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TMI Blog2019 (5) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Notification No 94/2007-Cus (NT) dated 13.09.2007. The assessable value is re-determined in terms of Rule 10(2) of the Valuation (Determination of Imported Goods) Rules, 2007 for a 20' container as US$ 3180.74 equivalent to Rs. 128849.97 and for a 40' container as US$ 5088.38 equivalent to Rs. 206079/- [@ US$1 = Rs. 40.50 as conversion rate for the month of May 2008] on the basis of container one way lease agreement dated 06.05.2008. Hence the assessable value of the imported 123 dry containers of size 20' and 34 dry containers of size 40' comes to Rs. 1,58,44,737/- and Rs. 70,06,6856/- respectively. Thus the total re-determined assessable vale of these 157 dry containers comes to Rs. 2,28,51,423/- and hence, the total Customs Duty payable @ 10%+14%+2%+1%+4% comes to Rs. 72,43,904/- (Rupees Seventy Two Lakhs Forty Three Thousand Nine Hundred and Four Only). The importer, M/s Jindal Waterways Limited at the time when the consignments of the three Post Bills of Entry were assessed to had paid duty of Rs. 68,53,440/- vide Challan No HC/557, HC/562 and HC/559 dated 26-09-2008. Hence, the importer, M/s Jindal Waterways Limited and Steamer Agent M/s Hyundai Merchant Marine Pvt (India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18/- (Rupees Twenty Nine Lakhs Eighty Thousand Nine Hundred and Eighteen Only). The importer and M/s Hyundai Merchant Marine India Pvt Ltd., the steamer agent at the time when the consignments were assessed to had paid duty of Rs. 21,39,681/- vide Challan No 312 dated 05-06-2008. Hence, the importer, M/s Jindal Waterways Limited and Steamer Agent M/s Hyundai Merchant Marine Pvt (India) Limited are liable to pay differential duty of Rs. 8,41,237/- (Rs. 29,80,918/- - Rs. 21,39,681/-) (Rupees Eight Lakh Forty One Thousand Two Hundred Thirty Seven only) along with interest thereon. 4.1.2 All the 67 dry containers totally valued at Rs. 94,03,528/- (Rupees Ninety Four Lakhs Fifty Three Thousand Five Hundred and Twenty Eight only) are confiscated under section 111(d), 111(f) & 111 (m) of the Customs Act, 1962. However an option is given to M/s Hyundai Merchant Pvt (India) Limited to redeem these 157 dry containers on payment of redemption fine of Rs. 10,00,000/- (Rupees Ten Lakhs only) under section 125 of the Customs Act, 1962. 4.1.3 Penalty of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand Only) is imposed on M/s Jindal Waterways Limited under Section 112(a) and (b)(iii) of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the opportunity of personal hearing to the appellants. 3.1 In their appeal, appellants have challenged the impugned order stating, that: i. They had declared the value of the empty container on the basis of the transaction value between themselves and the Chinese supplier. Transaction value could not have been rejected except in the circumstances specified in Rule 3 (2) of the Customs Valuation Rules, 2007. ii. Replacement cost could not have been considered as transaction value for the goods imported, and even if the transaction value was to be rejected the assessable value should have been determined by the sequential application of Rules 4 to 9. iii. In absence of any proof of extra remittances to the foreign supplier revenue has not discharged the burden of proof for rejecting the transaction value. iv. Since the demand made on the basis of rejection of transaction value cannot sustain, demand of interest to will fail. v. Goods are not liable for confiscation by invoking the provisions of Section 111 (d), (f) and (m). Since the goods are not liable for confiscation the redemption fine imposed cannot be sustained. vi. Since the goods are not liable for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is evident from the paras of order reproduce above. Nothing has been brought on record to show that the value determined by the Commissioner is erroneous. The value has been determined by the Commissioner on the basis of replacement cost agreed between Appellant 1 and Appellant 2. Since the replacement cost represent the intrinsic value of container, agreed upon between the lessor and lessee in the one way lease, the same is basis of value. Hon'ble Supreme Court has in case of Garden Silk Mills [1999 (113) ELT 358 (SC)] held as follows: "8. On a careful analysis it is evident that the principles of valuation incorporated in Section 14(1)(a) of the Act therein show that : (a) the price is a deemed price; (b) at which such or like goods are ordinarily sold or offered for sale; (c) for delivery at the time and the place of importation or exportation; (d) in the course of international trade; (e) where the seller and the buyer have no interest in the business of each other and (f) the price is the sole consideration for the sale or offer for sale. 9. This Section clearly indicates that it is not the price stated in the CIF contract which alone is to be accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been examined and it has been decided that procedure of domestication of temporarily imported containers on re-export condition will not be permitted in the normal course. Marine containers imported for domestic use, shall be cleared by filing a Bill of Entry for Home Consumption by the importer, on payment of duty. The Shipping Lines should ensure that such containers are duly manifested and they shall be supported by requisite documents such as B/L, Invoice, etc. Applications for additional entry in the manifest for cases, not already manifested in IGM, will be considered on production of supporting evidence such as one way lease agreement, Bill of Lading etc. After scrutiny of the application by the Competent Authority, such additional entry in the respective IGM will be considered on merits. The importer will have to file the Bill of Entry for such Importation of containers and the clearance will be allowed after assessment and payment of duty as per normal procedure for imported goods. 3. Importer/Shipping Line shall ensure that Empty containers, after de-stuffing of cargo shall remain in concerned CFS, till out of charge of such container is given by Customs. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n invoice of foreign supplier without holding that the invoice was forged or manipulated. Since it is not so clause "m" of Section 111 wil not be applicable. Similarly when the appellants have followed the practice in manner of making the declarations in Import Manifest, and existence of such practice is admitted by the Commissioner JNCH, Nhava Sheva, in his Public Notice, case of appellants cannot be covered under clause "f" of Section 111. In our view the order of Commissioner holding goods liable under Section 111 (d) (f) and (m) is bad in law and cannot be sustained. 5.7 Since we have held that imported dry containers are not liable for confiscation under Section 111, penalties under Section 112 (a) and (b) (iii) cannot be sustained and hence they are set aside. 5.8 In result while upholding the demand of duty and interest against Appellant 1, we set aside the order confiscating the goods, fine imposed and penalties imposed. 6.1 Appeals filed by Appellant 1 i.e. Appeal No C/455/2010 and C/626/2010 are partly allowed to the extent of setting aside of the order of confiscation of the goods and imposition of redemption fine and penalties. Demand of duty along with interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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