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2019 (11) TMI 194 - AT - CustomsValuation of imported goods - pharmaceutical gelatin (capsule grade) - addition of 20% of the FOB value as adjusted freight component in terms of Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - redemption fine - penalty - HELD THAT:- Out of the quantity of 10 MT of subject goods, the overseas supplier had supplied 9 MT by sea on 17.08.2012 and since was not complied with the requirement of the purchaser order was not complied with, it had sent the remaining 1 MT by air and the freight was also paid by the supplier. In context with the valuation of imported goods, the proviso clause appended to Section 14 ibid mandates that the transaction value in the case of imported goods shall include inter alia, cost of transportation to the place of importation. The said statutory provision nowhere provides that only the freight paid by the importer should be included in the transaction value. Thus, in absence of any specific mention about the person required to pay the freight component, such amount paid by the overseas supplier should also be considered as part of transaction value for the purpose of determination of duty liability. The rejection of the declared value and re-determination of the same in terms of Rule 10(2) ibid by the original authority is in conformity with the statutory provisions - However, considering the fact that the appellant had entertained the reasonable belief regarding non-inclusion of the element of freight in the transaction value, we are of the view that the redemption fine imposed on it can be reduced in the interest of justice - the impugned order is modified to the extent of reducing the redemption fine of ₹ 1,35,000/- to ₹ 50,000/-. Imposition of penalty on appellant - HELD THAT:- Both the appellant as well as the overseas supplier have communicated to the Department regarding delayed supply of the part quantity through air and that the freight amount was also paid by the overseas supplier. Thus, under such circumstances, the provisions of Section 112(a)(iii) cannot be invoked for imposition of penalty on the appellant - Penalty set aside. Appeal allowed in part.
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