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2016 (2) TMI 542 - CESTAT AHMEDABAD

2016 (2) TMI 542 - CESTAT AHMEDABAD - 2016 (344) E.L.T. 366 (Tri. - Ahmd.) - 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 .....

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arly 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. - 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 b .....

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d (100% EOU) (ACCIL for short), imported six consignments of H. Acid and Bita 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 fr .....

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Shri Anand Mishra, learned Counsel appearing for M/s ACCIL submits that the goods 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 asses .....

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the decision of this Bench of the Tribunal in International Steel Corporation 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 N .....

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ce (DEEC). Subsequently, on demand of differential duty by the Department on 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 .....

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account of the debit note was paid by the M/s ACCIL in the case of M/s Hind Prakash 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 Indus .....

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e learned Consultant Shri R.R. Dave appearing for M/s Orjet submits that they 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 .....

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e leviable on them in accordance with the law. 8. All the learned Counsels and 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, .....

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ers on High Seas Sales. He submits that in this matter, M/s ACCIL has sold the 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 att .....

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Hon ble Apex Court in the case of M/s Hyderabad Industries Ltd Vs UOI 2000 (115) 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, .....

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in the course of international trade. For better appreciation, Section 14 of 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 of .....

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is the sole consideration for the sale. 13. In the instant case, M/s ACCIL sold 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 .....

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ce Ltd & Ors. (supra), there is no High Seas Sales of the goods involved. 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 .....

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into account the Advisory Opinion 14.1 of the GATT. Valuation Code, which stipulates 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 ca .....

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gh-seas-sales-transaction constituted an international transfer of goods lies 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 f .....

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een the first international transfer of goods to the last transaction. In the 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 .....

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