TMI Blog2023 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar goods as defined under Rule 2(d) 2(f) respectively - The provisions of rule 2(d) and rule 2(f) have been considered in a recent decision of the Tribunal in the case of HARIPRIYA TRADERS, FIRDOUSE INTERNATIONAL TRADING COMPANY, SHABEER ENTERPRISES, MOHAMMED FARIZ AND CO., PK TRADERS, KEVEEYAM COMPANY SUPARIWALA PVT LTD VERSUS C.C. COCHIN-CUS [ 2022 (7) TMI 1126 - CESTAT BANGALORE] , where the test of quality assessment was referred for ascertaining the nature of goods under comparison - Applying the ratio of the aforesaid decision, it is found that no such case have been pleaded by the revenue and hence no reliance can be placed on contemporaneous imports by merely providing the copies of some bill of entries. The adjudicating authority noted in its order that as per NIDB import data, there are no identical goods available for determination of value as per Rule 4 of CVR, 2007. In view of such findings, it is opined that the transaction value has to be adopted as the correct value and rejection thereof is contradictory and unsustainable. The Commissioner (Appeals) has referred to the decision of the Apex Court in CENTURY METAL RECYCLING PVT. LTD. AND ANOTHER VERSUS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Department is dismissed and the consequential relief, if any in favour of the respondent is allowed. - Customs Appeal No. 51287 of 2023-SM - FINAL ORDER NO. 50969 / 2023 - Dated:- 31-7-2023 - HON BLE MS. BINU TAMTA , MEMBER ( JUDICIAL ) Sh. Mahesh Bhardwaj , Authorised Representative for the appellant Sh. Randhir Singh , Advocate for the respondent ORDER BINU TAMTA : This is an appeal filed by the Revenue challenging the Order-in-appeal No. 120(SM)/CUS/JPR/2022 Dated 29.07.2022 whereby the appeal filed by the respondent/importer was allowed and the Order-in-original was set aside. 2. The facts of the present case in short are that the respondent/importer had filed three bills of entry dated 27.01.2021 for clearance of imported goods Zinc Scrap, Saves/Scope which were imported from M/s Olympic Metal, Miami, USA. As the Department noticed that the declared value of the goods was lower than the contemporaneous import of similar goods and that the sale involved an abnormal discount and abnormal rejection from ordinary competitive prices, a query was raised from the importer to provide material/evidence to justify the declared value in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated under the rules. 7. The provisions of Section 14 of the Customs Act, 1962 and the Rules made thereunder for determination of value of imported goods have been interpreted and settled in various decisions by the Higher Courts as well as by this Tribunal. Before examining the issue, it is relevant to extract the provisions of Section 14 of the Customs Act and the relevant rules of CVR, 2007:- Section 14 of Valuation of goods.- (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export 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 to India for delivery at the time and place of importation, or as the case may be, 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 subject to such other conditions as may be specified in the rules made in this behalf: Provided that such transaction value in the case of imported goods shall include, in addition to the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that (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 affect the value of the goods; (b) the sale or price is not subject to some 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 10 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) below. (3) (a) Where the buyer and seller are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment leads to an increase or decrease in the value. (2) Where the costs and charges referred to in sub-rule (2) of rule 10 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods. 8. The first step in considering the issue of rejection of the declared value and undervaluation is whether the Revenue has produced cogent reasons for disallowing or rejecting the transaction value. In the present case, the Revenue has given instances of contemporaneous import by giving the details of bills of entry as noted by the adjudicating authority, which is quoted below:- BE Number Bill of Entry date Description Custom House Quantity Unit quantity code Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The next step is to determine the nature of the goods which are the subject matter of the contemporaneous imports as to whether they are identical goods or similar goods as defined under Rule 2(d) 2(f) respectively. The definition of identical goods in rule 2(d) definition of similar goods in rule 2(f) are as follows:- (d) identical goods means imported goods (i) which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods; (ii) produced in the country in which the goods being valued were produced; and (iii) produced by the same person who produced the goods, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods; --- ----- ---- (f) similar goods means imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we find that Rule 4 (1) (b), (c), 4(2) and 4(3) also speaks about applicability of this rule in cases of identical goods in a sale/or not and its cost component, at the same commercial level and in substantially the same quantity. We have already discussed in the foregoing paragraphs and found that identical nature of the goods, compared in this case, are not proved in the manner established under law and therefore applicability of this rule and sub rule mutatis mutandis to Rule 5 also fails. Applying the ratio of the aforesaid decision, I find that no such case have been pleaded by the revenue and hence no reliance can be placed on contemporaneous imports by merely providing the copies of some bill of entries. 