TMI Blog1991 (5) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers works with Cu contents of up to 30%, a deduction of 2.5 units is made, while for material containing 30% to 50% Cu, a deduction of 2 units is made. Cu contents is paid for at lowest LME, Cu, quotation on the day less pound 60. A treatment charge is then deducted pound 135 -145 per tonne for material up to 30%. Pound 190 - 200 tonne for material 30% -50% and pound 240 - 250 tonne for material over 50%. 3. Show cause notice was issued to the appellants indicating the higher price, worked out based on the above, at which the authorities wanted to assess the goods and the importers were charged with misdeclaration of the value of the goods. Enhanced duty based on this value was also sought to be charged. The appellants resisted the demand and urged that the value as declared by them should be accepted for the purpose of valuation under Section 14(1) of the Customs Act, 1962 it being the transaction value. They also cited some of the contemporaneous imports of similar goods made at Madras and Bombay where invoice value had been accepted and which value was about the same as declared by them and pleaded that the value should in the alternative be determined as per the valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is US $ 600 per M.T. and therefore recourse had to be had to the Rules of Valuation and that in view of the nature of the goods since the copper content varied from lot to lot, Rules 5 to 8 could not be pressed into service and the matter had therefore to be decided based on Rule 11 of the Valuation Rules. (c) If value based on their plea taking the price of copper and the date of their contract for the supply of the same, and not on the date of shipment was acceptable as pleaded by the appellants then on that basis, based on the formula as worked out in the earlier paras, he fixed the value at a level lower than what was originally set out in the show cause notice but higher than what was declared in the invoice. 5. No penalties were levied on the appellants for the reason that the Department failed to show that there was any misdeclaration or there was any illegal transaction in foreign exchange. It was for this that the appellants are in appeal against the above findings of the learned Additional Collector. 6. The learned Consultant for the appellants pleaded that the appellants have made imports in the course of international trade and there were no extra-commercial relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rint-outs and had not furnished full details in regard to the same to the appellants either in the show cause notice or at the time of personal hearing and had taken note of the price behind their back while at the same time the lower authority has chosen to ignore the earlier imports at Bombay and Madras as cited by them. He has pleaded that in that view of the matter, the lower authority s order suffers from serious lacunae as the learned lower authority could not have relied upon any piece of evidence not made known to the appellants and could not have ignored the instances of imports made at about the same prices. He has pleaded that as it is the rationale for arriving art the price of the goods based on the formula - LME was flawed inasmuch as while percentage of the copper as ascertained chemically has been adopted as the basis for arriving at the reduced price, while that percentage of copper was not available for recovery. He has pleaded that the recovery made from the Brass Ash Dross was not to the extent of 100% as ascertained chemically, and in some cases, the percentage was as low as 50 to 55%. He has further pleaded that the quality of copper recovered was not of prime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso not given any finding with regard to the evidence produced by the appellants to the effect that values comparable to those declared by them had been accepted in Bombay Customs House for the same goods. In the circumstances, therefore, merely based on the prices published in Metal Bulletin, which itself declares in the preamble the following table represents our evaluation of current market values in the UK......Owing to the nature of scrap market it is impossible to quote precise prices and it is important that the indication should be read in conjunction with the relevant market comment" and without any supporting evidence of contemporaneous import, the value so determined will not be in accordance with the provisions of Section 14(1) of the Customs Act, 1962. In this view of the matter, therefore, the Additional Collector s order is not maintainable. It is set aside and the appeal allowed". He has pleaded that unless the transaction value under Rule 4(1) of Valuation Rules under Section 14 of Customs Act, 1962 is shown as unacceptable, the authorities cannot proceed to invoke the other Rules for the purpose of arriving at the assessable value. He has pleaded that in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration is whether the value as declared by the appellants can be accepted or not for the purpose of Section 14 of the Customs Act, 1962. The appellants plea is that the invoice price is transaction value and there is no need for arriving at the value under Rule 11 of the Valuation Rules. It is, therefore, desirable to examine whether the invoice value has all the attributes of transaction value. Transaction value under Section 14 of the Customs Act, 1962 has been provided for under the Rules framed in this behalf under Section 14(1) (a). Section 14 of the Customs Act, 1962 is reproduced below for convenience of reference : 14. Valuation of goods for purposes of assessment (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force where under a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the .buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules, and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. 3. (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price". (b) (c) xxxxx." 10. It is seen transaction value of the imported goods may be accepted if it is the price actually paid or is payable for the goods subject to adjustment in accordance with the provisions of Rule 9 of the Valuation Rules and provided that it satisfies the conditions as are set out under sub-rule (2) of Rule 4 of the Valuation Rules, 1988: In the present case we find that the appellants have merely sought for acceptance of the invoice value and pleaded that the same should be treated as reflecting the transaction value. We observe that for any claim for acceptance of transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower authority has taken note of the imports at higher prices made at Bombay and the same do not appear to have been made known to the appellants. The order of the learned lower authority does not show that the goods imported at Bombay were from same source or from same country i.e. U.S.A. and whether the goods were identical, similar or comparable and also whether the imports were near about the relevant time. The learned lower authority has relied upon the LME Bulletin and has proceeded to fix the value based on the formulae set out therein. We observe that, as pointed out by the learned Consultant for the appellants, as it is this Bulletin does not show the prices of Brass Ash/Dross. It is not clearly shown that the prices therein are for international market. The heading appears to show that the prices represent the current market value in U.K. and the higher prices in the price range typifies higher consumers buying levels. There is also mention that there is some regional variations also. Prices of lead scrap are the consumers buying prices delivered to their works in London and the Midlands. It has been further stated therein that owing to the nature of the scrap market i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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