TMI Blog2023 (9) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that consideration of these factors is a necessary and legal requirement. Merely giving the details of only Bills of Entry may be of identical or similar goods would not be sufficient for legally rejecting the transaction value declared by the importer under Section 14 of the Customs Rules, 1962 - Merely by providing NIDB data where it is not clear whether the NIDB data value is declared or assessed (enhanced) value, the onus of providing reasonable evidence by the Revenue is not discharged, the Revenue has failed to discharge the onus of providing reliable evidence which rejecting the declared transaction value. Availability of Notification No. 30/2004-CE dated 09.07.2004 - HELD THAT:- The Hon ble Supreme Court in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT ] has held that the condition of non-availment of Cenvat credit on input/ capital goods need not be satisfied by the importer of such goods and therefore, we are of the view that appellant was entitled for exemption from CVD at the time of clearance of imported goods. The matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the rejection of transaction value merely on the ground that some of the contemporary imports of 100% polyester knitted fabrics have been assessed and cleared at the higher price than what has been declared by the appellant is legally not correct. It has been the contention of the learned Consultant that declared unit price of their consignments have varied between 115/kg. to Rs. 133/kg. CIF which is the true and correct transaction value. The department has taken the enhanced value i.e. 2.2USD to 2.8USD per Kgs. which comes to Rs. 148 to 182/kg which is absolutely arbitrarily without any support of legal provisions. It has further been submitted by the learned Consultant that for rejecting the transaction value under Section 14 of the Customs Act, 1962, the department has to show reasonable grounds why the declared transaction value is not being accepted. 3. It was the duty of the department to prove that transaction value declared by the appellant is not genuine, they have not advanced any cogent evidence to them. The only argument which has been advanced by the Adjudicating Authority is that the contemporary input unit price of the polyester knitted fabric of the similar go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiterated the findings given in the order-in-appeal. He has also relied upon the following decisions:- (a) Order No. A/85809/2018 dated 22.03.2018 Prashray Overseas Pvt. Limited vs. CC (Import) Nahva Sheva. (b) CC (Exports), Chennai vs. Prashray Overseas Pvt. Limited - 2016(338) ELT 44 (Mad.) (c) Status -Pending Prashray Overseas Pvt. Ltd. vs. Commissioner - 2017 (335) ELT A 151(SC) (d) Eagle Flask Industries Limited vs. Commr., CEX, Pune 2004 (171) ELT 296 (SC) 8. Having heard both the sides, we find that there are two issues which need to be addressed by us; (a) firstly, whether the Adjudicating Authority was right in rejecting the transaction value of the imported consignment covered in above mentioned appeals only on the basis of EDI data of purported contemporary input price without providing evidence to the appellant regarding comparable quantity, GSM, quality etc. or establishing that the contemporary higher price taken for assessment are actual transaction values declared by other importers or only enhanced prices as decided by the department at the time of assessment of referred bills of entry; and (b) the second issue is whether Notification No. 30/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellants. The Assessing Authority re-assessed the imported goods at values higher than what was declared by the Appellants in the Bills 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 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Rule 4(2) namely : (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 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 8 using reasonable means consistent with the principles and general 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), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e special to a particular customer and discounts available to 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 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation. - (1) For the removal of doubts, it is hereby declared 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemporaneous 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 show that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the phrase of appropriate duty . In this regard. Explanations have been inserted in the notifications No. 30/2004-C.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 SERVICE PVT. LTD Vs. COMMISSIONER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 9-7-2004 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of CVD, is to the following effect : 20. If no credit under rule 3 or rule 11 of the Cenvat Credit Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods. 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 cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted article is one which has been manufactured or produced, then it must be presumed, for the purpose of Section 3(1), that such an article can likewise be manufactured or produced in India. For the purpose of attracting additional 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrectly decided. In fact, by distinguishing the ratio of the said cases, the Constitution Bench impliedly gave its imprimatur to the principle laid down in the aforesaid judgments. 16 . In view of the above ruling by Apex 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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