2024 (1) TMI 533 - AT - Customs

Valuation of imported goods - Methyl Phenyl Acetylene - Availability of contemporaneous import or not - nature of goods and country of origin of impugned as well as contemporaneous goods - HELD THAT - The appellant categorically submit that the goods imported by the appellant cannot be considered as at par with the import made by the importer M/s. Dimesco Footcare(India) Pvt. Ltd. as alleged. Since times of import, quantity and country of import are different. As held by Apex court in the matter of BASANT INDUSTRIES VERSUS ADDL. COLLECTOR OF CUSTOMS, BOMBAY 1995 (1) TMI 89 - SUPREME COURT , a mere comparison of two invoices without anything more, it may not be correct to proceed on the premise that there is undervaluation. The relationship between the supplier and importer has also to be kept in mind because it is a matter of common knowledge that a price which is offered by a supplier to an old customer may be different from a price which the same supplier offers to a totally new customer. Similarly, as held by Apex court in the matter of Mirah Exports Pvt Ltd 1998 (2) TMI 124 - SUPREME COURT in the business world, considerations of relationship with the customer are also a relevant factor and the price offered by a supplier to an old customer may be different from a price which the same supplier offers to a totally new customer. Thus it is not unusual for a foreign supplier to give a higher discount to an importer who is importing a much larger quantity and merely because such a discount has been given by the supplier it cannot be said that there has been any undervaluation in the invoice. There are no reason to confirm the demand of the differential duty on appellant. Hence the appeal is allowed.

Summary

Issues involved:
The issues involved in the present appeal are regarding the valuation of imported goods and the determination of differential duty based on alleged under-valuation.

Valuation of imported goods:
The Appellant imported Methyl Phenyl Acetylene from Singapore and declared the value as USD 1900 at the time of filing the bill of entry. Subsequently, it was alleged that the same goods were cleared through Cochin Port by another importer for a value of USD 2400 PMT. A demand notice was issued to the Appellant for the differential duty amounting to Rs. 5,56,198. Despite the detailed reply submitted by the Appellant, the Adjudicating authority confirmed the demand, which was upheld by the Appellate authority. The Appellant contended that the declared value was justified, citing various decisions where it was established that transaction value cannot be rejected without cogent evidence regarding contemporaneous imports.

Comparison of imports and justification for declared value:
The Appellant's counsel highlighted that they imported more than 1000 containers per month across the country, and payments were made through irrevocable letters of credit. They imported 5 FCL (85 MT) and a part shipment of 981 MT was supplied at Cochin and other ports. The Appellant emphasized that they had imported the same goods through Ahmedabad and Kolkata ports at the declared value. The counsel argued that there was no justification to reject the declared value, especially considering the sales contract entered into by the Appellant. The Appellant's counsel referenced several decisions to support their argument.

Analysis and decision:
The Departmental Representative (DR) contended that the imported goods were of similar nature and origin, with a significant difference in value compared to contemporaneous imports. The DR relied on a Tribunal judgment to support the contention that the transaction value was not arrived at through negotiation with the foreign supplier. After hearing both sides, the Tribunal observed that the appellant had imported similar goods through various ports and produced bills of entry for the same. The Tribunal referred to the Customs valuation Rule and exceptions specified therein. It was noted that the transaction value declared by the Appellant was accepted initially, and the demand was made only after an audit observed higher rates for similar goods. The Tribunal concluded that there was no basis to confirm the demand for differential duty and allowed the appeal with consequential relief.

Final decision:
In conclusion, the Tribunal found no reason to uphold the demand for the differential duty on the Appellant and allowed the appeal with consequential relief as per the law.

*(Order pronounced in Open Court on 09.01.2024.)*