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M/s Orjet Intermediates Pvt. Ltd., M/s Bodal Chemicals P. Ltd, M/s Hind Prakash International Trading P. Ltd., M/s Loxim Industries Pvt. Ltd., M/s Manish Chemicals, M/s Monarch Dyestuff Industries Ltd, M/s Asiatic Colour Chem Indus. Ltd., Shri Mahesh Agarwal Versus Commissioner of Customs, Ahmedabad

2016 (2) TMI 542 - CESTAT AHMEDABAD

Valuation of import of H. Acid and Bita Napthol on High Seas Sales basis - Subsequent to clearance DRI Officers found that M/s ACCIL had raised debit notes in respect of the said consignments and have collected the debit note amount from four of the importers. It was, therefore contended that the assessable value should be the value declared by the importer + the value of the debit note. - Held that:- It is clearly stated in the circular that the actual High Seas Sales contract price paid b .....

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other appellants and had not furnished the details to Customs authorities, but raised the debit notes and recovered higher amounts from their buyers. - Demand of duty confirmed with penalty invoking extended period of limitation - Decided against the assessee. - Appeal No. C/255,278,291,292,297,298,302,303/2008 - Order No. A/10082-10089/2016 - Dated:- 8-2-2016 - Hon ble Mr. P. K. Das, Member ( Judicial ) And Hon ble Mr. P. M. Saleem, Member ( Technical ) For the Appellant : Shri Anand Mish .....

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Napthol. They sold these consignments to six importers on High Seas Sales basis. The Customs duty was paid on the assessable value which was determined by the importers on the basis of CIF value + 2%. The goods were cleared from Customs charge on payment of Customs duty. Subsequently, DRI Officers found that M/s ACCIL had raised debit notes in respect of the said consignments and have collected the debit note amount from four of the importers. It was, therefore contended that the assessable val .....

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oods were imported during the period July/August, 2006 and therefore, the old Section 14 of the Customs Act would apply. He takes us through the said provisions and submits that the assessable value is a deemed value which is the price at which such or like goods are sold in the course of international trade. The learned Counsel contends that they are regular importers of the goods and Revenue should have taken as assessable value the price of such or like goods during the same period which was .....

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Vs CC (Prev.), Jamnagar, vide Order No.A/10746/2015, dt.11.05.2015, which he submits has been upheld by the Hon'ble Supreme Court vide decision dt.20.11.2015 in Civil Appeal Diary No.33370/2015. With regard to penalty, the learned Counsel submits that there was no mens rea and hence no intention to evade duty and there was a bonafide belief that the assessable value should be CIF + 2% in terms of Board s Circular No.32/2004-Cus, dt.11.05.2004. He relied upon the case law in this regard in t .....

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account of the debit note, they have paid the concerned duty by way of cash during the investigation itself and before issue of Show Cause Notice. He further submits that the advance licence had sufficient unutilised credit as on the date of import of the goods and therefore, they did not stand to gain by evading duty. He also contends that they had taken up the matter with the Adjudicating authority during the time of adjudication. However, the Adjudicating authority observed that they had not .....

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rakash International Trading P. Ltd. In the case of M/s Manish Chemicals, the Consultant submits that in this case also, the goods were cleared under advance licence (DEEC). He also submits that the Adjudicating authority has not given any finding in the impugned order in respect of M/s Manish Chemicals. 6. The learned Advocate Shri Paritosh Gupta appears for M/s Loxim Industries Pvt. Ltd, and M/s Monarch Dyestuff Industries Ltd. The learned Advocate adopted the arguments of the other appellants .....

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have cleared the goods at the relevant time on payment of duty by cash on CIF value + 2%. Subsequently, on demand from the Department, they have paid the differential duty on account of the debit note. He also adopted the arguments of the other appellants. 7. The learned Consultants Shri N.K. Tiwari and Shri R.R. Dave and the learned Advocate Shri Paritosh Gupta also submitted that no redemption fine and penalty should be imposed in their cases as they had paid the Customs duty on the bonafide .....

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d the learned Consultants also submitted that the extended period of limitation cannot be invoked in their cases as the appropriate duty liability was discharged on a bonafide belief and they relied upon the Board s Circular No.32/2004-Cus, dt.11.05.2004 to establish the bonafide belief. It was also submitted that in the case of M/s Manish Chemicals, M/s Monarch Dyestuff Industries Ltd and M/s Loxim Industries Pvt. Ltd, since the goods were cleared under advance licences, there is no intention t .....

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e goods on High Seas Sales basis to the other appellants who had paid the Customs duty on CIF value + 2%, whereas M/s ACCIL had entered into sale agreement with the other appellants for sale of goods at a higher value, and the differential amounts were recovered by M/s ACCIL by way of debit notes. Therefore, as per law, the Customs duty should be paid on the enhanced value including the debit note value. He drew the attention of the Bench to the findings of the Adjudicating authority in the inst .....

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15) ELT 593 (S.C.) 10. As regards the balances in the advance licenses, the learned A.R. submitted that the Appellants had not come forward at the time of investigation to remit the differential duty demanded by way of debiting the advance licences and they had voluntarily paid the differential duty by cash and therefore, he contends that the findings of the Adjudicating authority that the said plea cannot be accepted, is proper and just. 11. On careful consideration of the arguments of both the .....

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the Customs Act as it stood at the relevant time, is reproduced:- 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 exportat .....

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old the goods on High Seas Sales basis to the other appellants. The said sale constitutes a sale in the course of international trade and the price at which the same is effected is the sole consideration for the sale. Hence, the assessable value will be the value at which M/s ACCIL sold the goods to the other appellants, who were the actual importers and who filed the Bills of Entry and paid Customs duty and cleared the goods. It is not disputed that M/s ACCIL has sold the goods at High Seas Sal .....

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In the case of International Steel Corporation also, there is no High Seas Sales. We find that on the contrary, the decision of Hon ble Apex Court in the case of M/s Hyderabad Industries Ltd (supra) is applicable to the facts and circumstances of the present matter. The Hon'ble Apex Court in the said case held that it is not the value or the price at which the importers (MMTC) procure the goods from their suppliers in foreign country, but the price on which MMTC sell the goods to Indian buy .....

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ipulates that if the importer can demonstrate that the immediate sale under consideration took place with a view to export the goods to the country of importation, then such transaction would constitute an international transfer of goods. The later transaction which led to the import would be the relevant transaction for assessment and Rule 4 of Customs Valuation Rules, 1988 would apply. Hon ble Supreme Court, in the case of M/s. Hyderabad Industries Limited [2000 (115) E.L.T. 593 (S.C)] have al .....

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with the importer. The importer would be required to furnish the entire chain of documents, such as Original Invoice, high-seas-sales-contract, details of service charges/commission paid etc., to establish a link between the first international transfer of goods to the last transaction. In case of doubt regarding the truth or accuracy of the declared value, the Department may reject the declared transaction value and follow the sequential methods of valuation under Customs Valuation Rules, 1988 .....

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instant case, it is clearly established that M/s ACCIL has entered into the sales agreement with the other appellants and had not furnished the details to Customs authorities, but raised the debit notes and recovered higher amounts from their buyers. Therefore, we find force in the arguments of the learned Authorised Representative for the Revenue that the extended period of limitation is rightly invoked in the instant case. 16. As regards the redemption fine, we find force in the arguments of .....

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