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2016 (7) TMI 359 - CESTAT BANGALORE

2016 (7) TMI 359 - CESTAT BANGALORE - 2016 (340) E.L.T. 389 (Tri. - Bang.) - Valuation - rejection of transaction value - contemporaneous import of similar goods at another port - Held that:- nowhere the original adjudicating authority and the Commissioner (Appeals) in their orders have been able to convincingly reject the transaction value declared by the appellants in their import documents. We find that the Revenue has not been able to convincingly prove that the contemporaneous imports quote .....

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ble to convincingly reject the transaction value declared by the importer. - demand set aside - Decided in favor of assessee. - C/394/2006, C/395/2006, C/396/2006, C/397/2006 and C/337/2006 - Final Order No. 20391-20395/2016 - Dated:- 6-6-2016 - Shri S. S. Garg, Judicial Member and Shari Ashok K. Arya, Technical Member Mr. M.S. Nagaraj, Advocate - For Appellants Mr. Pakshi Rajan, A.R. - For Respondent ORDER These five appeals have respectively been filed by M/s Peekay Steel Castings Pvt. Ltd., C .....

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milar goods imported at other Ports ordered the enhancement of value of imported goods and issued respective Orders-in-Original accordingly. 2.2 The appellants filed appeals before the Commissioner (Appeals) against the respective Order-in-Original enhancing the value of the imported goods. The Commissioner (Appeals) rejected these appeals. Thereafter the appellants are before this Tribunal against those Orders-in-Appeal passed by the Commissioner (Appeals). The details of these cases mentioning .....

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80.940 253 (As per supplier s invoice) 268 22.886 Excess Duty paid : Total 53,242 TABLE 2 APPEAL No. C/395/2006-M/s Peekay Re-Rolling Mills (P) Ltd against Order-in-Appeal N 143/06 dated 22.5.2006 Bill of Entry Number & date Quantity of HMS (MT) Value Declared by Appellants (Us $ per MT) Value Adopted by Customs (US $ per MT) Excess Duty Paid (Rs) 145125/13.7.04 303.090 210 (As per invoice) 268 1,48,234 145585/23.7.04 135.51 230 (As per invoice) 268 43,422 Excess duty paid : Total 1,91,656 T .....

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s Peekay Re-Rolling Mills(P) Ltd against Order-in-Appeal No 145/06 dated 22.5.2006 Bill of Entry Number & date Quantity of HMS (MT) Value Declared by Appellants (Us $ per MT) Value Adopted by Customs (US $ per MT) Excess Duty Paid (Rs) 146423/11.8.04 288.930 220 268 1,18,603/- 146424/12.8.04 334.340 230 268 1,08,651/- 146656.18.8.04 206.980 260 268 14,161/- 146731/19.8.04 407.871 225 268 1,49,987/- Excess duty paid : Total 3,91,402/- TABLE 5 APPEAL No C/337/2006 - M/s Peekay Re-Rolling Mills .....

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These appellants were represented by the learned Advocate, Shri M.S. Nagar4aja, who mainly pleaded as follows: (i) The appellants submitted before the original adjudicating authority as well as the Commissioner (Appeals) that the relevant documents including original invoices from Foreign Suppliers, Certificate of Origin, irrevocable LC issued for negotiating the value, proforma Invoices, Bill of Lading, Packing List, Statement showing the import of HMS, etc. to show that the appellants were re .....

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cannot be determined under clause (i) then only the value shall be determined by proceeding sequentially under Rules 5 to 8 of the Rules. (iv) In terms of Rule 4(1), transaction value of imported goods shall be the price actually paid or payable for the goods. The transaction value shall be rejected only when transactions come within the scope of exceptions or special circumstances particularized in Rule 4(2) of the Customs Valuation Rules, 1988. (v) The adjudicating authority and the Commission .....

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) In the absence of any grounds to reject the transaction value, the adoption of the comparable goods in terms of Rule 6 of the Customs Valuation Rules, 1988 is not legally correct and proper. (viii) The appellants rely on the following decisions of the Hon ble Supreme Court and the CESTAT, Chennai : (a) Eicher Tractors Ltd. Vs. CC, Mumbai [2000 (122) E.L.T. 321 (S.C.)] (b) Choudhary Ship Breakers Vs. CC, Ahmedabad [2010 (259) E.L.T. 161 (S.C.)] (c) CCE, Vishakapatnam Vs. Agarwal Industries Ltd. .....

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or of Customs [2003 (167) E.L.T. 625 (S.C.)] and the CESTAT, Mumbai s decision in the case of Gira Enterprises Vs. Commissioner of Customs, Ahmedabad [2006 (194) E.L.T. 92 (Tri.-Mumbai)]. 5. All the facts in these appeals and the submissions of both the sides and the case laws relied upon by them have been carefully considered. 6. We find that the Revenue ordered enhancement of value of the imported goods mainly giving the reasoning that the same material was imported through other Ports on diff .....

