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TMI Blog2019 (2) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... value and thereafter to proceed with the re-assessment, after due enhancement. Explanation (1)(i)(iii)(a) in Rule 12 appears to have applied by the adjudicating authority in the present case. HR Coil and HR Steel Plates cannot be said to be similar or identical goods. If the revenue is rejecting the value declared by the respondent, then they are bound to prove beyond reasonable doubt that the goods compared with are similar goods or identical goods - HR Coils and HR Plates cannot be termed as one and the same for the purpose of contemporaneous value. Both the goods are different in nature and therefore the values relied upon by the Department for enhancement of declared value is not legally sustainable. The Adjudicating Authority has erred in rejecting the declared price/transaction value of the goods imported by the respondent by taking recourse to Rule 12 of Customs Valuation Rules, 2007. Section 14 of Customs Act, 1962 as well as Custom Valuation Rules, 2007 do not sanction such a method, as adopted by the Adjudicating Authority, for redetermination of assessable value - appeal dismissed - decided against Revenue. - APPEAL NO: C/272/2010 - A/85134/2019 - Dated:- 18-1-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice on the date of Contract Letter of Credit as a transaction value instead of contemporaneous import price prevailing at the time and place of import. According to him as per section 14 of Customs Act, 1962 value of imported goods shall be transaction value of such goods when sold for export in India for delivery at the time and place of importation and therefore time and place of import is relevant date for valuation of imported goods and not the time and date of contract or agreement or Letter of Credit opening date. In support of his submission he cited the decision of Hon ble Supreme Court in the matter of Rajkumar Knitting Mills Pvt. Ltd. vs. Collector of Customs, Bombay; 1998(98) ELT 292 (SC) in which the Hon ble Supreme Court has laid down that the words ordinarily sold or offered for sale do not refer to contract between the supplier and the importer, but to the prevailing price in the market on the date of importation or the date of exportation. He also relied upon the decision of Hon ble Supreme Court in the matter of Ispat Industries Ltd. vs. Commissioner of Customs, Mumbai; 2006 (202) ELT 561 (SC) in which the Hon ble Supreme Court has laid down that actual pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation. - For the purposes of this section - (a) rate of exchange means the rate of exchange (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b) foreign currency and Indian currency have the meanings respectively assigned to them in clause (m) and clause (q) of Section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). Valuation is covered by Section 14 of the Customs Act. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raise doubts on the truth or accuracy of the declared value based on certain reasons which may include (a) The significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the mis-declaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. The valuation of imported goods is required to be done in terms of Section 14 ibid read with the Customs Valuation Rules, 2007. The transaction value of imported goods can be rejected only as per the provisions of Rule 12 ibid. Now we have to see whether in the facts of the present case, the value can be rejected under Rule 12 ibid. As per Clause (iii) of explanation under Rule 12, if contemporary import of identical or si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods. 7. We are in complete agreement with the finding of the ld. Commissioner that there is nothing in the order of the Adjudicating Authority whether the HR Steel Plates and HR Coils perform the same function and whether they are commercially interchangeable. The relevant extract of the impugned order passed by the ld. Commissioner is as under:- xxx xxx xxx There is no finding in the impugned order whether the HR Steel Plates and HR Coils perform the same function and whether they are commercially interchangeable. In fact the opposite is true: Both are employed for different purposes and they are not commercially interchangeable. For instance, auto industry extensively uses HR coils (and not HR Steel Plates) and it would not be commercially expedient to substitute plates for the jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, when the contracted prices were in tune with the LME prices. The impugned orders acknowledged the two contracts in the very first paragraph. 5.1 As regards the difference of US $ 15 pMT in the HR Coils contracted for import from two different suppliers within about a month, the appellant attributed the difference to such factors as follows: (i) The average weight per coil of imports from M/s Duferco SA (made in Ukraine) is about 7-8 MT (to be cleared under b/e # 904752). So the percentage of wastage (due to discarding beginning and end portions) in such small coil is considerably more than in larger coils such as those imported from SeverSta (and to be cleared under the b/e # 908521). Therefore, the small coils sell cheaper than larger coils. (ii) The quality of coils imported from Sever Stal is better (being a much larger mill) than those imported from Duferco. (iii) The appellant had contracted for import of 5000 MT from Duferco and for 3650 MT from SeverStal. So they got a better deal from Duferco (@ 385 pMT). In my opinion, not only the difference of US $ 15pMT but also the genuineness of prices themselves are satisfactorily explained by the appellant. 5.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions and case laws placed on record we find that the imported goods namely HR Coils cannot be compared with HR Plates as has been done by both the lower authorities for enhancement of the declared transaction values. The learned Counsel for the appellant has also pointed out that at para 8.3 of the order-in-original, where a table of contemporaneous import with description of goods etc. shows that in respect of HR Coils the lowest value declared was USD 385 PMT and the values declared by the appellant are higher than the said values. We agree with the said submission. We also note that Revenue has failed to establish the payment of any additional consideration over and above the declared transaction value. Having gone through the decisions relied upon by the appellant, we are of the opinion that the said decision(s) squarely covers the issue before us and the rejection of transaction value and enhancement of the same by the lower authority is not legally sustainable. Therefore, the values declared by the Appellant have to be accepted. 6. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any. During the course of hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3). 14. In the present case, we find that the adjudicating authority has not recorded any specific reason for disregarding the transaction value, other than the suspicion that values are misdeclared as seen by comparison with various other bills of entry, as is cited in the show cause notice. Hence, we conclude that rejection of the transaction value was not strictly in terms of the provisions of Customs Act read with the Customs Valuation Rules as held by the Hon ble Apex Court. 11. From the case records we find that the revenue has failed to establish its claim on the basis of contemporaneous import. The major factor which prompted the learned Commissioner to set aside the order-in-assessment passed by the Adjudication Authority was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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