TMI Blog2023 (3) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... iving at the assessable value. However, the requirement of Section 14 and the Customs Valuation Rules need to be satisfied for enhancement of value. Nothing is forthcoming from the record of the case from which the basis for such re-assessment can be made out. Rejection of declared value on Bill of Entry is a serious affair and the same could have been rejected on the basis of cogent examination of evidences and justifiable reasons. From plain reading of the Rule 12 it is quite evident that the word doubt used in the rule has to be based on cogent reasons and evidences. No cogent evidence or reason has been put forth in the present case to justify the doubt of the assessing officer. Clearly, for rejection of the transaction value under Rule 12, there has to be a reasonable ground and it cannot be rejected merely on the ground that similar goods have been imported at higher value without examining the applicability of Rule 5 of Customs Valuation Rules, 2007. In the present case, the adjudicating authority enhanced the value as the declared value appears to be low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 34/2015-CE dtd. 17.07.2015. However Ld. Commissioner (Appeals) vide impugned orders-in-appeal has upheld the order of original adjudication authority. Aggrieved by the said Orders In-Appeal the Appellants have filed theses appeals. 3. Shri Jatin Mahajan, Learned Advocate appearing on behalf of the appellant submits that the lower authorities have erred in invoking the provisions of Rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which is precursor for rejection of declared value. Ld. Authorities have failed to give consideration to the contracts registered by the appellant prior to causing import of the goods under consideration. NIDB data cannot be the sole ground for rejection of the transaction value without any evidence to prove that the goods under import have been undervalued. 3.1 Without prejudice to the conditions that NIDB data cannot be applied in the present case, he submits that both the authorities have grossly erred in invoking the provisions of Explanation (1)(iii)(a) to Rule 12(2) of the Rules inasmuch as the pre-condition regarding comparable commercial transaction prescribed therein is not fulfilled. 3.2 He also su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the exemption in Rule 3(2), the customs authorities are bound to assess the duty on the transaction value. Both Section 14(1) and Rule 3 provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken on the value in the absence of any special circumstance indicated in Section 14(1) and particularized in Rule 3(2). 3.6 He also argued that in the present matter Ld. Commissioner failed to appreciate that the benefit of Exemption Notification No. 34/2015 dtd. 17.07.2015 was available on goods in question and the adjudicating authority has not dealt with the issue at all despite specific plea of the appellant .Therefore CVD charged and collected in the Bills of Entry is without the authority of law. He placed reliance on the following decisions. SRF Ltd. Vs. Commissioner -2015(318)ELT 607(SC) Commissioner Vs. Ashima Dyecot Ltd. 2011(267)ELT 122 Hero Cycle Ltd. Vs. Union of India -2009(240)ELT 490 (Bom.) Share Medical Care Vs Union of India 2007(209)ELT 321 (SC) M/s Artex Textiles Pvt. Ltd. Vs. Commissioner of Customs- Final order No. 50953-502954/2019 dtd. 24.07.2019 Commissioner of Customs (Port), Kolkata Vs. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valuation Rules. Section 14 of the Customs Act, 1962 read with Customs Valuation Rules makes it abundantly clear that transaction value in the ordinary course of commerce is to be taken as the assessable value. The Customs Valuation Rules outlines the step-by-step methodology to be adopted for re-determination of the assessable value in certain cases. The primary requirement for re-determination of the value is that the transaction value should be rejected for cogent reasons prescribed in the Customs Valuation Rules. If the transaction value is rejected, then the Customs Valuation Rules prescribes the basis for arriving at the assessable value. However, the requirement of Section 14 and the Customs Valuation Rules need to be satisfied for enhancement of value. Nothing is forthcoming from the record of the case from which the basis for such re-assessment can be made out. Rejection of declared value on Bill of Entry is a serious affair and the same could have been rejected on the basis of cogent examination of evidences and justifiable reasons. Hon ble Supreme Court has in case of Eicher Tractors [2000 (122) E.L.T. 321 (S.C.)] laid down very categorical as follows : 6. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) 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; (c) 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 (d) the buyer and seller are not related, or where the buyer and seller 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.The respondent's submission is that the phrase the transaction value read in conjunction with the word payable in Rule 4(1) allows determination of the ordinary international value of the goods to be ascertained on the basis of data other than the price actually paid for the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... data would become redundant. 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. 