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M/s. Tata Ceramics Ltd Versus Commissioner of Customs Cochin-Cus

2016 (3) TMI 7 - CESTAT BANGALORE

Valuation of Ceramic tableware as per Rule 4 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and the Interpretative Notes Schedule to the said Rule - Goods manufactured in SEZ meant for export were damaged by floods- Auction was conducted for realizing salvage value by issuing tender and inviting the bids in association with Insurance Company- Held that: Department has not been able to prove that how did the appellant not observe the right procedure, when the procedur .....

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the said value. Also, damage in the goods in question were of different degree when compared with the goods which were auctioned earlier, where the damage was not to this much extent. Therefore, the value fetched during the auction as cum-value accepted. Decided in favour of appellant with consequential relief - C/370/2006-DB - Final Order No. 20163 / 2016 - Dated:- 20-1-2016 - SHRI M.V.RAVINDRAN, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner .....

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d to have been damaged because of the flood affecting their factory premises on 22.5.2004. The said damaged tableware (assorted mugs) were sold in public auction/tender without informing or obtaining permission from the Department for a sum of ₹ 2,11,111/-. The auction was conducted in the interest and on behalf of the Insurance Company with whom the appellants filed their compensation. 2.1 The appellant viz., M/s. Tata Ceramics Ltd. declared the value of goods as ₹ 1,39,578/- in the .....

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c., and Bill of Entry No.108 dated 31.2.2005 as mentioned in the Assessment Order dated 20.12.2005 issued by Dy. Commissioner of Customs, SEZ, Cochin. The Department consequently fixed the value under Rule 6 on the basis of similar transaction(s). The Department gave personal hearing before deciding the matter by the Assessment Order No.1/60/2004/CSEZ/Cus. dated 20.12.2005. The Deputy Commissioner of Customs, Cochin SEZ rejected the appellant s declared value of ₹ 1,39,578/- at ₹ 2.1 .....

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ssioner (A), Cochin. The appellant has mainly pleaded as follows: (i) In their case their unit is located in SEZ (Special Economic Zone) and when the goods are cleared from the said unit to DTA (Domestic Tariff Area), local auction price is to be taken as the assessment value for payment of duties of Customs. (ii) Here the sale was not to a related person and the buyer of the goods was the successful competitive bidder approved by the Insurance Company and there is no allegation by the Departmen .....

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t in lots for sale. Therefore, a sale similar to those held in the past where smaller lots of damaged goods were offed for sale after permitting prospective bidders to inspect the lots cannot be compared with the present sale. (vi) There is no justification for the Revenue to refix the assessable value while making recourse to Rule 6 of the Customs Valuation Rules, 1998. (vii) Under the Customs Act, duty is levied on transaction value and not on a value which the Department thinks could have bee .....

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nviting the applications and considering the quotations received from prospective bidders. (ix) The appellant has also submitted the invoices for the said transaction whereby they sold the said goods at total value of ₹ 2,11,111/-, where they have separately indicated the landing charges, duty charges as well as VAT (Sales Tax) element. The appellant herewith has pleaded that the value realized through auction included all tax element including the Customs duty before the goods were delive .....

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8. 4. Revenue represented by learned AR Shri Mohd. Yousuf, Addl. Commissioner vehemently argued that the appellant sold the said goods not through perfect competitive bidding. When the receipts of the appellant are compared with reference to their earlier auctions for the same item(s) viz., chipped table ware, the present receipts are very low as mentioned in the Order-in-Original, therefore, the receipts (value) received by the appellant have to be discarded and value refixed by the Department .....

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y, the appellant conducted the auction for realizing the salvage value by issuing tender and inviting the bids. It has been admitted by the appellant that this auction was on a lot basis only and no individual inspection of tableware was possible. The appellant in the Bill of Entry described the goods initially as damaged tableware and valued at ₹ 1,39,578/-. But the Customs later on described these goods as chipped mugs and revalued them at ₹ 4,58,445/- as per the Assessment Order i .....

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