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TMI Blog2019 (2) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... 009. 2. The goods in question i.e. 200 bags containing 1000 MTs of Polyester Chips Semi Dull Raw White A Grade was originally consigned to India from China for importer M/S Filatex (India) Ltd. in the month of August, 2008 and the unit price of the same as agreed between the parties was @ USD 1400/MT, however the said importer i.e. M/s. Filatex (India) Ltd. did not clear the goods and also refused to honour the bank L.C. Thereafter the exporter of the goods located in China contacted the Respondents i.e. M/s Sun Tex for resale of their goods since it was incurring heavy detention and demurrage charges and also because the goods were getting deteriorated and the exporter from China was not getting any other buyer to buy the goods. The said exporter entered into an agreement in the month of December, 2008 with the Respondents and the Respondents agreed to buy the said goods @ USD 600/MT subject to the condition that payment of all detention and demurrage charges will be born by the Respondents. In this matter the detention and demurrage charges alone compute to USD 505/MT. After the finalisation of the agreement, the Respondents filed bill of entry in the month of January, 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent and perused the records. We have also gone through the case laws discussed by the learned Commissioner in the impugned order as well as the case laws cited before us by the learned Authorised Representative for the Revenue and the learned Counsel for the Respondent. The learned Authorised Representative on behalf of the Revenue submitted that the goods in question landed at Landmass of India on 23.8.2018 and therefore it became liable for tax of on that date itself. He further submitted that since the earlier importer did not take the delivery of the goods in question and thus the title was left with the overseas exporter/supplier itself. According to him the provision of section 14 of the Customs Act is not applicable in instant matter because the goods in question had landed on 23.8.2008 on Indian landmass and when the goods were not taken for delivery by the 1st importer it were not exported back to China, therefore it implies that while entering into fresh sale deal when the appellant, the goods in question were already in India. He further submitted that there is no clause or provision in the Custom Valuation Rules or Customs Act which prescribes that the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed stay application before this Tribunal and this Tribunal vide order dated 4.3.2011 dismissed the same with the observation that prima facie the Revenue has not shown that the subject transaction would attract any of the exceptions enumerated in Rule 4(2) and therefore the decision of learned Commissioner (Appeals) to accept the declared transaction value cannot be faulted. 7. In order to appreciate the issue involved in this Appeal, it is necessary to go through Section 14 of the Customs Act, 1962 relating to valuation of goods, which is extracted as under:- Section 14. Valuation of goods. - 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 export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 export to India for delivery at the time and place of importation. However, Section 14(2) provides that if the Board is satisfied that it is necessary or expedient, it may, by notification in the official gazette, fix tariff values for any class of imported goods or export goods, for the reasons contained therein. In view of the above, duty on imported goods is to be charged on the transaction value of the goods and for determining the transaction value, the following ingredients are required:- (i) The price should actually be paid or payable when the imported goods are sold for export to India. (ii) The imported goods should be for delivery at the time and place of importation. (iii) The buyer and seller of the goods are not related. And (iv) The price should be the sole consideration for the sale. 8. It is admitted that in the instant matter earlier the importer was somebody else i.e. M/s. Filatex, although they agreed the price @ USD 1400/MT but did not take the delivery nor honor the bank L.C. They al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Revenue that the goods in question were landed at land mass of India vide IGM dated 23.8.2008 and hence became taxable on that date itself. We cannot accept this submission because in the case of Garden Silk Mills Ltd. vs. UOI; 1993(113) ELT 358(SC), which has been referred by Revenue at the time of hearing, the Hon ble Supreme Court has laid down that Taxable event is reached when the goods reach the Customs barrier and Bill of Entry for home consumption is filed. Admittedly in the present case the Bills of Entry were filed by respondent only and that too on 2.1.2009. No Bill of Entry was filed by the earlier importer who neither took the delivery of the goods nor made any payments either to the exporter or to the Customs authorities. Another important aspect of the matter is that if the earlier importer i.e. M/s. Filatex did not take the delivery of the goods in the month of August 2008 when they were imported, the title was remained with the overseas exporter only and it was transferred only in the month December, 2008 or January, 2009 when the respondents entered into contract with the exporter and made the payment to the exporter as well as to the Customs authorities in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er have no interest in the business of each other and the price is the sole consideration for the sale.......... . Subject to these three conditions laid down in Section 14(1) of time, place and absence of special circumstances, the price of imported goods is to be determined under Section 14(1A) in accordance with the rules framed in this behalf. 