15.The Assistant Collector in this case determined the value of the imported goods under Rule 8. The question is whether he should have determined the transaction value under Rule 4 at the price actually paid by the appellant for the 1989 bearings. Naturally, if Rule 4 applies to the facts of this case, the Assistant Collector's reasoning under Rule 8 must, by virtue of language of Rule 3(ii), be set aside. 16.The Assistant Collector appears to have proceeded on the law as it was prior to the 1988 Rules when 'special considerations' on the basis of which a transaction was held not to be an ordinary sale in the course of international trade within the meaning of Section 14(1), had not been statutorily particularised. 17.As to what would constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally paid. Nor was there a mis-description of the goods imported as was the case in Padia Sales Corporation. It is also not the respondent's case that the particular import fell within any of the situations enumerated in Rule 4(2). No reason has been given by the Assistant Collector for rejecting the transaction value under Rule 4(1) except the price list of vendor. In doing so, the Assistant Collector not only ignored Rule 4(2) but also acted on the basis of the vendor's price list as if a price list is invariably proof of the transaction value. This was erroneous and could not be a reason by itself to reject the transaction value. A discount is a commercially acceptable measure, which may be resorted to by a vendor for a variety of reasons including stock clearance. A price list is really no more than a general quotation. It does not preclude discounts on the listed price. In fact, a discount is calculated with reference to the price list. Admittedly in this case discount up to 30% was allowable in ordinary circumstances by the Indian agent itself. There was the additional factor that the stock in question was old and it was a one time sale of 5 year old stock. When a dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value shall be determined by proceeding sequentially in accordance with rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non-declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. From plain reading of the Rule 12 it is quite evident that the word doubt u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by the appellant are of Mixed lot of Polyester Knitted Fabric (Rolls of Assorted Colors Weight), the value of the above referred type of fabrics is low because the goods are mixed lot of fabrics of different colours and different weight and quality is not same as fresh quality polyester knitted fabrics. 4.6 We noticed that in present matter no effort was made by the adjudicating authority to ascertain quality, quantity, characteristics of the goods of contemporaneous import. In the present import without carrying out any test to the fact that goods of contemporaneous import and the goods in question in present case are identical or similar, enhancement of the value is not legal and correct. It is also observed that other than contemporaneous import data, there is no other evidence to show that the assessee have suppressed the value. 4.7 We find that in the present case, the adjudicating authority enhanced the value as the declared value appears to be low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on the basis of NIDB data. Tribunal in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larified by the Central Board of Excise and Customs vide Circular No. 1005/12/2015-CX dated 21.07.2015. The same is reproduced below:- Circular No. 1005/12/2015-CX, dated 21-7-2015 Make in India Policy Removal of disadvantage to domestic manufacturers vis-a-vis importers Circular No. 1005/12/2015-CX., dated 21- 07-2015 F. No. 336/4/2015-TRU Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Judgment of the Supreme Court in the case of M/s. SRF Ltd. versus Commissioner of Customs. Chennai - Clarification relating to notifications No. 30/2004-Central Excise, dated 9-7-2004. No. 1/2011-Central Excise dated 1-3-2011 and No. 12/2012-Central Excise dated 17-3-2012, as amended - Regarding. It may recalled that the Hon'ble Supreme Court, in the case of M/s. SRF Ltd. versus Commissioner of Customs, Chennai and M/s. ITC Ltd. v/s. Commissioner of Customs (I G), New Delhi [2015 (318) E.L.T. 607 (S.C.)] relating to CVD exemption, has held that the benefit of excise duty exemption [available to final products manufactured by the domestic manufacturer, subject to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes nil duty or tax or concessional duty or tax, whether or not read with any relevant exemption notification for the time being in force. 7. It may, therefore, be noted that the domestically manufactured goods covered under these notifications/entries continue to be exempt from excise duty or subject to concessional rate of excise duty, as the case may be, as they were prior to 17th July, 2015. 8. Trade Notice/Public Notice may be issued to the field formations and taxpayers. 9. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board. The above circular was issued as a consequent to the Hon ble Supreme Court judgment in the case of SRF LTD. VS. COMMISSIONER OF CUSTOMS, CHENNAI-2015 (318) ELT 607 (S.C.) and AIDEK TOURISM SERVICE PVT. LTD Vs. COMMISSIONER OF CUSTOMS, NEW DELHI- 2015 (318) ELT 3 (S.C.). Wherein, it was held that the condition of non availment of Cenvat Credit on input/capital goods need not to be satisfied by the buyer/importer of such goods. In view of the above circular, the appellant was entitled for exemption from CVD at the time of clearance of the imported goods in terms of Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 30/2004-C.E., dated 9-7-2004 where LAA has allowed the benefit. We find that the respondents appealed against the assessment of Bill of Entries where CVD has been charged without giving the benefit of the notification. The LAA in the impugned orders while allowing the appeal has discussed the issue in detail and also relied on this Tribunal's Division Bench decisions in the case of Prashray Overseas Pvt. Ltd. (supra) and also relied Tribunal's decision in Nhava Sheva v. Ashima Dyecot Ltd. (supra) and Mapsa Tapes Pvt. Ltd. case (supra). 