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TMI Blog2019 (12) TMI 1627X X X X Extracts X X X X X X X X Extracts X X X X ..... on of declared value, but however, while adjudication, Ld. Commissioner has found that there was no suppression of the transactional value in the first place and has proceeded to accept the declared value. Thus, the under-valuation of the imported goods in the case on hand has not at all been established with the support data/evidences, in the first place. Appeal of Revenue dismissed. - C/42336/2016-DB - FINAL ORDER No. 41756/2020 - Dated:- 9-12-2019 - MR C.J. MATHEW, TECHNICAL MEMBER AND MR P.DINESHA,JUDICIAL MEMBER Ms. K. Komathi, JC, Learned Departmental Representative - for the appellant. None - for the Respondent ORDER The Assessee respondent had imported during the relevant year, Urea from M/s. Oman India Fertilizer company, (OMIFCO in short), at about US$ 160 per Metric Tonne (MT). The facts borne out of records before us reveal that the said company is a joint venture between the Oman Oil Company (50%), M/s. IFFCO (25%) and M/s. KRIBHCO (25%). Further, the import of urea from the said company was on the basis of a long term urea off-take agreement (UOTA) between the Government of India (in short GOI) and OMIFCO. Urea was purchased by the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the above objective; that as a consequence to this MOU, a joint venture agreement (herein after referred to as JVA for brevity) amongst Oman Oil Company, assessee-respondent and RCF was signed in 1997 wherein it was decided that the share capital of the three companies shall be issued, subscribed and paid up in the ratio of 50%, 25% and 25% respectively, that the JVA, the composition of Board of Directors was also decided; that it was agreed initially that the Board will consist of 6 Directors, out of which 3 would be the nominees of the assessee-respondent/RCF and other 3 would be the nominees of Oman Oil company; that the GOI was not a party to this JVA nor did the GOI had any right to appoint any Director on the Board of OMIFCO; iii) that later due to low urea market price and problems relating to project financing, RCF withdrew from the project; that then in its place IFFCO was inducted and an amended and restated JVA was signed in October 2000; that as per paragraph 2.2. of the JVA, OMIFCO had to be considered as an independent company; that three Directors of the Company were to be nominated by the assessee-respondent and IFFCO and three Directors were to be nominated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the plant for 15 years and is referred to as long term price (LTP) vii) that under the determination of market price was to be based on the average of high and low of the Middle East prices of granular urea in bulk as published in specified fertilizer market bulletins of UK. viii) the GOI decided to appoint the assessee-respondent and IFFCO as its Fertilizer Marketing Entity (FME) for distribution of urea in India and entered into an agreement with them called handling and marketing agreement. ix) that the SCN issued by DRI and the allegations contained therein had been made mainly because the subject SCN was entirely based on the investigations carried out by DRI Zonal Unit Ahmedabad. As in the case of DRI SCN, the Commissioner of Customs, Tuticorin, had also rejected the transaction value of urea imported by the assessee-respondent under Rule 12 of the Valuation Rules 2007 and determined the value under Rule 4 of the Valuation rules 2007 by taking the transaction value of identical goods imported at and around the same time by IFFCO. x) that the only requirement of Transaction value‟ was that it should be the price actually paid or payable; that in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t about the truth and accuracy of the declared value, he may reject the declared value as not representing the transaction value and proceed to determine the value sequentially in accordance with Rule 4 to 9 of Valuation Rules 2007; xvi) and that they also relied on the following decisions in support of their contentions:- 1. Commissioner of Customs, Vizag Vs. Aggarwal Industries reported in 2011 (272) ELT 641 (SC), 2. Commissioner of Customs Vs. Micro Inks reported in 2009 (244) ELT 143 (Tri.-Ahm), 3. Pushpanjali Silks Vs. Chief Commissioner of Customs Chennai reported in 2007 (211) ELT 206 (Madras). 4. The Commissioner/Adjudicating authority vide impugned adjudication order has however, dropped further proceedings initiated in the impugned SCN for the detailed reasons given in the impugned adjudication order. Assailing the correctness of the impugned adjudication order, Revenue has preferred this appeal before this forum and the grounds urged reveal the grievances of the revenue, which are:- a. The import of rated capacity production of urea was at the pre-determined price of about US $160 per MT. Whereas, the urea produced in excess of the rated capacity was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FOB Oman basis under a long term take-or-pay contract, on terms and conditions to be agreed upon, 100% of urea production of the fertilizer plant at a price equal to the defined calculated floor price or the market price of urea at FOB Oman, whichever is greater. The calculated floor price (CFP) of urea was defined to mean a price necessary to yield a 10% internal rate of return (IRR) on the equity investment in the fertilizer project. Assessee-respondent and RCF would be entitled to a urea sales fee at the rate of US$ 3.50 per MT in consideration of the sales and take or-pay expenses incurred by them. Thus in pursuance of the said MOU dated 30.07.1994 and the joint venture agreement dated 02.04.1997 was signed between assessee-respondent, RCF and Oman Oil Company Limited a new JV company in the name and title of Oman India Fertilizer company LLC (OMIFCO) was formed with equity participation as envisaged in the MOU, i.e. assessee-respondent 25%, RCF 25% and Oman Oil Company Limited 50%. In addition, in the Board of Directors of the new company there is equal number of Directors nominated by either side. ii) The GOI and Sultanate of Oman have protected their interests conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t GOI had agreed to purchase 100% of rated production on the basis of a fixed Long Term Pricing (LTP) for 15 years. These facts would evidence that there was a long term agreement as regards production and sale of urea by OMIFCO and purchase of the same by GOI. 7.2 Further, Learned Commissioner has also analysed various documents relating to the import of urea and as per his critical analysis the following facts emerged; a) As per the Bill of Lading, Ministry of Chemicals Fertilizers, GOI is the consignee of goods and assessee-respondent is the notified addressee. b) In the IGM filed by the shipping liner under Section 30 of the Customs Act, 1962, Ministry of Chemicals Fertilizers, GOI is shown as the consignee of goods. c) In the certificate of quality given by OMIFCO the Ministry of Chemicals Fertilizers, GOI is the consignee. d) In the certificate of origin furnished by the Oman Chamber of Commerce and Industry, Department of Fertilizers, Ministry of Chemicals Fertilizers, GOI is the importer. e) In the stowage plan and segregation report prepared by the foreign shipper, the Department of Fertilizers, GOI has been shown as the buyer of goods. f) In t ..... 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