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TMI Blog2019 (4) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not simultaneously have ignored the imports under the same trademark, from different countries, where there were no related parties. Naturally, there would have to be made adjustments for the distance from which the import was made, or the size of the consignment, if applicable, as set out in Rules 3 to 5. There was really no occasion to straightaway proceed to determine the transactional value by relying on Rules 7 to 9 - there is no doubt this principle of sequential application would apply, especially in view of sub-Rule (4) of Rule 3, which provides that there has to be a sequential implementation of the Rules, i.e., that Rules 3 to 5 would have to be exhausted first, and only in the eventuality of an inability to apply the Rules would the assessing authority proceed to impose Rules 7 to 9. Thus, there appears to be a fundamental mistake committed in the manner of implementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner. The matter remitted back to the Principal Commissioner of Customs (Preventive), Customs, New Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The aforesaid proceedings, as noticed, resulted in an adverse order against the appellant by the authorities, resulting in the imposition of differential duty of about ₹ 9.53 lakhs for the consignment in question, and around ₹ 1.23 crores for the past consignments. The goods were held liable for confiscation, and were ordered to be released on payment of redemption fine, with the levy of ₹ 13 lakhs penalty imposed on the Directors of the appellant (appellants in CA No.3138/2018 CA No.3139/2018). A perusal of the order shows that the valuation of the goods had been made under Rule 7 and Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred to as the said Rules ). It is this very method of valuation which is sought to be assailed by the appellants on a reasoning that the scheme of the Rules has not been correctly understood and implemented by the competent authority. In order to appreciate the contention of the appellants in the context of the Rules, we proceed to discuss the scheme of the Rules. 4. It is appropriate to first refer to the definition clauses under Rule 2, where, the expressions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relationship did not influence the price. We reproduce the relevant extracts as under: 3. Determination of the method of valuation.- xxxx xxxx xxxx xxxx (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price, (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods: Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The aforesaid Rule envisages that the transaction value of identical goods imported at the same time as the goods valued, can be applied. It is, of course, clarified that they should be substantially of the same quantity, as there can be variation in pricing, depending on the size of the consignment. In case identical goods sold are not found in respect of the same quantity, different quantities of identical goods can be taken into account, with adjustments made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracies of adjustment. The difference in distance, having implication on the transport cost, is another factor mentioned under the Rules. It is lastly clarified that the lowest of such value is to be used to determine the value of the goods. 9. On identical goods not being available, we have to turn to Rule 5, which is transaction value of similar goods. Rule 5 reads as under: 5. Transaction value of similar goods.- (1)Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of imported goods shall be based on a computed value, which shall consist of the sum of:- (a) the cost or value of materials and fabrication or other processing employed in producing the imported goods; (b) an amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to India; (c) the cost or value of all other expenses under sub-rule (2) of rule 10. 11. In order to complete the reference to the Rules, for their understanding, we refer also to Rule 9, which reads as under: 9. Residual method.- (1) Subject to the provisions of rule 3, where the value of imported goods cannot be determined under the provisions of any of the preceding rules, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India; Provided that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brands really do not attract any intrinsic market value. 14. It is a submission that the sequential application of Rules, thus, required the valuation to be done in accordance with Rules 3 to 5, before proceeding to the subsequent Rules, and it is not a case where valuation was not possible under Rules 3 to 5. 15. As an alternative submission, it was also pleaded that even where identical or similar goods are not available, data is available, of the value of the goods in the National Import Database ( NIDB ) or the Department of Valuation database ( DOV ). 16. In a nutshell, the submission really is that the valuation was possible on the basis of import from the other two countries if the brand was to be given some significance, and in the alternative, if the plea was accepted that the brand was not of any significance, then the other imports from the U.K. of the same kind of lights could be taken into consideration. It was clarified that the endeavour was not to compare oranges and apples, but to compare apples of a particular variety with the apples of the same variety, i.e., if it was one lamp light, it was to be compared with one lamp light. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ardsticks the finding of the Tribunal in this case is unassailable. We are, however, of the view that if a fact finding authority comes to a conclusion within the above parameters honestly and bona fide, the fact that another authority be it the Supreme Court or the High Court may have a different perspective of that question, in our opinion, is no ground to interfere with that finding in an appeal from such a finding. In the new scheme of things, the Tribunals have been entrusted with the authority and the jurisdiction to decide the questions involving determination of the rate of duty of excise or to the value of goods for purposes of assessment. An appeal has been provided to this Court to oversee that the subordinate tribunals act within the law. Merely because another view might be possible by a competent court of law is no ground for interference under Section 130-E of the Act though in relation to the rate of duty of customs or to the value of goods for purposes of assessment, the amplitude of appeal is unlimited. But because the jurisdiction is unlimited, there is inherent limitation imposed in such appeals. The Tribunal has not deviated from the path of correct principle a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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