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2024 (9) TMI 255 - AT - CustomsValuation of imported goods - 1,2-Benzisothiazolin-3-ONE 85% (BIT PASTE 85%) China origin - rejection of the declared transaction cost and redetermination of assessable value under Section 17(5) of the Customs Act, 1962 - enhancement of the assessable value on the basis of contemporaneous import prices - HELD THAT - The appellant have submitted corresponding bill of entries as well. The appellant has also submitted some literature from the internet indicating the explosion in Xiangshui Industrial Park in Yancheng, Jiangsu. From the chart it is seen that there was a brief period from August 2019 to April 2020 when the prices of the product sky rocketed however thereafter the prices cooled down. In this context, the explanation given by the appellant fits the data. The explanation given by the appellant is reasonable and therefore, the impugned order is set aside - Appeal allowed.
Issues:
Rejection of declared transaction cost and redetermination of assessable value under Section 17(5) of the Customs Act, 1962. Detailed Analysis: The appellant, M/s Lanxess (India) Private Limited, filed an appeal against the rejection of the declared transaction cost and the redetermination of the assessable value under Section 17(5) of the Customs Act, 1962. The appellant had imported 8000 Kgs of 1.2 Benzisothiazolin-3-ONE 85% (BIT PASTE 85%) of China origin, declaring the price as USD 8.50 PKG on CIF basis. The system raised a query based on an earlier import where the price was declared as USD 28 PKG. The appellant argued that variations in commercial parameters can lead to price differences and provided evidence of significant price variations in their own imports over the past two years from different manufacturers. The appellant also explained that the price of a key raw material, O-chloro benzonitrile (OCBN), had dropped drastically, leading to a decrease in the final product price. The supplier corroborated this explanation, citing a five-fold increase in OCBN prices post an explosion in the main manufacturing unit. The original adjudicating authority, however, disregarded this explanation, citing lack of supporting documents from regulating authorities. The appellant submitted additional import data to support their claim of temporary price increase. The authorized representative relied on contemporaneous import data to support the rejection of the declared value, indicating prices in the range of 27.80 USD PKG to 28 USD PKG. The Tribunal considered the rival submissions and noted that the case revolved around the rejection of the declared assessable value and the enhancement of the assessable value based on contemporaneous import prices. The appellant had imported the product at USD 8.50 PKG, which was rejected based on a previous import at USD 28 PKG. The appellant argued that a temporary rise in prices was due to an explosion in a manufacturing unit producing a key input for the product, OCBN, leading to a subsequent drop in prices. The appellant provided a letter from the supplier and import data showing a decrease in the product price post the impugned imports. The Tribunal reviewed detailed import data from February 2018 to August 2020, which indicated a temporary price increase followed by a decrease. The appellant's explanation aligned with the data presented, leading to the Tribunal setting aside the impugned order and allowing the appeal. In conclusion, the Tribunal found the appellant's explanation regarding the temporary price increase and subsequent decrease reasonable, overturning the impugned order and allowing the appeal.
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