2023 (11) TMI 571 - AT - Customs

Valuation of imported goods as per PLATTS rate - variation up to 10% form PLATTS rate would be considered with the prior written approval of the jurisdictional Additional/ Joint Commissioner - HELD THAT - The standing order No. 15/2012 dated 10.09.2012 provided for valuation of 10% from PLATTS rate in a case where the plastic products were imported form the manufacturer - the 10% variation is provided from that PLATTS rate, if the goods are imported form the manufacturer. In the present case, there is no dispute that the goods were imported form the manufacturer. The contention of the department is that the appellant have not obtained the prior approval of the jurisdictional additional/ joint commissioner. The appellant have admittedly submitted a letter on their letterhead. Even though the said letter was signed by agent since the custom agent is authorized person of the appellant, the letter must be considered as if submitted by the appellant only. Therefore, the said letter submitted by the appellant is a proper compliance of the standing order. Even if the said letter is not considered as proper compliance the prior written approval is only a procedural requirement. If all other conditions are satisfied such as import of the goods from the manufacturer then merely because the procedure of prior written approval cannot come in the way of allowing the 10% variation from the PLATTS rate to arrive at the valuation - the standing order itself is a guideline and not an Act or Rules made under Customs Act. The noncompliance of standing order is only a procedure lapse, for which the substantive benefit of the 10% variation cannot be denied - in the facts of this case the appellant is entitled for the 10% variation from the PLATTS rate to determine the correct value. The impugned order set aside - appeal allowed.

Summary

Issues Involved:
The issues involved in the judgment are the denial of 10% variation from PLATTS rate for valuation of imported goods, procedural compliance with standing orders, and the authority's requirement of prior approval for variation.

Denial of 10% Variation from PLATTS Rate:
The appellant, a Custom agent, imported plastic goods at Hazira Port and sought a 10% variation from the PLATTS rate for valuation, as per standing orders. However, the assessing officer rejected the variation, citing the unauthorized signature on the letters submitted by the appellant. The Adjudicating Authority upheld the denial, leading to differential custom duty demand and penalties. The Commissioner (Appeal) also rejected the appellant's appeal. The appellant contended that the letters were submitted on their letterhead, and even though signed by the agent, it was authorized. The appellant argued that compliance with the standing order was proper and that the procedural lapse should not negate the valuation method. The Tribunal found that the 10% variation was applicable when goods were imported from the manufacturer, and in this case, the appellant had complied with the procedure prescribed. The Tribunal held that the denial based on procedural lapses did not justify withholding the 10% variation benefit, as the standing order was a guideline, not a statutory rule. Consequently, the Tribunal ruled in favor of the appellant, allowing the 10% variation from the PLATTS rate for correct valuation.

Procedural Compliance with Standing Orders:
The standing order No. 15/2012 dated 10.09.2012 outlined the procedure for valuation, allowing a 10% variation from PLATTS rate for imports from manufacturers. The Tribunal emphasized that the appellant's submission of a letter on their letterhead, even if signed by the agent, should be considered as submitted by the appellant. The Tribunal reasoned that the prior written approval requirement was procedural, and as long as other conditions were met, such as importing goods from the manufacturer, the 10% variation should not be denied. The Tribunal highlighted that noncompliance with standing orders amounted to a procedural lapse, not a substantive violation, warranting the appellant's entitlement to the 10% variation benefit. Therefore, the Tribunal held that the appellant had complied with the standing order and should receive the benefit of the 10% variation for accurate valuation.

Requirement of Prior Approval for Variation:
The department contended that the appellant did not obtain prior approval from the jurisdictional additional/joint commissioner for the 10% variation from the PLATTS rate. However, the Tribunal noted that the appellant's submission of a letter on their letterhead, even if signed by the agent, should be considered as compliance with the standing order. The Tribunal clarified that the prior written approval was a procedural requirement, and as long as other conditions were met, such as importing goods from the manufacturer, the lack of prior approval should not hinder granting the 10% variation benefit. The Tribunal emphasized that the standing order's noncompliance was a procedural lapse, not a substantive violation, and ruled in favor of the appellant, allowing the 10% variation for correct valuation.