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M/s Beam Global Spirits & Wine (India) Pvt. Ltd., M/s Pernod Ricard India (P) Ltd. Versus CC, New Delhi

Valuation - related party transaction - comparable prices - import of foreign scotch - Though the principal company was registered in USA, but the goods were imported from Scotland by making the payment in foreign currency i.e. British pound. The invoices produced by the assessee-Appellants were rejected by the Customs Department and had taken the value from their own resources which were on higher side - Held that: - an identical issue has come up before the Hon’ble Supreme Court in the case of .....

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relevant material in the first round of litigation before the Tribunal as well as before Hon’ble Delhi High Court to support his arguments. At this belated stage, demanding of the documents i.e. comparable chart is nothing but a dilatory tactics just to delay the proceedings as the period under consideration starts from 2003. The original authority has already given the chart by mentioning that the “Concentrated Alcohol Beverages‟ (CAB) was diluted upto 60% concentrate. - There is no r .....

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able. Hence, by upholding the impugned order along with the reasons mentioned therein, there is no merit in the appeal filed by the assessee-Appellants. - Interest - Held that: - the provisions of sub-sections (3) and (4) of Section 15 were inserted on 13.07.2006 vide Section 21 of the Taxation laws (Amendment) Act, 2006 - The said provision is not applicable retrospectively. Hence, prior to 13.07.2006, no interest can be charged. Therefore, the ground for charging interest retrospectively i .....

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er-in-Appeal No.877/2013 dated 31.12.2013 passed by the Commissioner of Customs (Appeals), New Delhi. The period in dispute is March 2003 to June 2011. 2. The brief facts of the case are that, during the period under consideration, the assessee-Appellants have imported the foreign scotch from its principal M/s Beam Global. Though the principal company was registered in USA, but the goods were imported from Scotland by making the payment in foreign currency i.e. British pound. The invoices produc .....

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ded the matter to the original authority. The matter had ultimately reached to the Hon ble Delhi High Court where the interim order of the Commissioner (Appeals) was challenged. The Hon ble High Court vide order dated 31.07.2013 had set aside the order-in-appeal dated 20.06.2013 and directed the assessee-Appellants to deposit ₹ 15 crores. The direction was also given to decide the issue de novo. As per the direction, the issue was decided de novo which resulted in the present appeal. 4. Wi .....

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by the Department in an arbitrary manner on the basis of the value which was available in the year 1999. He also submits that due to the fact that the principal had supplied the goods at the prices available during the period under consideration have now fallen down, so the prices taken by the Department in the year 1999 is not applicable in the instant case. To support his arguments, he relied upon the ratio laid down in the following cases : (i) Seagram Manufacturing Ltd. Vs CC, New Delhi - 2 .....

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d by the assessee-Appellants from its principal. 6. As regards the interest, he submits that the interest before 13.07.2006, cannot be charged for the reason that the provisions of sub-sections (3) and (4) of Section 18 were inserted on 13.07.2006 vide Section 21 of the Taxation Laws (Amendment) Act, 2006. To support his contention that interest cannot be charged retrospectively i.e. prior to 13.07.2006, he relied upon the judgment of the Tribunal in the case of Sterlite Industries (India) Ltd. .....

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l as well as Hon ble Supreme Court in the case of Pernod Ricard India (P) Ltd. Vs CC, ICD TKD, 2010 (256) ELT 161 (SC), wherein the assessee s appeal was dismissed and the question of bulk discount was rejected. He also submits that the valuation of the goods, in the instant case, was taken on comparison with the similar goods. He also submits that, to substantiate findings, the original authority has prepared the chart, as mentioned in his order. The learned DR further submits that the main gri .....

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iples of natural justice were violated in terms of non-intimation about the import data of such period for challenging the assessment, especially, to ascertain the lowest contemporaneous transaction value as per the said Valuation Rules. I find that this contention is totally untenable as the Appellant is aware of the entire facts throughout the disputed period and also was given opportunity by issuing the show cause notice dated 24.07.2003. In fact, it is also observed that the Appellant approa .....

