imported goods.
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