12 . On perusal of the grounds of appeal already reproduced above, the Revenue's contention that LAA has not considered the Tribunal's Larger Bench decision in the case of Priyesh Chemicals Metals v. CCE, Bangalore (supra) and further contended that this Chennai Tribunal's Bench decision in the case of Prashray Overseas Pvt. Ltd. (supra) relied by LAA has not attained finality as Revenue preferred appeal against Tribunal order before the Hon'ble High Court, Madras which is still pending. Revenue also contended that notification in question should have been given effect to prospectively and the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed silk yarn. Neither party disputes that imported silk yarn was exempt from CVD during the material period in terms of Notification No. 20/2006- Cus., dated 1-3-2006. We find that the levy of CVD on imports is regulated by the following provisions of the Customs Tariff Act, 1975. 3. Levy of additional duty equal to excise duty. - Any article which is imported into India shall, in addition, be liable to a (1) duty (hereafter to this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article. CVD is therefore payable on imported silk fabrics at the rate central excise duty is leviable for the time being on such silk fabrics produced or manufactured in India. Additional duty is imposed on imported goods to counter balance the central excise duty leviable on like articles made indigenously, this being a measure intended to safeguard the interests of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules, 2002, in respect of the capital goods used for the manufacture of these goods. 6. In the present case, admitted position is that no such Cenvat credit is availed by the appellant. However, the reason for denying the benefit of the aforesaid Notification is that in the case of the appellant, no such credit is admissible under the Cenvat Rules. On this basis, the CEGAT has come to the conclusion that when the credit under the Cenvat Rules is not admissible to the appellant, question of fulfilling the aforesaid condition does not arise. In holding so, it followed the judgment of the Bombay High Court in the case of Ashok Traders v. Union of India [1987 (32) E.L.T. 262], wherein the Bombay High Court had held that it is impossible to imagine a case where in respect of raw naphtha used in HDPE in the foreign country, Central Excise duty leviable under the Indian Law can be levied or paid. Thus, the CEGAT found that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied. 7. We are of the opinion that the aforesaid reasoning is no longer good law aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India is not necessary. For quantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of excise duty was leviable thereon. (Emphasis supplied) 8. We are of the opinion that on the facts of these cases, these appeals are squarely covered by the aforesaid judgments. We accordingly hold that appellants were entitled to exemption from payment of CVD in terms of Notification No. 6/2002. The appeals are allowed and the demand of CVD raised by the respondents-authorities is set aside. The ratio of the Apex Court's decision is squarely applicable to the present case where CVD exemption was denied under Notfn. No. 30/2004 where the proviso to the notification stipulated the condition that the exemption is not applicable if credit of duty on inputs or capital goods has been taken under CCR. 15. Further, we find the Hon'ble Apex Court in the case of AIDEX Tourism Services Pvt. Ltd. v. CC (supra) has not only considered the cases of Thermax Private Ltd. and Hyderabad Industries Ltd. but also discussed the Apex Court's decision in the case of Mot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect conflict. Hon'ble Supreme Court has clearly considered all the previous decisions of Apex Court including the decision in the case of Motiram Tolaram v. UOI (supra). Therefore, the Revenue relying on the above case law and also the LB decision in the case of M/s. Priyesh Chemicals Metals (supra) are not relevant. In view of the latest decision of Apex Court in SRF case AIDEK Tourism Services Pvt. Ltd., the issue of CVD exemption under Notfn. No. 30/2004 on imported goods has attained finality. This Tribunal Bench decisions in the case of M/s. Prashray Overseas Pvt. Ltd. v. CC, Chennai stands confirmed by the Hon'ble Supreme Court in the above decision. 17 . Before parting, we wish to record that the respondents repeatedly pleaded that under ICES-EDI system the Notification No. 30/2004-C.E., dated 9-7-2004 has not yet been uploaded and not figuring in the system for assessment even after a decade. This fact was already reported in this Tribunal order dated 10-8-2010 in the case of M/s. Elegant Fabric v. CC, Chennai (supra). Therefore, we bring to the notice of the Chairman, C.B.E. C. DG (Systems), C.B.E. C., New Delhi to rectify and upload the said notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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