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TMI Blog2003 (7) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the Bill of Entry. 3. The importer vide a letter dated 28-6-2002 averred that the price declared in B/E was true and in consonance with the contemporaneous price and also that it was as per the contract with the supplier, and also requested for finalizing the assessment on the basis of the declared price. 4. A Show Cause Notice Nos. S/20-55/2002, dated 5-7-2002 was also issued on the importer seeking enhancement of the declared value to 325 USD PMT and consequent recovery of the differential duty of Rs. 7,60,750/-. 5. In the defence reply dated 12-7-2002 the importer has contended that the goods are of Iran origin and have been shipped from that country; that the contract has been for bulk quantity of 5,000 MTs. while the contemporaneous price sought to be applied relates to a small quantity of 100 to 200 MTs; that the referred price also includes interest at 2% which does not exist in the case of the importerd goods and goods originating from developing country like Iran cannot be compared with Singapore, which is a developed country. The importer finally requested for acceptance of the declared value and setting aside of the notice. 6. The Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the aforesaid order, the appellant filed an appeal and a stay application. The grounds of appeal in short are as under :- (i) The impugned order has placed reliance on the case law in the case of Plast Fab and Rajkumar Knitting Mills Pvt. Ltd., which are not applicable to the facts and circumstances of the appellant s case. (ii) The Lower Authority failed to appreciate that the sales contract entered into with the supplier was duly registered with the Custom House. Hence, the Customs Authorities were aware that the price entered into was the actual transaction value payable pursuant to negotiations and the total contract was for a quantity of 5,000 MT +/- 5%. As a result of sales contract for a total quantity of 5,000 MT, part quantity of 1,000 MT came to be supplied under the contract to the appellant. (iii) Reliance is placed on the following decisions of various Courts - (a) Eicher Tractor Ltd. v. CC reported in 2000 (122) E.L.T. 321 (b) Mirah Exports v. CC reported in 1998 (98) E.L.T. 3 (S.C.) (c) Basant Industries v. Addl. Collector reported in 1996 (81) E.L.T. 195 (S.C.) (d) Balakishandas Sons v. CC reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scount considering the huge quantity contracted by the appellant and the slight variation of value to the tune of only 10% to 15%. It is also not covered under other provisions of Rule 4(2) of the Valuation Rules, 1988. The appellant s bona fide can be observed by his Act of Registering the Contract before Kandla Customs prior to the import of the goods. 12. The reliance of the Adjudicating Authority on Plast Fab case reported in 1993 (66) E.L.T. 441 and Rajkumar Knitting Mills Pvt. Ltd. reported in 1996 (98) E.L.T. 292 is misplaced. In Plast Fab, the value declared US $ 950 PMT and the comparable invoice was of US $ 1,675 PMT. Further, in that case also the Hon ble Tribunal has remanded the matter to the Adjudicating Authority to ascertain regarding applicability of Rules 5, 6, 7 and 8. In the Rajkumar Knitting, similar goods were imported by another person and supplied by the same supplier at the relevant time and therefore, the Hon ble Supreme Court held that the date of contract was not relevant. In the case of appellant, there is no such evidence. These two decisions are therefore not applicable. The observation of the Adjudicating Authority that in the present case evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions made at the time of personal hearing. In the Show Cause Notice, the reason for rejecting the price is given as - (a) that the price declared by the appellant is much less than compared to contemporaneous import and hence rejectable under Rule 10A of the Valuation Rules, 1988; and (b) the sale does not appear to be under fully competitive conditions. However, these issues have not been dealt with by the Adjudicating Authority. 16. The Adjudicating Authority has directly jumped to Rule 11 of the Valuation Rules and the first contention of the appellant is that the Adjudicating Authority has wrongly applied Rule 11 of the Valuation Rules, 1988 for arriving at the assessable value. Rule 11 of the Valuation Rules, 1988 is reproduced - 11. Settlement of dispute. - In case of dispute between the importer and the proper officer of Customs valuing the goods, the same shall be resolved consistent with the provisions contained in sub-section (1) of Section 14 of the Customs Act, 1962 (52 of 1962). 17. Rule 3(ii) of the Valuation Rules, 1988 stipulates that if the value cannot be determined under the provisions of Clause (i), the value shall be determined b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the same time as the goods being valued. (2) The provisions of clauses (b) and (c) of sub-rule (1), sub-rule (2) and sub-rule (3), of Rule 5 of these rules shall, mutatis mutandis, also apply in respect of similar goods. 20. These two rules talk of identical and similar goods. Identical and similar goods have been defined in Rule 2 of the Valuation Rules, 1988. One of the conditions of goods being identical or similar is that the country of origin should be the same. In this case, the country of origin of the impugned goods and the goods of the relied upon import are admittedly different. 21. Rule 7 talks of deductive method, which cannot be applied in the instant case. The only Rule, which appears to be applicable, is Rule 8 of the Valuation Rules, 1988. The same is reproduced below : 8. Residual method. - (1) Subject to the provisions of Rule 3 of these rules, where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and sub-section (1) of Section 14 of the Customs Act, 1962 (52 of 1962) and on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. 24. There is no doubt that the transaction value can be rejected, if the declared price is ridiculously low or unrealistic as has been held by the Hon ble Supreme Court in the case of Shibani Engineering Systems reported in 1996 (86) E.L.T. 453 (S.C.). However, in the instant case, it cannot be said that the price is ridiculously low or unrealistic. In fact, the same is comparable with not only the PLATT prices, but also the relied upon invoice. 25. As rightly pointed out by the appellant, the decisions in the case of Plast Fab and Rajkumar Knitting Mills (supra) are not applicable in this case. Para 25 of the decision in Plast Fab is reproduced - 25. It is seen that after having held that the declared value or the price paid for the goods could not be deemed as the Transaction Value the adjudicating authority observed that the value of the imported goods is also not determinable under Rules 5, 6 and 7. Thereafter, he proceeded to determine the value under Rule 8. It is seen that in terms of Rule 3, the provisions of the Customs (Determination of the Price of Imported Goods) Rules, 1988 have to be applied sequentially. Hence, the Additional Collector ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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