2023 (10) TMI 509 - AT - Customs

Valuation of imported goods - Urea - rejection of the declared import values - primary observation in the Show Cause Notices appears to be that by virtue of the Government of India being a shareholder to the extent of 50% in the joint venture the same had influenced the import value of urea - HELD THAT - In its latest order in INDIAN FARMERS FERTILIZERS CO OPERATIVE LIMITED VERSUS C.C. -KANDLA 2023 (8) TMI 561 - CESTAT AHMEDABAD the Ld. Ahmedabad Bench of the CESTAT in the respondent s own case has held that it is apparent that the appellant importer and the foreign base exporter cannot be the treated as related parties. There are no infirmity in the impugned orders passed by the Commissioner of Customs Tiruchirappalli and the Commissioner of Customs Tuticorin - appeal filed by Revenue dismissed.

Summary

Issues Involved:
1. Whether the declared import values of urea were influenced by the relationship between the parties.
2. Whether the impugned orders dropping further proceedings were in order.

Summary:

Issue 1: Influence of Relationship on Declared Import Values

The primary observation in the Show Cause Notices was that the Government of India, being a shareholder to the extent of 50% in the joint venture, influenced the import value of urea. The Department proposed to reject the declared values and re-determine them, demanding differential Customs Duty, interest u/s 28AA of the Customs Act, 1962, and penalties u/s 112(a) / 114A. The respondent rebutted these allegations, arguing that the rejection of declared import values and the consequential re-determination were not in accordance with law.

Issue 2: Validity of Impugned Orders Dropping Further Proceedings

The Commissioners of Customs at Tiruchirappalli and Tuticorin, after considering the explanations and documents, dropped the proceedings initiated by the Show Cause Notices. The Department appealed against this decision. The Tribunal noted that the issue had been considered by the Ahmedabad Bench of the CESTAT in similar cases, where it was held that IFFCO and OMIFCO are not related parties and that the declared value was in order. The Tribunal reiterated that the relationship did not influence the import value, referencing multiple precedents, including the Tribunal's own earlier orders and the Supreme Court's rulings.

Conclusion:

The Tribunal found no infirmity in the impugned orders passed by the Commissioners of Customs at Tiruchirappalli and Tuticorin. The appeals filed by the Department were dismissed, and the cross-objections filed by the respondent, being in support, were disposed of accordingly.

(Order pronounced in the open court on 11.10.2023)