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TMI Blog2022 (2) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... of the imported goods. It is, therefore, clear that while there was scope for addition of notional charges in the assessable value under the un-amended section 14 of the Customs Act, but after the actual sale price concept was introduced in the year 2007 on the basis of GATT guidelines and section 14 of the Customs Act was amended in 2007, any inclusion of notional charges seems to have lost its relevance and only actual cost incurred by the buyer is required to be considered. It would be clear from a perusal of the Sales Order Number 1101041643 dated 10.04.2009 that the product was mentioned as HR Coil with country of origin as Ukraine and shipment was to be by 31 May, 2009. The payment terms were payable against confirmed L/C at 180 days after B/L date‟. The USD price PMT was mentioned as 392.70. The Assistant Commissioner had examined the contemporaneous imports of Alloy Steel during the relevant period. A perusal of the data contained in the order indicates that most of the imports were for substantially lesser quantity of HR Steel Plates and in one case where it was for prime HR Steel Coils Alloy and the quantity was 4964.9 MTs the unit price was USD 385.00. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s National Steel and Agro Pvt. Ltd. [ the Appellant ] was dismissed, has been assailed in this appeal. The said appeal was filed before the Commissioner (Appeals) to challenge the order dated 24.03.2010 passed by the Assistant Commissioner of Customs [ the Assistant Commissioner ] by which the three Bills of Entries were finalized by classifying the goods as alloy of steel under Customs Tariff Item [CTI] 7225 30 90 with a further direction, after rejecting the value declared by the Appellant, that the assessment should be carried out at unit price of USD 460 PMT under rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007 [the Valuation Rules]. The Assistant Commissioner also confirmed the duty difference with interest under section 18(3) of the Customs Act, 1962 [the Customs Act]. 2. The Appellant claims to be importing Hot Rolled [HR] Steel Coil from foreign suppliers. Till November 2008, it imported HR Non-Alloy Steel Coil falling under Customs Tariff Heading [CTH] 7208, but pursuant to the issuance of a Notification dated 27.11.2008 wherein Steel falling under CTH 7208 was made a restricted item for the purpose of import, the Appellant starte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings of the Assistant Commissioner are as follows:- a. The value of the goods cannot be determined under Rules 4 of the Valuation Rules-2007 as the import of identical goods in same Quantity is not noticed. However the value of similar goods is available and, therefore, I proceed to re-determine the value of impugned goods in terms of Rule 5 of the Valuation Rules-2007. From the data of Contemporaneous import of similar goods it is ascertained that minimum value of same grade of steel was assessed at a minimum price of USD 460 PMT CIF. b. As the value of similar goods as shown above in chart to Para 8.3 are available for the similar goods hence reliance has been made under Rule 5 of Valuation Rules i.e. the value of similar goods. The minimum price at which the similar good have been assessed finally is USD 460 PMT (Ignoring the similar goods which were provisionally assessed), particularly B/E No. 904752 Dt. 27/09/2009 which was assessed provisionally at US $ 385/MT CIF which is subject matter of dispute of another order, the impugned goods are required to be assessed at a unit price of USD 460 per MT CIF taking Lowest Value of similar goods. Finally assessed as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... US$460 PMT. The adjudicating authority has assessed the goods in tune with the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and the same, therefore, held to be proper, legal and correct. 7. The judgments relied upon by the appellant in support of their contention that the comparison of invoices received by the appellant with the invoice of imports of same goods by another importer is not conclusive for determination of the question of valuation. Further, they differ by facts. Thus, the ratio of the following case laws, Basant Industries VS Addl. Commissioner of Customs 1996 (81) ELT 195(SC); Boichem Synergy Ltd. VS CC, Mumbai 2003 (162) ELT 379 (TRI-MUM) and Kainya Associates Pvt. Ltd. Vs CC (import), Mumbai 2006(204)ELT 72 (TRI-Mum) are not applicable in this case. 8. Shri T. Viswanathan, learned Counsel appearing for the Appellant made the following submissions:- i. In the absence of any evidence to the contrary, the transaction value, as contemplated under the provisions of rule 3 of the Valuation Rules, has to be accepted. In support of this contention reliance has been placed on the judgment of the Supreme Court in CCE ST, Noida v/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exportation, as the case may be, in the course of international trade, where - (a) where the seller and buyer have no interest in the business of each other; or (b) one of them has no interest in the business of the other, and the price is the sole consideration for the sale or offer for sale Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. (2) Notwithstanding anything contained in sub-section (1) or subsection (1A), 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. **** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time and place of importation. Therefore, it is the price which is actually paid or payable for delivery at the time and place of importation, which is to be treated as transaction value. However, this sub-section (1) further makes it clear that the price actually paid or payable for the goods will not be treated as transaction value where the buyer and the seller are related with each other . In such cases, there can be a presumption that the actual price which is paid or payable for such goods is not the true reflection of the value of the goods. This Section also provides that normal price would be the sole consideration for the sale. However, this may be subject to such other conditions which can be specified in the form of Rules made in this behalf. 