10. I find that the adjudicating authority noted in its order that as per NIDB import data, there are no identical goods available for determination of value as per Rule 4 of CVR, 2007. In view of such findings, I am of the opinion that the transaction value has to be adopted as the correct value and rejection thereof is contradictory and unsustainable. The Commissioner (Appeals) has referred to the decision of the Apex Court in Century Metal Recycling Pvt. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neous in the present factual matrix. 11. The concept of transaction value has been provided under Rule 4 of CVR, 2007 which makes it mandatory for the authorities to accept the transaction value as provided by the importer, however the same can be rejected subject to the conditions/ exceptions as specified therein. Here it is not the case of the revenue that the transaction under consideration is covered under any of the exceptions and therefore the transaction value declared by the importer is not acceptable. No allegation has been made that the transaction was tainted or was not at arms length. No evidence has been led by the Revenue that undervaluation was on account of the circumstances mentioned in the Rules, referred above, I am therefore of the considered view that since the present case does not fall under the exceptions provided in the Rules there is no scope to reject the transaction value. Reliance is placed on the decisions of the Supreme Court in Eicher Tractors Ltd vs. Commissioner of Customs, Mumbai 2000 (122) ELT 321, Choudhry Ship Breakers vs. Commissioner of Customs, Ahmedabad 2010 (259) ELT 161, Commissioner of Customs Vishakapatnam vs. Aggarwal Industries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assess the duty on the transaction value. ---- ---- 12. Rule 4(1) speaks of the transaction value. Utilisation of the definite article indicates that what should be accepted as the value for the purpose of assessment to customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4(2). Payable in the context of the language of Rule 4(1) must, therefore, be read as referring to the particular transaction and payability in respect of the transaction envisages a situation where payment of price may be deferred. --- ----- ----- 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. Later, in Choudhry Ship Breakers vs. Commissioner of Customs, Ahmedabad (supra) the Court observed: 15. According to Section 14(1) of the Act, assessment of cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the relevant rules and subject to the provisions of Section 14(1) of the Act. Conjointly read, both Section 14(1) of the Act and Rule 4 of CVR, 1988 provide that in the absence of any of the special circumstances indicated in Section 14(1) of the Act and particularized in Rule 4(2) of CVR 1988, the price paid or payable by the importer to the vendor, in the ordinary course of international trade and commerce, shall be taken to be the transaction value. In other words, save and except for the circumstances mentioned in proviso to Sub-rule (2) of Rule 4, the invoice price is to form the basis for determination of the transaction value. Nevertheless, if on the basis of some contemporaneous evidence, the revenue is able to demonstrate that the invoice does not reflect the correct price, it would be justified in rejecting the invoice price and determine the transaction value in accordance with the procedure laid down in CVR, 1988. It needs little emphasis that before rejecting the transaction value declared by the importer as incorrect or unacceptable, the revenue has to bring on record cogent material to show that contemporaneous imports, which obviously would include th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (134) ELT 791. The relevant para of the judgement is quoted herein:- 5. We, further, observe that after this observation made by the Bench, the Revenue has only produced a Bill of Entry dated 8-12-1999 showing the price of U.S. $ 5900 per M.T. but this import cannot be considered to be import of identical goods under Rule 5 of the Customs Valuation Rules. For applying the value of identical goods these must be imported at or about the same time as the goods being valued and the value of identical goods should be in a sale at the same commercial level and in substantially the same quantity as the goods being valued. The learned Advocate for the Appellants has correctly emphasised that the quantity imported under the said Bill of Entry is only 4.2 M.T. as against the import of 20 M.T. by them and the goods have been purchased from Singapore whereas the Appellants have purchased the goods from 1st stage dealer in Japan itself. We are, therefore, of the view that the said Bill of Entry dated 8-12-99 cannot be relied upon to determine the assessable value of the imported goods as both the quantity and place of import are different. The Supreme Court in the case of Mirah Exports (P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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