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TMI Blog2018 (2) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was charged by the Respondent from their customers or the customers price was equal to dealers price. Hence we are of the view that since the basis of demand itself is without any basis, the demand is not sustainable. In various judgments, Tribunal and the Apex Court has rejected the price by an EOU to DTA as transaction value and held that the FOB value of exports would be basis for valuation of goods cleared into DTA - thus, the demands against the respondent are not sustainable. Appeal dismissed - decided against appellant-Revenue. - Appeal No. E/633/07 - - - Dated:- 11-1-2018 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri Hitesh Shah, Commr. (A.R.) for Department Shri V. Sridharan, Advocate with Shri Rajesh Ostwal, Advocate for respondent ORDER Per : Ramesh Nair This appeal has been filed by the revenue against Order-in-Original No. 40-42/CEX/2006 dt. 30.10.2006 passed by Commissioner, Central Excise Aurangabad. 2. The brief facts of the case are that the Respondent M/s Videocon International Ltd. had obtained permission from the Development Commissioner, SEEPEZ, Mumbai to sell the goods, i.e. Television Receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority vide impugned Order dt. 30.10.2006 set aside the demands. Hence, the present appeal. 3. Shri Hitesh Shah, Ld. Commissioner (A.R.) appearing for the Revenue submitted that the basis of valuation of DTA cleared goods has to be same for charging Basic Custom Duty as well as CVD, the only difference being that the basic custom duty is added for the purpose of calculation of CVD. In terms of Circular No. 268/85-CX-8 dt 29.09.1994, it provides the best judgment method under points A to D, which indicates the various factors to be taken into account : (a) Sale (Invoice) Price of the goods under assessment; (b) Sale price of other consignment of identical / similar goods; (c) Export price of identical / similar goods; and (d) Nature of sale transaction etc. He submits that placing reliance on item (c) above is not correct as the said para has to be seen in the context of the Circular in its totality. As per circular, the invoice price is in the nature of a transaction value and in conformity with Rule 3 of Customs Valuation Rules, 1988 and hence there would be no need to ascertain the price of identical or similar goods. The aim is to reach close t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. CCE 2003 (154) ELT 500 (TRI), CCE Vs. IGP Ltd 2003 (156) ELT 917 (TRI) and CCE Vs. I.G. Petrochemical 2006 (201) ELT 294 (TRI) as affirmed by the Hon ble Supreme Court in 2015 (318) ELT 600 (SC). He submits that in the above judgments of IGP Ltd. and I.G. Petrochemicals passed by the CESTAT has specifically rejected the price by an EOU to DTA as Transaction value/ assessable value and the same was upheld by the Hon ble Supreme Court. He also relies upon the Tribunal s order in case of Axiom Impex International Ltd. Vs. CCE 2016 TIOL 918 CESTAT MUM and following judgments : (i) CC Vs. WIPRO GE MEDICAL 2009 (242) ELT 275 (TRI) (ii) TATA COFFEE LTD. Vs. CCE 2004 (168) ELT 460 (TRI) (iii) HANIL ERA TEXTILES LTD. Vs CCE 2005 (192) ELT 1109 (TRI) (iv) CCE Vs. KRISHNA FILAMENTS 2005 (189) ELT 175 (TRI) (v) STL EXPORTS LTD. Vs. CCE 2004 (178) ELT 307 (TRI) He submits that the price at which the goods are sold by EOU in DTA is not a price in the course of international trade or price of the goods for export to India. Section 14 of the Customs Act, 1962 applies to goods physically imported into lndia. The price charged for the EOU from the buyer in DTA is not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of payment of BCD. There is no co-relation between the body of show cause notice and the computation of demand. It is not the case where the transaction value was not furnished by the Respondent to the Department and in the absence of the same, the Department has chosen to demand duty on MRP. The Respondent submitted the information relating to transaction value, but the Department did not demand the duty based on transaction value. Having consciously chosen to apply a particular path, the Department cannot change its stand beyond the show cause notice. The Department, in its appeal, has not cited any provision of law where the demand of BCD based on MRP can be sustained and hence that portion of the Commissioner s order dealing with the issue is correct and stands. 6. The present case is re-opening of assessment under section 11A and not denial of exemption notification, hence the burden is on department to prove the correctness of value adopted by them. The Ld. DR has submitted that they have applied the best judgment assessment under Rule 8 of the Customs Valuation Rules, 1988. The revenue is attempting to determine the transaction value which is incorrect. That the AR has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions and judgments cited by them. The revenue is demanding duty on the basis of transaction value whereas the Respondent has resorted to valuation of goods for the purpose of paying basic custom duty on the basis of FOB value of the like goods being exported by them. However we find that the duty demand has been computed on the basis of MRP of the goods without citing any provision of law where the demand of duty based on MRP can be sustained which was also gone through by the adjudicating authority and demands were dropped. The Transaction value as per Rule 4 of the Customs Valuation Rules, 1988 is the price of imported goods actually paid or payable for the goods when sold for exports to India adjusted in accordance with Rule 9 of Custom Valuation Rules. However we find that no documents have been relied upon in the show cause notice that the price charged or paid was more than FOB Value. The Respondent has also pointed out that the whole of the details of clearance and prices was submitted by them to the department, however the same has not been relied upon and instead the basis of demand is MRP which nowhere finds favour as basis for demand under Valuation Rules. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in the appeal is that the price at which the respondent sold the goods to the buyers forms its transaction value, and therefore is in accordance with the provisions of Rule 3 of the Customs Valuation Rules. This contention is clearly unacceptable. The transaction value referred to in Rule 3 of the Customs Valuation Rules is the value of goods when sold in the course of an international trade by a buyer to seller. Merely because there is, in this case, the transaction of purchase and sale, it does not follow that the value of that transaction is identical to the transaction value referred to in Rule 3 of the Valuation Rules. The position has been explained by the decision of the Tribunal in Morarjee Brembana Ltd. v. CCE (Appeal E/167/01). Therefore unless it can be shown that the price at which the respondent sold the goods to buyers in domestic market was identical with or approximately closely with the price at which the value of goods imported, that value cannot be accepted . The above judgement has also been affirmed by the Hon ble Apex Court as reported in 2015 (318) ELT 600 (SC). Further in case of CCE Vs I.G. Petrochemicals 2006 (201) ELT 294 (T) the Tribunal held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rway and Dubai, it has been said that the export price are for Dubai and Norway, which is not relevant to goods imported to India. These observations run contrary to the circular of the CBE C. The circular specifically mentions that the export price of the similar / identical commodity would be a relevant factor in determining the clearance to DTA. It is seen that the Commissioner (Appeals) order runs contrary to the Circular of CBE C. The order of Commissioner (Appeals) is set aside and the matter is remanded to the Commissioner (Appeals) to re-adjudicate the matter in light of Circular of CBE C without ignoring the export price of yarn Similar views has been adopted by the Tribunal in following judgments : (i) CC Vs Wipro Ge Medical 2009 (242) ELT 275 (T) (ii) Tata Coffee Ltd Vs. CCE 2004 (168) ELT 460 (T) (iii) Hanil Era Textiles Ltd Vs. CCE, Raigad 2005 (192) ELT 1109 (T) (iv) CCE Vs. Krishna Filaments 2005 (189) ELT 175 (T) (v) STL Exports Ltd Vs CCE 2004 (178) ELT 307 (T) In view of above judgments wherein the Tribunal and the Apex Court has rejected the price by an EOU to DTA as transaction value and held that the FOB value of exports w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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