23. As per the first proviso of the amended Section 14(1), in the transaction value of the imported goods, certain charges are to be added which are in the form of amount paid or payable for costs and services including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; 16. Rule 2(g) deals with transaction value‟ which is defined as follows:- (g) transaction value means the value referred to in sub- section (1) of section 14 of the Customs Act, 1962; 17. Rule 3 of the Valuations Rules, which deals with determination of the method of valuation is reproduced below:- 3. Determination of the method of valuation.- (1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962. (2) The provisions of clauses (b) and (c) of sub-rule (1), sub-rule (2) and sub-rule (3), of rule 4 shall, mutatis mutandis, also apply in respect of similar goods. 19. The relevant portion of rule 10 which deals with cost and services is reproduced below. 10. Cost and services. - (1) In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods, - (a) xxxxxxxxx (b) xxxxxxxxx (c) xxxxxxxxx (d) xxxxxxxxx (e) xxxxxxxxx (2) xxxxxxxxxxxx (3) Additions to the price actually paid or payable shall be made under this rule on the basis of objective and quantifiable data. (4) No addition shall be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule. 20. Rule 11 deals with declaration by the importer and rule 12 deals with rejection of declared value. Rules 11 and 12 are reproduced below:- 11. Declaration by the importer. - (1) The importer or his agent shall furnish - (a) a declaration disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of imported goods shall be the transaction value adjusted in accordance with the provisions of rule 10. Sub-rule (2) of rule 3 provides that the value of the imported goods under sub-rule (1) shall be accepted provided certain conditions are satisfied. However sub-rule (4) of rule 3 provides that if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rules 4 to 9. Rule 10 deals with cost and services and provides that in determining the transaction value, there shall be an addition to the price actually paid or payable for the imported goods and what has to be added has also been provided. Sub-rule (3) provides that additions to the price actually paid or payable shall be made on the basis of objective and quantifiable data. Sub rule (4) provides that no addition shall be made to the price actually paid or payable in determining the value of imported goods, except as provided for in Rule 10. 23. The value of Alloy Steel HR Coil as declared by the Appellant is in terms of the Sales Order entered into and mutually agreed upon by the Appellant and the supplier. It is not the case of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value. xxxxxxxxxx 13) It is, therefore, rightly contended by Mr. Dushyant A. Dave, learned senior counsel appearing for the respondent that the reason given for setting aside the order that the normal rule was that the assessable value has to be arrived at on the basis of the price which was actually paid, and that was mentioned in the Bills of Entry. The Tribunal has clearly mentioned that this declared price could be rejected only with cogent reasons by undertaking the exercise as to on what basis the Assessing Authority could hold that the paid price was not the sole consideration of the transaction value . Since there is no such exercise done by the Assessing Authority to reject the price declared in the Bills of Entry, Order-in-Original was, therefore, clearly erroneous. (emphasis supplied) 25. The contention of the learned Counsel for the Appellant is that is that HR Steel Plates cannot be compared with HR Steel Coils Alloy and also the price is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue is required to be accepted unless there are valid reasons for rejection of such value as provided in Customs Valuation Rules. In the present case no valid reasons have been recorded by the Adjudicating Authority for rejecting the declared price/transaction value of HR Coils except the contemporaneous import price of HR Steel Plates, which is not valid. Therefore, we find no fault with the impugned order and the Appeal filed by Revenue is accordingly dismissed. (emphasis supplied) 27. Thus, what was actually required to be ascertained was the value of similar goods which were commercially interchangeable with the goods being valued. The Appellant had declared USD at ₹ 392.70 PMT and as seen from contemporaneous data relied upon by the Department for a sale of 4964.9 MTs on 27.09.2009 of Prime HR Steel Alloy, the unit price was USD 385.00. Such being the position, the value declared by the Appellant in the three Bills of Entries could not have been rejected under rule 12 of the Valuation Rules. 28. It is only when the value of the imported goods is not taken to be the transaction value that the value has to be determined sequentially in the manner provided for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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