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TMI Blog2018 (10) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ble at the time of import with any other amount as mentioned in the proviso to Section 14 above to be added to the said transaction value. Further perusal of Rule 10(2)(c) (i) it details such costs which have to be included while assessing the cost of transport. Rule 10(2) (c) (iii) makes it clear that such cost has also to include the insurance value of 1.125% of FOB value of the goods. It is an admitted case that the said value has been added by the appellant while computing the cost of transport of imported goods herein. For 36 invoices where there is a clear bifurcation about the amount of air freight involved and that the same has been paid by the supplier and has been included in the C F value paid by the appellant, the amount is absolutely ascertainable. In such case the amount has not to exceed 20% of FOB value. It is admitted case of Department that the freight is at the rate of 10% / 11.11 % i.e. much less than 20%. No question arises for enhancing this value to the extent of 20%, in view of the words shall not exceed 20% of freight on board value of goods . Invoices where there is no bifurcation for air freight but the C F amount - Held that:- It is observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplier, the FOB value and Air Freight were indicated separately. Resultantly, a show causer notice dated 13.02.2013 was served upon them alleging that the value of consignment has been mis-declared with intent to evade the customs duties and the demand for the said difference was proposed along with the appropriate interest and the penalties not only upon the importing company but upon the Directors thereof, as well. The said show cause notice was initially adjudicated vide Order in-Original No.10/15 dated 28.04.2015 vide which the proposed demand was confirmed. Being aggrieved, an appeal before Commissioner (Appeals) was filed, who vide the impugned order has upheld the said decision. Being aggrieved, the appeals in hand have been filed. 3. We have heard Mr. S.C. Jain, ld Counsel for the appellant and Mr. Rakesh Kumar Mr. Sunil Kumar, ld. DRs for the Department. 4. It is submitted on behalf of the appellant that irrespective there are two kinds of the invoices one having a consolidated C F amount, another having a bifurcation of CIF amount into FOB and air freight, the fact remains is the said C F value is the transaction value. Section 14 of Customs Act, 1962 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue even for those invoices where the C F value does not show any bifurcation, the proviso to Rule 10 (2) of Customs Valuation Rules, has been impressed upon while issuing the impugned show cause notice. The adjudicating authority further observed it to be an admitted fact that all the consignments have been imported on C F basis irrespective the invoices have bifurcated the C F value or not. 6.2. The moot questions for consideration therefore, are: (1) whether the appellant was to discharge the liability on the said C F amount only. (2) Whether the freight irrespective mentioned separately or not, should be considered at the rate of 20% of FOB value while discharging the liability. 6.3. For the purpose it is important to look into these statutory provisions. Section 14 of Customs Act, 1962 is about valuation of goods. It reads as follows:- SECTION 14. Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; (d) The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller; (e) all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable. Explanation.- Where the royalty, licence fee or any other payment for a process, whether patented or otherwise, is includible referred to in clauses (c) and (e), such charges shall be added to the price actually paid or payable for the imported goods, notwithstanding the fact that such goods may be subjected to the said process after importation of such goods. (2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in the proviso to Section 14 above to be added to the said transaction value. Further perusal of Rule 10(2)(c) (i) it details such costs which have to be included while assessing the cost of transport. Rule 10(2) (c) (iii) makes it clear that such cost has also to include the insurance value of 1.125% of FOB value of the goods. It is an admitted case that the said value has been added by the appellant while computing the cost of transport of imported goods herein. 8. The proviso to this Rule is actually relevant for adjudication of the impugned controversy. Perusal makes it clear that two different conditions are discussed in this proviso (1) where the cost of transport of imported goods is ascertainable, Such cost shall not exceed 20% of free on board value of the goods. Another where this value is not ascertainable, it shall be 20% of free on board value of goods plus cost of insurance. For 36 invoices where there is a clear bifurcation about the amount of air freight involved and that the same has been paid by the supplier and has been included in the C F value paid by the appellant, the amount is absolutely ascertainable. In such case the amount has not to exceed 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volved against the assessee. 11. Resultantly, the onus was of the Department to prove the correct value and the calculation thereof based on Rule 10(2) of Customs Valuation Rules. The said burden is observed as un-discharged. Resultantly, we are of firm opinion that Department has been absolutely wrong while ignoring rather misinterpreting the relevant statutory provisions. The demand as confirmed is therefore hereby set aside. 12. From the above observation, it is clear that appellants have been discharging their liability properly and completely in accordance of the mandate of law. It is Department who took a wrong opinion. No positive act of the appellants could be proved by the Department to establish the alleged intention to evade the duty. Otherwise also when there is no case of short levy, as alleged, no question of intention of evasion at all arises. We therefore, hold that the adjudicating authority below have wrongly imposed the interest as well as the penalties, not only on the importing firm, but on the Directors thereof. As a result, we hold the imposition of interest and penalty as wrong. Accordingly, we hereby set aside the impugned order. Three of the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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