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TMI Blog2018 (10) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,58,21,920/-) from the same supplier. The total number of sets (all types) imported is nearly four lakh sets. The value of the imports, quantity-wise and value-wise from 15.11.2008 to 31.03.2013 is as under:- S/No. Financial Year (Period) Quantity of imports in sets/Pieces. Value of imports (USD) 1. 2008-09 156171 SETS 12,89,645.64 2. 2009-10 218436 SETS & 33324 Pcs 15,60,862.02 3. 2010-11 300571 SETS 13,30,675.30 4. 2011-12 145405 SETS 8,82,010.80 . 2012-13 56098 SETS 3,72,416.90 The respondent have duly filed bills of entry for clearances of the goods describing them as "Glassware" and presented the goods for assessment by the Customs. The goods were assessed to duty under heading 70.13 of the Customs Tariff as 'Glassware of a kind used for table, kitchen, toilet, office and indoor and similar purposes.' The classification claimed in the bills of entry for the imported goods was tariff item 70132900 as 'others'. The goods including the cartons used for packing of the goods were physically verified /examined by the Customs at the time of assessment. The examination report prepared by the officers shows that the goods imported by the respondent is 'opal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -aside the demand and dropped the proceedings. The Revenue, being aggrieved by the said order dated 31.01.2014, filed the present appeal. 2. Shri S.N. Gohil. Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that as per the remand order of the Tribunal, the valuation issue was to be decided by the Adjudicating Authority. As per the imports of contemporary goods from the same supplier M/s. Wenzhou Huishunda Industrial Trade Company Limited, China to M/s. K.P. International were at a significantly higher price. M/s. K.P. International approached to Settlement Commission and had paid differential duty therefore, the price enhanced in the case of K.P. International shall equally apply in the case of the present respondent. Another contemporary import of M/s. Vishal Hira Merchant Limited from the same supplier i.e. M/s. Wenzhou Huishunda Industrial Trade Company Limited, there was huge difference in terms of percentage ranges from 32% to 59%, which is abnormal in the common trade parlance. The respondent declared the goods as Glass Ware irrespective of whether they were Opal ware or Glass ware. There were separate price for Opal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therwise. Rule 3(2) of Customs Valuation Rules, 2007 corresponds to Rule 4(2) of Customs Valuation Rules, 1988. (vi) In the instant case, none of the circumstances specified under Rule 3(2) exists and hence the declared value which is the transaction value, needs to be accepted. It is not even the case of the department that the special circumstances mentioned in Rule 3(2) exists in the present case to reject the transaction value. (vii) The present impugned order is contrary to the law laid down by the Supreme Court in the case of Eicher Tractors Limited vs. CC - 2000 (122) E.L.T. 321 (SC); Tolin Rubbers Pvt. Limited vs. Commissioner - 2004 (163) ELT 289 (SC) and in Commissioner vs. Bureau Veritas-2005 (181) ELT 3 (SC). (viii) The respondents have not paid any amount to the foreign supplier or others directly or indirectly, over and above the value mentioned in the invoice. In other words, the only amount paid to the supplier is the value mentioned in the invoices. There is no averment in the show cause notice to the contrary, let alone there being any evidence for it (ix) The imports were from manufacturers directly, without any intermediary involved. (x) The Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as only enquiring about the prices. No evidences have been given to show that the goods were imported by M/s K.P. International at the prices mentioned in the email. (v) In any event, value under Rule 6(3) can be based on transaction value of similar goods imported by other. When transaction value has been rejected for other import and enhanced value adopted for others, that enhanced value cannot be the basis of assessment of goods under Rule 6(3) as transaction value of similar goods. (vi) The detailed submissions made in the reply dated 14.08.2007 and written submissions dated 13.07.2007 and 25.08.2007 were reiterated in this regard. 5. On applicability of Rule 6, he submits that Rule 6(2) read with Rule 5(3) clearly provides that lowest value of the similar goods imported into India has to be adopted. The department has not produced all the imports of similar goods imported into India. Hence, the mandate of Rule 6 has not been complied with. He submits that the respondents produced evidences in the form of bills of entry under which others imported the similar goods from the same supplier, at a price lower than the price at which the respondents had imported them. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion claimed by the appellant was 7013 39 00 whereas the proposal by the department is 7013 32 00. It was submitted by the appellants that test report relied upon by the department do not show that the product imported by the appellants satisfies the condition related to coefficient of expansion being less than 5 x 10-6 per Kelvin. 6. Samples were drawn from the consignment pending clearance and according to the test report, the samples under reference were 'borosilicate glassware', Opal ware containing boric acid ranging from 9.68% to 12.27%, showing no thermal expansion between 0 degree C. to 300 degree C. and no breakage on heating and cooling indicating lower linear expansion. The Chemical Examiner also indicated that the samples received were translucent in nature and according to ASTM standard 162, this type of glass is called Opal Glass. He also stated that the samples have more than 5% boric acid. Therefore, they are of borosilicate glass type (ASTM 162). The samples has been sent for testing of borosilicate content, the thermal resistance, between 0 to 300 degree C. and linear coefficient expansion. The question that arises is whether this report is sufficient to hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CGCRI on the ground that what samples were forwarded to CGCRI is not known and at what temperature the test was conducted by CGCRI was also not known. 