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sted that Rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and Rule 6 of then Customs Valuation Rules, 1988 are not applicable as the comparable values of the similar goods imported ought to be in close temporal proximity to the goods being valued in order to comply with the said Rules. From the perusal of the impugned order, I find that this aspect has been considered on the facts that the RSP of the similar goods and the brands thereof vis-à-vis the imp .....

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assed as per law. According to him, no old record is available with the Department 8. In counter, the learned counsel for the assessee-Appellants, submits that para 8 of the impugned order is factually incorrect as the original authority in his chart has mentioned that the prices were not available. At the cost of repetition, the Department has not given any comparable list. 9. At this stage, learned DR for the Department submits that no old record is available and assessee-Appellants might have .....

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more importer namely M/s Pernod Ricard Spirits and Wine Limited have also been importing blended whiskies of higher concentration since 1994 for their brands namely 100 Pipers, Passport and Something Special. In this case also the importer has been importing these whiskies from related person. In this case also the importer had not correctly declared the value of the imported CAB imported from the related party, therefore, provisional assessment was done and the investigation was conducted by DR .....

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dence establishing reasonableness and accuracy of adjustments. Therefore, the assessment of value of CAB used in manufacture of various brands manufactured by M/s Pernod Ricard done on the lowest value of Contemporaneous import of similar used in the manufacture of branded bottled whisky of comparable standard after adjustment of difference of RSP, of any, of bottle whisky was upheld by the Hon ble Supreme Court. 11. Needless to mention that the Hon ble Supreme Court in the case of Xerographic L .....

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ce charged was less than the normal value. In view of the above, the assessee-Appellants is related person to the supplies who is the present company. It is the allegation of the Department that the goods were supplied to the assessee-Appellants at a lower price . 12. Further, it appears that regarding the applicability of the Rule 5 and 6, the Hon ble Supreme Court in its order in the case of Pernod Ricard India (P) Ltd. has observed as under : 31. Rule 6 (2) provides that the provisions of cla .....

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oth shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence , which clearly establishes the reasonableness and accuracy of the adjustments. Interpretative Note 4 to Rule 5 reiterates that such adjustment, whether it leads to an increase or a decrease in the value, be made only on the basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustment. One of such evidences could be a valid price list containing price .....

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(c) and the interpretative Note (4) to Rule 5 only seek to clarify that where identical goods are sold to two or more buyers at a time but are not at the same commercial level or quantity, an adjustment shall be made to take account of the difference attributable to commercial level or to quantity or both. Their plea is that since the rule itself recognizes that prices differ when quantity differs, reference to discount in the interpretative note needs to be viewed in a wider context because acc .....

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the concept of adjustment and discount , reliance was placed on the decision of this Court in Commissioner of Central Excise, Jaipur v. Rajasthan SPG. & WVG. Mills Ltd. & Anr., wherein it was observed that the concept of discount and abatement are different. It was also argued on behalf of the appellant that it is a well accepted norm that higher quantity of goods attract lower prices, which fact has received judicial recognition by this Court in Mirah Exports Pvt. Ltd. v. Collector of .....

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said order, the Tribunal had held that due adjustments towards quantity differences and retail prices difference should be made wherever warranted. Thus, recognizing that in the present case some adjustments were called for. 33. We are of the considered opinion, that bearing in mind the object behind the provision for adjustment in terms of Rule 5(1)(c), the fine distinction between the words adjustment and discount sought to be brought out by the appellant is of no relevance to the controversy .....

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ty discount by the seller. It is manifest that adjustment in terms of Rule 5(1)(c) of 1988 Rules, for the purpose of determination of value of an import, can be granted only on production of evidence which establishes the reasonableness and accuracy of adjustment and higher volumes of imports per se, would not be sufficient to justify an adjustment, though it may be one of the relevant considerations. 13. Regarding sole grievance of the assessee-Appellants i.e. violation of natural justice and s .....

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dy given the chart by mentioning that the Concentrated Alcohol Beverages‟ (CAB) was diluted upto 60% concentrate. 14. It may be mentioned that the matter has reached to the Hon ble Delhi High Court, but nowhere the assessee-Appellants demanded the documents in question. Hence, at this stage, the request of the assessee-Appellants cannot be acceded to, specifically when the learned DR for the Department did mention that no old record/document is available in this case. 15. In the instant ca .....

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