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TMI Blog2024 (8) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... not the case of the department that the Appellant had supplied goods in DTA in excess of the permitted value. The DTA sale was made to several independent buyers on principal to principal basis. There is not a whisper of allegation that the sale price for such DTA sale was depressed or suppressed or manipulated in any manner whatsoever. In the instant case the department could not show any evidence that the transaction value declared by the appellant was not price actually paid by the buyer. There is also no documentary evidence produced by the revenue that the value adopted for DTA sale is a manipulated one. The sale has been made to the independent buyers and the price is the sole consideration of sale. In case of EICHER TRACTORS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2000 (11) TMI 139 - SUPREME COURT ] the Hon ble Apex Court held that unless the special circumstances exists, the Transactional value cannot be rejected. In these circumstances, the transaction value declared by the appellant cannot be dis-regarded. In terms of the provisions of proviso to Section 3(1) of Central Excise Act, 1944, while the duty payable in respect of the goods cleared by a 100% EOU into DTA i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deemed Export and not against the physical/actual exports hence, the said DTA clearances were not in accordance with the EXIM POLICY. Therefore, all sales towards DTA effected during the disputed period would not be eligible for payment of concessional rate of duty 50% of each of Customs Duty in terms of Notification No. 2/95 CE dated 04.01.95 or under any other relevant Notification and the duty liability on the above DTA sale will be of the 100% Customs Duties leviable on procurement of duty free materials in terms of section 65(2)(b) of the Customs Act, 1962. Further it was contended that Appellant has also violated the condition No.12 of the LOP and condition No. 2 of the licence issued by Assistant Commissioner of Central Excise, Surat read with Section 65 of the Customs Act,1962. 2. It also further appeared that the average price indicated by the Appellant that the invoices related to the clearances effected in to DTA is neither the assessable value nor the transaction value. The correct valuation of the goods, have not been taken into account by the Appellant. Further, it was also contended that Notification No. 53/97-Cus. dated 03.06.97 as amended from time to time clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them under erstwhile Rule 173-Q of the Central Excise Rules, 1944. (iv) I order to recover interest at the applicable rate, on the amount confirmed at Sr. No. (i) above, under the provisions of erstwhile Section -11AB of the Central Excise Act, 1944 from them. (v) I order to drop the demand of Customs duty amounting to Rs. 1,05,06,607/- on duty free raw materials which were imported/procured indigenously and were subsequently consumed in the manufacture of finished goods cleared in DTA from them. (vi) I order to drop demand of interest under Section 72 of Customs Act, 1962 read with Section 28AB of Customs Act, 1962 from them. B. In respect of SCN dated 03.04.2000 and addendum dated 04.04.2000 (i) Similarly, since I have already held that deemed export effected by the noticee is at par with the physical export in terms of Para 9.9(b) of the said Exim Policy 1997-2002, as discussed in foregoing paras; the benefit of Notification No. 2/95-CE dated 04.01.1995 is extendable to the noticee. I confirm the demand of the differential Central Excise duty amounting to Rs. 6,27,839/- equal to 50% of aggregate of all the Customs duties leviable on clearance their finished goods i.e Texturing Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 (118) ELT 774 (Tribunal) (vii) Lanvin Synthetics Pvt. Ltd. Vs. Union of India -2018 (322) ELT 168 (Bom) (viii) J.M. Baxi Co. Vs. Government of India -2016 (336) ELT 285 (Mad.) 5. He also submits that the differential duty demand of Rs. 46,03,738/- and of Rs. 6,27,839/- has been wrongly foisted vide impugned order. The impugned show cause notices wrongly proposed the demand duty in excess of the transaction value at which the goods were cleared in the DTA. The DTA sales were made by the Appellants to several independent buyers on principal to principal basis and based on competitive market condition. There was no allegation of any financial flow back or receipt of any extra consideration from the buyers. The impugned notices also did not allege that the sale price of the DTA sales was depressed or suppressed or manipulated. In such circumstances there was no basis for jettisoning the transaction value and adopting a hypothetical and arbitrary value for raising a differential duty liability. 6. He further submits that the impugned notices sought to enhance the transaction value by comparison of actual price at which the goods were sold by the Appellants with the arbitrarily calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices reflected in the show cause notices. Rule 8(2) of the Customs Valuation Rules specifically states that no value shall be determined under the provision of the rule on the basis of arbitrary or fictitious values. Thus the impugned order is patently erroneous and unsustainable. Furthermore; the provisions of Rule 7A have also been wrongly invoked in the present case in view of the fact that there was no allegation in the impugned notices that the transaction between the buyer and the appellant was not genuine. In the present case the sale transactions were at arm's length and to independent buyers. Further the Interpretative Note to Rule 7A specifically states, inter-alia, that the use of the computed value method will generally be limited to those cases where the buyer and seller are related. In the present case there is no allegation that the Appellants and their buyers are related. Thus the Rule 7A of the Customs Valuation (Determination of Price of Imported Goods) Rules 1988 has been erroneously invoked against the Appellant. 9. He also argued that even if an appellant has sold the goods at a price lower than the cost of production the assessable value cannot be challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that in the present case the subject notice did not allege removal of any excisable goods in contravention of any of the provisions of the Central Excise Rules or contravention of any of the provisions of the said rules with intent to evade payment of duty. Thus there was no basis of invocation of provisions of Rule 173Q against the Appellant. Even otherwise, penalty under Rule 173Q cannot be imposed as the Appellant were governed by the provisions of Rules contained in Chapter V-A since they were a 100% Export Oriented Unit. He also placed reliance on following judgments. (i) Deputy Commr. Of Cus. Vs. Baccarose Perfume Beauty Products Ltd. -2010(267)ELT 177(Guj.) (ii) Commissioner of Central Excise , Chandigarh I Vs. Deepak Polyspin -2004(167)ELT 360(Tri.-Del.) (iii) Alsa Marine Harvests Ltd. Vs. Comm. Of Cus. Visakhapatnam -2003(168)ELT 741 (Tri. Bang.) (iv) La Mansion Granites Ltd. Vs. Commissioner of C.Ex., Hyderabad -2003(187)ELT 115(Tri.-Bang.) (v) Bee International Vs. Commissioner of Central Excise, Thane II- 2007(220)ELT 128 (Tri. Mumbai) (vi) Hanil Era Textiles Ltd. Vs. Commissioner of C.Ex. Raigad -2005(192)ELT 1109 (Tri. Mumbai) (vii) T.V. Raja Reddy Vs. Commr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back from the buyers to the appellant or that there was any extra consideration received by the Appellant from buyers. In the instant case the department could not show any evidence that the transaction value declared by the appellant was not price actually paid by the buyer. There is also no documentary evidence produced by the revenue that the value adopted for DTA sale is a manipulated one. The sale has been made to the independent buyers and the price is the sole consideration of sale. In case of M/s Eicher Tractors Ltd. v. Commissioner - 2000 (122) E.L.T. 321 (S.C.) the Hon ble Apex Court held that unless the special circumstances exists, the Transactional value cannot be rejected. In these circumstances, the transaction value declared by the appellant cannot be dis-regarded. 16. We also find that in terms of the provisions of proviso to Section 3(1) of Central Excise Act, 1944, while the duty payable in respect of the goods cleared by a 100% EOU into DTA is the aggregate value of duties of customs on import of like goods into India, the assessable value for this purpose is to be determined under Section 14 of the Customs Act, 1962. Therefore, the assessable value of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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