TMI Blog2007 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Edible Oils Ltd., Bangladesh. The goods imported were accompanied with Invoice dated 4-10-2003 and Invoice dated 30-10-2003. The C F value of the Soyabean Oil (final product) showed the price to be Rs. 24.50 per kg. calculated at the prevailing rate of US $. The Department called upon the appellant to give the cost break-up of the imported goods. The details were forwarded by the appellant to the Department vide letter dated 19-10-2003 along with copy of the bills of entry. The appellant also obtained a certificate from the Superintendent of Customs which stated that the consignments imported stood assessed by the Assistant Commissioner of Customs at Rs. 27.17 and Rs. 31.96 respectively. The Department, however, refused to accept the rate of Rs. 27.17 and Rs. 31.96 respectively. On 5-12-2003 the Assistant Commissioner of Customs gave a hearing to the appellant in the matter of finalization of the assessable value of the said two consignments. The appellant contended that M/s. United Edible Oils Ltd., Bangladesh was the manufacturer of Refined Soyabean Oil. The said goods were manufactured from imported Crude Soyabean Oil (raw material). The said raw material was imported by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs, the appellant preferred an appeal under Section 128A(3) of Customs Act, 1962. This appeal was filed before the Commissioner (A). By Order dated 30-6-2004 the Commissioner came to the conclusion that there was no reason for the Assistant Commissioner of Customs to invoke Rule 7A, particularly when the Department had not alleged that the sale was not in the ordinary course of trade. It was further held that there was no reason to invoke Rule 7A since the import did not attract any of the circumstances enumerated in Rule 4(2)(c) to (h). According to the Commissioner (A), the only ground on which the Assistant Commissioner had invoked Rule 7A was that the appellant was given abnormal discounts. According to the Commissioner (A), in the present case there was nothing to show that the discounts obtained were abnormal. In the circumstances, the Commissioner held that the Department was not correct in rejecting the transaction value in terms of Rule 4(1). 5.Aggrieved by the decision of the Commissioner (A), the matter was carried in appeal to the Tribunal (CESTAT). The matter was carried in appeal by the Department. By a cryptic order, the Tribunal stated that on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nacceptable for the reasons set out in Rule 4(2). It was further held that the word "payable" in Rule 4(1), must be read as referring to the "particular transaction" and payability in respect of the transaction contemplates as situation where payment of price stands deferred. Therefore Rule 4 is limited to the transaction in question. It was further held that Rule 5 allows the transaction value to be determined on the basis of identical goods imported into India about the same time; Rule 6 allows fixation of transaction value on the basis of the value of similar goods imported into India about the same time. Where there are no contemporaneous imports into India, the value is to be decided under Rule 7 by a process of deduction in the manner provided therein. If this is not possible, then the value shall be computed under Rule 7A. It was further held that it is only when the transaction value under Rule 4 is rejected, only then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8. Conversely, if the transaction value can be decided under Rule 4(1) and does not fall under any of the circumstances given in Rule 4(2), there is no question of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refined oil (final product). In such cases, if the cost of the raw material exceeds the price of the final product then in that event the Department can invoke Rule 7A. However, in the present case, even assuming for the sake of argument that Rule 7A applies, the Assistant Commissioner of Customs while applying Rule 7A has followed a peculiar method. She has examined the cost break-up. She rejects the cost of the raw material but, at the same time, she accepts the processing charges (figures supplied by the appellant). Rule 7A refers to Computed Value in contradistinction to Rule 7 which refers to Deductive Value. Computed value under Rule 7A is the value of the imported goods consisting of the cost or value of materials plus amount for profit and cost or value of all other expenses under Rule 9(2). Further, Rule 7A is subject to the provisions of Rule 3. Rule 3 applies in cases where the buyer and seller are related. In the present case, there is no finding given that the buyer and seller are related. In the interpretative note to Rule 7A, value of imported goods is to be determined by examining the costs of production of the goods and the said interpretative note clarifies tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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