2022 (10) TMI 966 - AT - Customs

Demand of differential duty - consignment of PVC Flex Sheet LF-238 by way of filing Bills of Entry and cleared the imported goods for Home Consumption from ICD - imports by contemporaneous price - HELD THAT - As regard application of the contemporaneous price, it is found that imports by Tower Overseas are of February 2006 and that of appellant are of April to July 2006. For applying the price of contemporaneous goods, it is also one of the condition that the import should be at same time. Moreover there is force in the submission of the appellant that market of PVC Flex Sheet during that period was volatile, in that view imports not being of the same time; the import value of that Tower Overseas are not comparable at all. The fact was also placed on record by the appellant that during the same period of imports by the appellant, there have been imports of the similar item @0.27USD/SQM at the port of Mumbai by Yash Enterprise which is lesser than the price at which appellant imported the said items during the month of June 2006. It is also settled law that while applying the price of contemporaneous goods, when more than one price are available then the lowest of the prices should be taken for the assessment. Therefore for this reason the price could not have been enhanced in respect of the goods in question. As a result impugned order is not sustainable, accordingly the same is set aside - appeal allowed.

Issues:
1. Upholding of demand of differential duty under section 28(2) of the Customs Act, 1962 along with interest and penalty.
2. Application of contemporaneous price for imported goods.
3. Comparability of goods imported by different parties at different times.
4. Consideration of transaction value in the absence of evidence of violation.

Issue 1: Upholding of demand of duty under section 28(2) of the Customs Act, 1962 along with interest and penalty:
The appeal challenged the Order-In-Original (OIO) confirming the demand of differential duty under section 28(2) of the Customs Act, 1962, along with interest and equal penalty under section 114A of the Act. The Commissioner of Customs (Appeals) upheld the OIO dated 28.02.2020, which was contested by the appellant. The Tribunal had previously remanded the matter to the adjudicating authority to supply import documents to the appellant, which were subsequently provided. Despite the submissions made by the appellant's counsel, the adjudicating authority again confirmed the duty demand and imposed penalties, which were upheld by the Commissioner of Customs (Appeals). The appellant argued that the value was already enhanced during re-assessment and could not be further increased without appealing the assessment. The Tribunal, after considering the submissions, set aside the impugned order, stating that two conflicting orders on the same imported goods could not coexist.

Issue 2: Application of contemporaneous price for imported goods:
The Tribunal analyzed the application of contemporaneous price for the imported goods in question. It was noted that imports by another party, Tower Overseas, were from February 2006, while the appellant's imports were from April to July 2006. The Tribunal acknowledged the volatility in the market of PVC Flex Sheet during that period, making the imports not contemporaneous. The appellant presented evidence of imports by Yash Enterprise at a lower price during the same period, emphasizing that the prices were not comparable. The Tribunal held that the lowest price of contemporaneous goods should be considered for assessment, and therefore, the price could not be enhanced for the goods in question.

Issue 3: Comparability of goods imported by different parties at different times:
The Tribunal considered the comparability of goods imported by different parties at different times. It was observed that the imports by Tower Overseas and the appellant were not contemporaneous, affecting the comparability of prices. The appellant highlighted imports by Yash Enterprise at a lower price during the relevant period, indicating that the prices were not comparable. The Tribunal emphasized that for applying the price of contemporaneous goods, the imports should be at the same time, and in this case, the prices were not comparable due to the timing differences.

Issue 4: Consideration of transaction value in the absence of evidence of violation:
The appellant argued for the acceptance of the declared transaction value in the absence of any evidence of violation of the proviso to Rule 4(2) of the Rules. It was emphasized that there was no allegation or evidence of payment exceeding the invoice value of the supplier. The appellant contended that the transaction value should have been accepted. However, the Tribunal did not delve into this issue as it had already set aside the impugned order based on the application of contemporaneous price for the imported goods.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal based on the analysis of the application of contemporaneous price for the imported goods and the lack of comparability between goods imported by different parties at different times. The decision highlighted the importance of considering the timing and market conditions when assessing the value of imported goods.

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