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TMI Blog2023 (6) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... of Entry. The revenue enhanced value as per NIDB data. We observed that the transaction value declared by the importer should form the basis of assessment unless the same is rejected, for the reasons set out in Rules of the Customs 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 redetermination 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estrictions 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 affect the value of the goods; (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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al provisions of these rules and sub-section (1) of Section 14 of the Customs Act, 1962 and on the basis of data available in India." If the phrase 'the transaction value' used in Rule 4 were not limited to the particular transaction then the other Rules which refer to other transactions and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o all customers. 21. As already noted all these cases dealt with imports made prior to the coming into force of the Rules in 1988. Now the 'special considerations' are detailed statutorily in Rule 4(2). 22. In the case before us, it is not alleged that the appellant has mis-declared the price actually paid. Nor was there a misdescription 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 pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that :- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; contemporaneous import goods were relied upon, but both the adjudicating authority failed to ascertain that whether the goods of contemporaneous imports is identical or similar to the goods of the assessee . Appellants have disputed the said comparable data on the ground that contemporaneous goods provided by the revenue is for Polyester Knitted Fabrics whereas goods imported 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 sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. ii) The appellant has failed to fulfill the conditions of Notification No. 30/2004-CE dated 09.07.2004 as amended i.e. non taking of Cenvat Credit on inputs/capital goods. We find that the appellant in principle entitle for exemption Notification as the condition of non availment of Cenvat Credit need not to be satisfied by the importer in respect of imported goods. The same has been clarified 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 21-7-2015 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 9-72004. No. 1/2011-Central Excise dated 1-3-2011 and No. 12/2012Central Excise dated 17-3-2012, as amended - Regarding. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised about the use of the phrase of "appropriate duty". In this regard. Explanations have been inserted in the notifications No. 30/2004C.E., dated 9-7-2004, No. 1/2011-C.E., dated 1-3-2011 and No. 12/2012-C.E., dated 17-3-2012 so as to clarify that the appropriate duty or appropriate additional duty or appropriate service tax for the purposes of the said notifications/entries includes 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 SERVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods is admissible. The relevant order in ENTERPRISES INTERNATIONAL LTD (Supra) is reproduced below: - 11. We have carefully considered the submissions of both sides and also perused the records, case laws and the Revenue's grounds of appeal. The short issue in all these Revenue appeals against the admissibility of CVD exemption on the imported goods i.e. Silk Yarn and Silk Fabrics under Notification No. 30/2004-C.E., dated 9-72004 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 (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable on raw silk produced in India. Yarn manufactured from such silk is also exempt under Notification No. 30/2004 as no credit availed input is used to manufacture silk yarn. Therefore indigenous silk fabrics manufactured from indigenous silk yarn are exempt from Central Excise duty. Another stream in which silk fabrics get manufactured in India is using imported 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The aforesaid condition is to the effect that the importer should not have availed credit under rule 3 or rule 11 of the Cenvat 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 pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, we are unable to accept the Revenue's plea that the Apex Court decision of SRF Ltd. and M/s. Motiram Tolaram are in direct 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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