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TMI Blog2023 (5) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... material of Unilever Manneheim, Bill of material pertaining to PT - thus it is very clear that SLI 80 is not usable for manufacture of CSI. Further from the Flow Chart submitted by M/s Galaxy it also appeared that M/s Galaxy were manufacturing SLI 80 as a final product and not intermediary product for manufacture of some other product in continuous process. SLI 80 is altogether different product having different use. Hence being not at all comparable/similar or identical goods there is no ground to make the export value of SLI- 80 as basis to reject the declared value of CSI. The appellant since very long was declaring the goods on the basis of transfer pricing and such method is accepted valuation method under all financial and taxation laws in case where the goods are bought from related person, only in a particular case where there is any doubt that such transfer pricing can be rejected. The procedure adopted for arriving at assessable value is nowhere to be found in Customs Valuation Rules. The Appellant has been consistently since last 15 years declaring the value of imported material bases upon cost of raw material, manufacturing cost and margin of profit/ mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sethionate /Chips of Sodium Isethionate HEBE. The said goods were imported from M/s Unilever Deutschland GmbH, Germany/M/s Unilever Supply Chain Company AG, Switzerland. It appeared that the appellant was related to the said overseas suppliers in terms of Rule 2(2) of the Customs Valuation (Determination of Price of Import Goods) Rules 1988 and the relationship influenced the value of imported goods. Therefore the matter was referred to Special valuation Branch, Mumbai and the Bills of Entry were assessed provisionally. The matter of import of chips of Sodium Isethionate/ Chips of Sodium Isethionate HEBE was investigated by DRI, Mumbai. As per the investigation reports of DRI and Special Valuation Branch, Mumbai the value of imported items were found to be mis-declared as the imported items found to be soap noodles‟ and also the unit price was required to be enhanced by 153%. Accordingly show cause notice was issued by Additional Commissioner of Customs, Mundra and it was adjudicated by Order-I-Original dated 16.01.2020 by which the declared value was rejected and re-determined and differential customs duty was confirmed. The subject goods were held liable for confiscation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f USCC) was considered for payment of import duties. Based on the SVB order dated 27.02.2007, Appellant continued to import CSI from Unilever- Mannheim on transfer pricing basis. The transfer pricing was determined on the basis of cost of all raw materials, manufacturing cost and margin of profit. The prices were certified by Unilever -Mannheim on quarterly basis and appropriate duties were also paid based thereupon. The description of the product (CSI) mentioned in the Bills of Entry was based on the documents like export invoices, Bill of Lading, Country of Origin Certificate, transfer pricing certificate, etc., received from Unilever group companies which specifically mentioned the description of the products as Chips of Sodium Isethionate (CSI) and therefore, there was no mis-declaration by the Appellant. 2.1 He also submits that SLI-exported by Galaxy Surfactants to Unilever -Buxtehude was not used by Unilever-Mannheim nor can it be used in the manufacture of CSI/Dove Noodles. This facts is also evidenced from the Bills of materials and transfer pricing certificate, wherein there is no mention of SLI -80 as raw material. Therefore, the cost of SLI-80 exported by Galaxy to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tribunal has noted that one of the constituents of Dove Soap is Sodium Cocoyl Isethionate which is used as OSSA for the function as cleaning and foam is not contained in Dove Soaps, it is not understood as to how SLI-80 was assumed to have been used or present is CSI/Dove Noodles imported by the Appellant from the very same group company, who supplied Dove Soaps, when the quality and specifications of dove soaps remain the same, whether, it is manufactured in Germany or in India. This itself evidence that the term SCI and SLI is used interchangeably for the in-situ material emerging at intermediate stage while manufacturing CSI at Unilever-Mannheim. In the present matter department has not brought in any plausible evidences to disprove the aforesaid contention of the Appellant, except bare statement on imagination that SLI-80 and/or similar SLI was used as an input for manufacture of CSI, which statements is contrary to the evidences like Bills of materials, transfer pricing certificate, etc listing down the ingredients used in the manufacture of CSI. To supper their contention that SLI-8- imported by Unilever -Buxtehude from Galaxy and SCI/SLI emerged in situ during the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the truth or accuracy of the value declared in the Bills of Entry. In the present case, sub-clause (d)(e) (f) of clause (iii) of Explanation to Rule 12 of valuation Rules have been invoked. It is submitted that none of the said sub-clauses would apply to the present case, as the appellant has not mis-declared the goods in parameters, such as description, etc., as it is not the case that what was declared in the import documents was found to be different. 