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2016 (10) TMI 518 - AT - CustomsValuation - rejection of transaction value - demand of duty with penalty - cloves - import from Singapore and Dubai - country of origin of the goods was shown as Madagascar/ Indonesia/Tanzania - is the rejection of value of cloves on the basis of NIDB data is justified? - Held that - In the circular, it is not mentioned about the grade of clove. The appellants has produced International Trade Centre bulletin which shows that there is a popular quality known as CG3 and the origin of same is from Madagascar, the Comoros and Zanzibar, and the same is frequently available in the market. The decision in the case of M/s Umrao Singh Pawan Kumar vs CCEI Delhi-IV 2015 (3) TMI 1142 - CESTAT NEW DELHI relied upon where it is held that the adjudicating authority has mis-guided himself into believing that there was no CG-3 grade cloves. The rejection of transaction value only on the basis of the prices circulated by the Directorate of Valuation/NIDB data, is not correct - demand and penalty withheld - appeal allowed - decided in favor of appellant.
Issues:
Enhancement of declared value leading to customs duty demand and penalty imposition. Analysis: The appellant contested an order where the declared value was increased by the authorities, resulting in customs duty demand and penalty imposition. The case involved the import of cloves from different suppliers, with the country of origin mentioned as Madagascar/Indonesia/Tanzania. The appellant declared a lower price than the market rate, leading to provisional assessment at the declared value. However, the final assessment was done at a higher rate of US $3000 PMT based on NIDB data. The appellant argued that the declared value was justified as per the import contract, and the grade of cloves purchased was specified. They cited the availability of CG3 grade cloves from specific origins, as per the International Trade Centre bulletin. The appellant also referenced a previous tribunal decision supporting the acceptance of transaction value in similar cases. The opposing argument supported the higher assessed value based on spices board prices and NIDB data indicating the market rate of US $3000 PMT for cloves. The authorities rejected the transaction value due to the discrepancy in grade information and market prices. However, the tribunal noted that the rejection solely based on NIDB data without considering the specific grade and origin of the cloves was incorrect. Referring to a previous case, the tribunal highlighted the importance of considering the specific grade and origin of goods while assessing transaction value. The tribunal emphasized that the rejection of transaction value should not be solely based on general market prices without considering specific product details. The tribunal further referenced a judgment emphasizing the relevance of country of origin in determining the value of goods. They differentiated the present case from a previous case where the exact country of origin was unknown, highlighting the material differences. Ultimately, the tribunal concluded that the rejection of transaction value based solely on price data without considering specific grade and origin details was incorrect. Relying on the precedent set in a previous case, the tribunal set aside the impugned order, allowing the appeal with consequential relief if applicable.
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