8. From the tariff description and the headings reproduced earlier, it can be seen that the sole criterion required to be fulfilled for items imported to be classified under 7013 32 00, is the linear coefficient of expansion. The test memos had clearly indicated that this aspect is required to be verified. The Chemical Examiner has chosen just to say that since there was no breakage, the thermal expansion is nil. When the heading required specific indication that linear coefficient of expansion is less than 5 x 10-6 per Kelvin, in our opinion, this statement of the Chemical Examiner was not sufficient. In fact, the department should have required the Chemical Examiner to specifically indicate the linear coefficient of thermal expansion. Therefore, when the appellants requested for retest by CGCRI, Kolkatta, it could have been considered. In any case option was available to the department to send it for retest to the Chief Chemist at Delhi which was also not done. On the one hand, we have a blank statement from the Chemical Examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpansion and not merely the percentage of boron oxide or the trade name Opal Glass. 10. In view of the above discussion, the findings of misdeclaration of description and misclassification cannot be sustained. 11. The next is the rejection of transaction value and determination of value. According to the appellants, once there was no misdeclaration of the goods by appellants, the transaction value cannot be rejected since that is the only ground taken. However, we have to take note of the fact that the whole investigation started based on recovery of 2 invoices with an importer in Delhi which showed price of goods imported by the appellant to be much higher when compared to what was declared by them. The transaction value is rejected on the ground that even though the appellant claimed that imports were made according to an MoU, but in reality the MoU was available for only 10" full plate and 7" quarter plate and in respect of their items, they could not produce the MoU. The Commissioner also found that after 2006, there was no fresh MoU and basis of price and specific shapes of new mould could not be found out. As regards claim of the appellant that the goods were speciall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had long time arrangement and were regular buyers and had imported glassware of more than Rs. 18.5 crores and they had produced evidence to show that the value declared by the supplier at the time of export to the Customs authorities, was the same as was declared in India; as regards price list, appellant has submitted that it is only an offer and subject to negotiations; it was also submitted that M/s. K.P. International have not imported any goods, but there was only negotiations; under these circumstances, Rule 6(2) read with Rule 5(3) of the Customs Valuation Rules is applicable which provides that value of goods similar to goods imported to India should have been adopted. The appellants had produced evidence in the form of Bills of Entry under which others had imported similar goods from same suppliers and such prices were lower than prices adopted in their case and, therefore, differential duty demanded is not sustainable. 13. The claim of such imports by others at lower values has been rejected holding that it was for other jurisdictional authorities to take action. We find that this was an incorrect observation. Absence of any evidence to show and any admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether price list of supplier is applicable irrespective of the quantities the purchaser buys and if it is comparable to the point it is purchased by the appellants. 14. The above discussion would show that the Commissioner has not followed proper procedure for redetermination of value and for rejection also while initial grounds for rejection are acceptable after giving an opportunity to the importer and considering the submissions, there has to be a categorical finding as to why the transaction value is not acceptable. In this case the two grounds for rejection of transaction value is mis-declaration of value and inability of the General Manager to explain the difference between their price and price list, dated 9-2-2004 of the supplier. If the General Manager could not explain it at the time of investigation, it does not mean that they could be permanently shut out from explaining afterwards. Therefore, the submissions made during the hearing and in reply to the show cause notice should have been considered. 15. In view of the above discussion, the impugned order is set aside and the matter is remanded to the Original Adjudicating Authority for fresh adjudication afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as "M/s VHMPL" for the sake of brevity). In that case, Delhi DRI officers recovered the rafle1 invoice No. HSD-2-04-1541 dated 01.03.05 (depicting the actual value of the imported goods) raised by M/s Wenzhou for the import of Opal wares by the firm M/s VHMPL (RUD-21).The issuance of parallel invoices by MIs Wenzhou establishes the fact that to accommodate/ facilitate their buyers in India, M/s Wenzhou were raisins the manipulated invoices especially for the sake of undervaluation of the imported goods and for presenting the manipulated invoices before the Customs authorities in India, The modus adopted by M/s Wenzhou and the importers in India cast shadow on the bona-fide credentials on both the parts and had resulted in the loss to the Exchequer." From the above allegation in the show cause notice, it is clear that even for the charge of undervaluation, the reason stated is mis-declaration of the description of Opal ware as Glass ware and the claim of classification of goods is under CTH 7013 39 00 instead of under CTH 7013 32 00. Since, now the charge of misdeclaration of goods and classification does not exist, the case of undervaluation of the Revenue fails on this gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent. For this reason also, the value declared by the respondent cannot be rejected. The Revenue has no evidence that there is any extra consideration paid by the respondent to supplier of Glassware, therefore, there is no material at all to suggest that there is undervaluation of the goods imported by the respondent. In these circumstances, the rejection of declared value is improper and illegal. The case of the respondent is covered by the Hon'ble Supreme Court judgment in the case of Eicher Tractors Limited vs. CC - 2000 (122) ELT 321 (SC). As regards the submissions of ld. Counsel on the issue of limitation with reference to the show cause notice dated 23.03.2007, which was issued for the period covering from May 2005 to May 2006, we find that the extended period was invoked mainly on the allegation that the respondent have mis-declared the description and classification of the goods. As discussed above, the Tribunal in the first round, set-aside the charge of mis- declaration of description and classification. Therefore, in this scenario, when no mis-declaration is involved, no suppression of facts exists. Hence, the extended period for demands proposed in the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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