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TMI Blog2016 (9) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... puted on the enhanced value; * As per the final invoice submitted by the appellant, the Fe content was 57.12% and the unit rate @ USD 114 PDMT; * The Bank Realization Certificate is also per the final Invoice i.e @ USD 114 PDMT; * Fe content as per Customs Laboratory Report was found to be 58.8%; * According to the revenue neither the enhanced value adopted by it at the time of provisional assessment of the Shipping Bills nor the value as per the final invoice produced by the appellant could be taken as the correct transaction value in terms of Section 14 of the Customs Act, 1962 and hence the same is liable to be rejected as per rule 3(3) of the Customs Valuation (Determination of value of export Goods), Rules, 2007 (referred to as CVR and liable to be re-determined as per Rule 4 to 6 of CVR sequentially; * However, Rule 4 of CVR was discarded on the ground that it was not technically feasible to find value of comparable goods/contemporaneous exports; * Rule 5 of CVR was discarded on the ground that it is not possible to arrive at computed price of the goods; * The price has value of the subject goods has ultimately determined under rule 6 of CVR consid ..... 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SD 77.08 PMT; * The Bank Realization Certificate was also per the final invoice; * The Fe content as per the Customs Laboratory Report was found to be 56.4%; * Assessment of the shipping bill was finalized @ USD 86 per unit on the basis of contemporaneous export; (v) Appeal No C/20820/2014 * The appellant filed a Shipping Bill for export of iron ore fines declaring it to be 53% Fe content and unit rate of USD 70 PDMT; * The Shipping Bill filed by the appellant was assessed provisionally subject to the outcome of the final test report; * The Bank Realization Certificate was also per the final invoice; * The Fe content as per the customs Laboratory report was found to be 52%; * Declared unit price accepted after holding that there was no documentary evidence to prove that the appellant had received excess amount over and above what was shown in the Bank Realization Certificate; (vi) Appeal No C/20821/2014 * The appellant filed a Shipping Bill for export of iron ore fines declaring it to be 55% Fe content and unit rate of USD 85 PDMT; * The Shipping Bill filed by the appellant was assessed provisionally subject to the outcome of the final test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceeds shown in the Bank Realization Certificates (BRC). c) Further as per Rule 3 of Customs Valuation (determination of Value of Export goods) Rules, 2007 subject to the provisions of Rule 8 of the said rules the value shall be 'transaction value'. In other words, to reject the transaction value, the requirements of Rule 8 shall be satisfied. d) In the present case the assessing officer had no reason to doubt the truth or the accuracy of the value declared by the appellant. No query was posed by the assessing officer to the appellant in this regard. Further, the value declared by the appellant could have been questioned or doubted only in such cases where significant variation in value at which goods of like kind and quality exported at or about the same time in comparable quantities in a comparable commercial transaction were assessed was noticed or significantly higher value compared to the market value of goods of like kind and quality at the time of export was noticed or there was misdeclaration of goods in parameters such as description, quality, quantity, year of manufacture or production. e) The CBEC Board has also issued Circular no. 12/2014 Cus-dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t report and discharge port test report the proper officer shall compare the two reports with the terms set out in the contract. Where variations in the two test reports are within tolerance limits provided in the contract and do not impinge upon the declared price, the proper officer may proceed to finalize the provisionally assessed shipping bill in terms of the provisions of Section 14 and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. (d) In cases where the load port test report and discharge port test report show a variation, so as to impinge upon the price, the proper officer shall proceed to re-determine the value of the goods in terms of Customs Valuation (Determination of Value of Export Goods) Rules, 2007. In no case, shall a price based upon the average of the two test reports be accepted for the purposes of arriving at the assessable value. (e) In cases where the transaction is being declared or is found to be between related Parties, while the above procedures will continue to be followed, the finalization of assessments shall be done by following instructions governing the investigation of such cases by SVBs. (f) The Custom Houses wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing for the Revenue reiterates the grounds of appeal stated in the appeal memorandum. 4. The learned Counsel for the respondent submits that they have discharged the export duty liability on the basis of final invoice price, which is charged from the foreign buyer, which is the transaction value under Section 14 of the Customs Act, 1962 and, therefore, the demand is not sustainable. 6. We have carefully considered the submissions made by both sides. As the issue involved lies in narrow compass, after dispensing with the pre-deposit of duty adjudged, we take up the appeal itself for final disposal. 6.1 Section 14 of the Customs Act, 1962 stipulates that for the purpose of the Customs Tariff Act, "the value of the exported goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale." 6.2 1t is not the case of the department that the buyer and seller are related. It is also not a case of the department that the respondent has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be exported provisionally. Samples of the iron ore were taken. Later, the Chemical Examiner's test result was received. In terms of the said test report, the Fe content in the iron ore was 62.6%. It was 0.6% more than the stipulated percentage of 62% for the concessional rate of duty. Consequently, revenue proceeded against the appellant and demanded differential duty. The appellants are highly aggrieved over the impugned order. The point urged was that the appellant requested for retest of the sample and the same was denied, hence, the Principles of Natural Justice were violated. 2. The learned advocate further stated instances wherein after retest the results were favourable to the assessee. 3. The learned departmental representative stated that there is no valid ground for asking for retest. 4. On a very careful consideration of the issue, we find that at the time of export of the goods, the appellant had produced the test results from a reputed laboratory. It is seen from the Chemical Examiner's report that test had been carried out after a lapse of nearly one month. The percentage of Fe content in the iron ore will not be constant consequent to evapor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been incorrectly determined based on the Wet Metric Ton (WMT) basis after enhancement, and should be set aside. The contract price entered into on the basis of DMT is to be accepted as the FOB value; and the applicable export duty has to be changed on this value. 12. In view of the above, following the cited judicial pronouncements of CESTAT, Kolkata the assessment made in the said Shipping Bills are modified to this extent, and assessment is finalized on the basis of the declared contractual value and WMT should be refunded subject to condition that "Bank Certificate" of actual price realization on DMT (based on Contract as mentioned on respective shipping bills) should be submitted before Refund Sanctioning authority by the Appellant within 60 days. 10. From the foregoing discussions we are able to conclude that the variations in Fe content were very minor, within tolerance limits, did not impinge upon the declared values since the invoice amount in each case was realized as per the BRCs. Hence the loading of assessable value in all these cases is found to be arbitrary and without any basis. 11. In the result the appeals are allowed with consequential reliefs, if any. (Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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