2.8 He further submits that Appellant had classified the disputed product under Tariff item 340220 10/ 3402 2020 under a bona fide belief and understating that the disputed goods fall thereunder. Claiming classification of a product under particular heading/ sub-heading /tariff items cannot be termed as misclassification or mis-declaration and extended period and penal provisions not invokable in the present matter. He placed reliance on the following judgments. Denson Pultretaknik 2003(155) ELT 211 (SC) Lewek Altair Shipping 2019(366) ELT 318 (T) Mittal International 2018 (359) ELT 527 (T) Indabrator Ltd. -2000 (118) ELT 649 (T) 2.9 He also submits that imported goods were cleared after provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has rejected the declared value on the ground that the goods i.e Sodium Chips of Isethionate (CSI) has been imported from related person Unilever - Manneheim and hence the declared price are not acceptable. They have taken the export price of SLI-80 which was exported by M/s Galaxy Surfactants to M/s Unilever Buxtehude which is used by them in manufacture of Dove Liquid Wash as a basis for valuation of Chips of Sodium Isethionate (CSI) and is used for manufacture of Dove bathing Bar/ Soap. We find that first of all SLI 80 is neither used nor is usable in manufacture of Dove Bathing Bar/ Soap. It is all together a different product than Chips of Sodium Isethionate (CSI) which was imported by Appellant. The Appellant has produced the list of ingredients used for manufacture of CSI/ Dove Noodles which are Sodium Isethionate, Zinc oxide, Dove Cocount Fatty Acid, Vegetable Stearic acid, Vegetable Soap base, CAPS Triglyceride Route, Sodium Chloride, Coated Titanium Dioxide, EHDP 60% Solution, Tetra Sodium EDTA Low Formadehyde and in support of same the appellant had produced the specimen copies of Bills of material of Unilever Manneheim, Bill of material pertaining to PT. Unileve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Form of the product Solid needles/Flakes No specific form can be ascribed as it is a reaction intermediate Significant difference in form 6 Major difference in technical and chemical characteristics Both materials differ in carbon chain as well as their finished form as explained in point 1, 2, 3 5 7. Quantity exported by Galaxy to Unilever Buxtehude 400 MTs/annum Nil When the SLI-80 export is only 400 MTs/annum by Galaxy it is absolutely impossible to manufacture One Lac tonnes of CSI that too supplied only to India by Unilever Manheim. Hence, it is conclusively proved that SLI-80 never ever used in the manufacture of CSI 8. Quantity imported from Unilever Mannheim Germany Nil; 100000 MTs *Data source: DRI report dated June 2017 The above chart clearly shows that SLI 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of them was found to be doubtful. No new evidence was unearthed by the revenue which can doubt or dispel the genuineness of above documents. It is to be considered that the Customs Valuation Rules 4 to 9 during the relevant period read as under : RULE 4. Transaction value of identical goods. (1) (a) Subject to the provisions of rule 3, the value of imported goods shall be the transaction value of identical goods sold for export to India and imported at or about the same time as the goods being valued : Provided that such transaction value shall not be the value of the goods provisionally assessed under section 18 of the Customs Act, 1962. (b) In applying this rule, the transaction value of identical goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued shall be used to determine the value of imported goods. (c) Where no sale referred to in clause (b) of sub-rule (1), is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion usually paid or agreed to be paid or the additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind; (ii)he usual costs of transport and insurance and associated costs incurred within India; (iii)the customs duties and other taxes payable in India by reason of importation or sale of the goods. (2)If neither the imported goods nor identical nor similar imported goods are sold at or about the same time of importation of the goods being valued, the value of imported goods shall, subject otherwise to the provisions of sub-rule (1), be based on the unit price at which the imported goods or identical or similar imported goods are sold in India, at the earliest date after importation but before the expiry of ninety days after such importation. (3) (a) If neither the imported goods nor identical nor similar imported goods are sold in India in the condition as imported, then, the value shall be based on the unit price at which the imported goods, after further processing, are sold in the greatest aggregate quantity to persons who are not related to the seller in India, (b) In such determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s itself discards the price of the goods exported to a country other than India hence any arbitrary value adopted by the revenue in this case is absolutely illegal. In such case transaction value mentioned in Bill of Entry cannot be discarded as held by the Hon‟ble Apex Court in case of Century Metal Recycling P. Ltd. 2019 (367) ELT 3 (SC), Sanjivni Non- Ferrous Trading 2019 (365) ELT 3 (SC) and South India Television (P) Ltd. 2007 (214) ELT 3 (SC). We find that the method of valuation to enhance the value of the product in question i.e Chips of Sodium Isethionate (CSI) is wholly erroneous and has no basis and hence is not sustainable. 4.4 We also find that no conduct or intent of the Appellant is found to be malafide as they submitted all the information and also the information required during assessment. Hence the demand raised for the period 26.11.2013 to 04.08.2015 covered under 106 Bill of Entry out of 886 are barred by limitation and considered to be assessed finally. The goods were not found to be different than declared and the value was based on transfer pricing and hence provisions of Section 111 (m) is also not applicable. The remaining BEs were cleared by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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