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missioner (Appeals) in these cases sustained the orders of the original adjudicating authority enhancing the value. However, we find that nowhere the original adjudicating authority and the Commissioner (Appeals) in their orders have been able to convincingly reject the transaction value declared by the appellants in their import documents. We find that the Revenue has not been able to convincingly prove that the contemporaneous imports quoted by the original adjudicating authority in the orders .....

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Customs Valuation Rules 1988 before deciding he valuation of imported goods under Rule 6 of the Customs Valuation Rules, 1988. There is no proper justification given by the Revenue for ordering enhancement of the value declared by the appellants as per the provisions of Customs Valuation Rules, 1988. Proviso to Rule 4(2) of the Customs Valuation Rules, 1988, Give special Circumstances saying that where these conditions/circumstances exist, it is binging on Customs to accept the price actually pa .....

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rted goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. (2) The transaction value of imported goods under sub-rule (1) above shall be accepted : Provided that - 1. [(a) the sale is in the ordinary course of trade under fully competitive conditions; (b) the sale does not involve any abnormal discount or reduction from the ordinary competitive price; (c) the sale does not involve specia .....

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value of the goods; 1[(f)] the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; 1[(g)] no part of the proceeds of any subsequent resale, disposal or use of the goods 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 (h) the buyer and seller are not related, or where the buyer and selle .....

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this case refers to the un-amended Rules 4(2) of Customs Valuation Rules, 1988, which was later amended by way of insertion /renumbering by M.F. (d.R.) notification No. 41/2001-Cus (N.T.), dated 7-9-2001. The Hon ble Supreme Court in this case inter-allia observed as follows : 7. The rules which have been framed are the Customs, Valuation (Determination of Price of Imported Goods) Rules, 1988. The rules came into force on 16th August, 1988. Under Rule 3(i) the value of imported goods shall .....

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lly paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4(2) namely : (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affec .....

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r are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3). 9. These exceptions are in expansion and explicatory of the special circumstances in Section 14(1) quoted earlier. It follows that unless the price actually paid for the particular transaction falls within the exceptions, the Customs authorities are bound to assess the duty on the transaction value. 10. …. …. …. 11.  …. …. …. 12.& .....

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ituation where payment of price may be deferred. 13. … …. …. 14. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules. 6.4 Further in the cas .....

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f Rule 6 of the Customs Valuation Rules (CVR), 1988. In other words, Revenue has not followed the provisions of Rule 3 (ii) of CVR, 1988, which say that where value of imported goods cannot be determined under Rule3 (i) of CVR, 1988, it has to be determined by proceeding sequentially through Rules 5 to 8 of these Rules. Let us further refer here to the Hon ble Supreme Court s decision in the case of Chaudhary Ship Breakers (supra), where in the Para 15 the observations are as under : 15. &hellip .....

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en sold for export to India, adjusted in accordance with the provisions of Rule 9 of these Rules. It is clear from a conjoint reading of Rule 3(i) and Rule 4(1) that the adjudicating authority is bound to accept the price actually paid or payable for the goods as the transaction value, except where exceptions enumerated in Rule 4(2) are attracted, which is not the case here. It is, therefore, manifest that both Section 14(1) and Rule 4 provide that in the absence of any of the special circumstan .....

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nsaction value and onus in such cases to prove the undervaluation is on the Revenue. In this regard, we quote from this decision of the Hon ble Supreme Court to reinforce the stand that the Revenue has not been right in all these appeal cases when the declared invoices value were enhanced by the adjudicating authority. The Hon ble Supreme Court in this case inter-alia observes as under : 11. …. …. …. …. Needless to add that reason to doubt does not mean reason to susp .....

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n which reliance is sought to be placed by the revenue. It is well settled that the onus to prove undervaluation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct. 12. …. …. …. ….  Therefore, unless the price actually paid for a particular transaction falls within .....

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e price actually paid for the particular transaction, unless the price is unacceptable for the reasons set out in Rule 4(2). [Also See : Rabindra Chandra Paul v. Commissioner of Customs (Preventive), Shillong, (2007) 3 SCC 93 = 2007 (209) E.L.T. 326 (S.C.)] 13. Applying the above principles to the facts in hand, we are of the opinion that the revenue erred in rejecting the invoice price. As stated above, in the present case the whole controversy arose on account of difference in price of th .....

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the international price of the commodity involved. We are, therefore, of the opinion that the revenue was not justified in rejecting the transaction value declared by the respondents in the invoices submitted by them. 6.6 We also take support from the decision of CESTAT, Chennai in the case of Commissioner of Customs, Chennai Vs. Pushpanjali Silks Pvt. Ltd. (supra) which held that unless there is contention by the Department that any amount over and above the agreed price was paid by importer to .....

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