7. The rules which have been framed are the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The rules came into force on 16th August, 1988. Under Rule 3(i) the value of imported goods shall be the transaction value . Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1) in turn states: The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. 8. Reading Rule 3(i) and Rule 4(1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4(2). Payable in the context of the language of Rule 4(1) must, therefore, be read as referring to the particular transaction and payability in respect of the transaction envisages a situation where payment of price may be deferred. 12. The Hon ble Supreme Court in the matter of Chaudhary Ship Breakers Vs. Commissioner of Customs, Ahmedabad; 2010 (259) ELT 161(SC) while interpreting Section 14 of Customs Act and Rule 3 4 of Customs Valuation Rules, 1988 has laid down as under:- 15. According to Section 14(1) of the Act, assessment of customs duty under the Customs Tariff Act, 1975 is to be made on the value of the goods imported. Unless the value of the goods is fixed under the sub-section (2) of Section 14, the value has to be determined under sub-section (1) of the said Section. The value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n into consideration for determining the assessable value in terms of the main definition of the term value given under sub-section (1) of Section 14 of the Act. The Customs authorities are bound to assess duty on the transaction value. Only in exceptions specified in Section 14 of the Customs Act, 1962 the department can follow Customs Valuation Rules. In the present proceedings before us supplier of goods and importer are not related persons and there is no evidence on record that any amount in excess of what has been declared by the respondents has been repatriated by the respondents. Since the respondents had to incur additional expenses of Detention and Demurrage charges which compounds and computes to USD 505/MT, that was the reason that the price offered by them is only USD 600/MT for which Bill of Entry was filed and according to us that is well reasoned explanation for quoting the price in question. In these circumstances, there is no ground for rejecting the transaction value and we hereby upheld the impugned order of the learned Commission and the Appeal filed by the Revenue is rejected. (Pronounced in Court on 22.01.2019) (Sanjiv Srivastava) Member (Techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging the goods at the port of import does not ipso facto give the importer a right to take the delivery thereof. 10. Chapter VI of the Act contains the provisions relating to conveyances carrying imported or exported goods. Chapter VII of the Act contains provisions regarding the clearance of imported goods and export goods. Reading the provisions contained in the said chapters, it becomes apparent that all goods carried by vessel or aircraft entering from any place outside India has to land the goods at a customs port or customs airport and that too with the permission of the Customs Officer (Section 29). 11. The import manifest of the vessel is required to be delivered to the Customs Officer in terms of Section 30. Unloading of imported goods can take place only after the import manifest has been delivered and an order permitting entry inwards of the vessel has been given by the Customs Officer in terms of Section 31. Section 32 provides that unloading of only those goods is permitted as are mentioned in import manifest. The goods are to be unloaded as per Section 33 only at the place which is approved for that purpose and the same cannot be unloaded excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct namely that the C.I.F. price represents the value of the imported goods, then the Section 14 would have been differently worded. It could, for instance, have easily been stated that the value of the imported goods would be the transaction value of the goods. The language of Section 14 clearly indicates that though the transaction value may be a relevant consideration, the value for the purpose of Customs duty will have to be determined by the Customs Authorities which value can be more, and at times even less, than what is indicated in the documents of purchase or sale. 15. The question as to whether the import is completed when the goods entered the territorial waters and it is the value at that point of time which is to be taken into consideration is no longer res integra. This contention was raised in Union of India v. Apar Industries Limited - 1999 (112) E.L.T. 3 (S.C.) = 1999 (5) J.T. 160. In that case the day when the goods entered the territorial waters, the rate of duty was nil but when they were removed from the warehouse, the duty had become leviable. The contention which was sought to be raised was that what is material is the day when the goods had ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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