TMI Blog2024 (4) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, it does not provide for inclusion of commissions in case of exports. The Customs Export Valuation Rules do not provide for addition of any amount to the negotiated price (Transaction Value) or any reduction from it where the parties are not related and the price is at arm s length. If the transaction value has to be determined as per the contract based on the test report of CIQ, it has to be determined so. The test report by CRCL is not relevant to determining the transaction value. It is not for the department to substitute the requirement of test report of CIQ in the contract between the importer and its overseas supplier with the test report of CRCL. The export price is the transaction value subject to adjustment as per the clause in the contract between the parties. It is also found that it is not the case of Revenue that the appellant received anything over and above the transaction value or the amount mentioned in the final invoice on the basis of test report i.e. certification of quantity and quality at the discharge port, on the basis of report of the mutually agreed laboratory. Reduction of US$16 per MT from the invoice - HELD THAT:- Any compensation paid for any pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hsSixteen Thousand and Fifty Nine only) from M/s Terapanth Foods Ltd. c) I demand interest at applicable rates on the amounts mentioned at (b) above, under Section 18(3) of the Customs Act, 1962. d) I confirm the demand of Customs Duty of Rs. 19,06,508 (Rupees Nineteen Lakhs Six Thousand Five Hundred and Eight only) being the export duty short paid in respect of Shipping Bill No. 312/10-11 in terms of Section 28 of the Customs Act, 1962, by adopting the actual transaction value of the said goods, in terms of Rule 3(1) of the Customs Valuation (Determination of Price of Exported Goods) Rules, 2007 read with Rule 2(1)(b) ibid and sub-section (1) of Section 14 of the Customs Act, 1962. e) I demand interest on the amount mentioned at (d) above, from the first day of the month succeeding the month in which the said duty ought to have been paid till the actual date of payment, at applicable rates under Section 28AA of the Customs Act, 1962. f) I impose a penalty equivalent to differential customs duty of Rs. 19,06,508/- (Rupees Nineteen Lakhs Six Thousand Five Hundred and Eight only) demanded at para (d) above, plus interest up to the date of payment under Section 114A of the Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urities based on the test report of a testing agency viz., CIQ, China. CFR (also known as C F) is one of the standard agreements of trade where the price includes the cost of the goods as well as the cost of the freight upto the port indicated therein, but not the transit insurance. 5. Appellants filed Shipping Bill No. 312/2010-11 for quantity of 49000 WMT. Appellants paid customs duty of Rs. 94,86,065/- and provisional assessment was done after Appellants furnished the provisional duty bond and undertaking. At the port of discharge Quality Certificate and Inspection certificate were issued by Entry-Exit Inspection and Quarantine of the People s Republic of China, certifying FE content 60.40% and moisture 4.47% WMT 48,932 and 46,744.740 DMT. 6. Final Commercial Invoice No. TFL/IRON/EXP/001- FINAL issued by Appellants for WMT 48,932 and 46,744.740 DMT actual for amount of USD 532,89,036 after making price adjustment as per the FE content. Penalty of USD 84,140.53 was deducted. Thus, final invoice price came to USD 52,44,759.83. 7. Deputy Commissioner of Customs, Krishnapatnam port issued a Demand Cum Show Cause Notice demanding customs duty of Rs. 15,37,208/- considering the FE con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Rules, 2007 the value of export goods shall be transaction value. (vi) No such exercise about transaction value of goods of like kind and quality has been made as required under Rule 4. Appellants relied upon this Tribunal judgment in the case of CC(Export), Goa, Vs VGM Exports reported in [2013 (291) ELT 572 (Tri-Mum)]. (vii) That the declared value of USD 114 is supported by contract entered with M/s Swiss Singapore Overseas Pvt Ltd., (viii) There is no independent evidence other than statement of Shri Babulal Singhvi in support of the charge that the actual transaction value should be 130 USD and not 114 USD (ix) Penalty for FE content being less i.e. 60.40 PCT instead of 61.00 PCT basis, has to be deducted as per the contract. (x) Appellants produced a detailed worksheet as TFL-1 to TFL-4 calculating the differential duty, if any payable. (xi) Transaction value should be considered as cum duty export price. (xii) Appellants relied upon Hon ble Calcutta High Court judgment in the case of Bird And Co. (Pvt.) Ltd., Vs Kalyan Kumar Sen Gupta reported in [1988 (37) ELT 70 (Cal)] and that Appellants have paid excess duty of Rs. 6,31,88,052/- and if FOB price is considered as cum du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 15 in the contract entered with the buyer which categorically provided that for determination of moisture content and consequently iron ore content testing has to be at 105 Degree C. And the final Dry weight shall be calculated by deducting the final free moisture content as aforesaid from the final wet weight and the weight thus determined shall be the basis for final invoice. 13.2 The Ld. Commissioner ignored the case laws cited regarding re-testing as held in Alpine International Vs CC, Mangalore reported in [2008 (224) ELT 331 (Tri-Bang)] and in the case of Taurion Iron Steel Co. Pvt Ltd., Vs CCE, Visakhapatnam [2009 (241) ELT 390 (Tri-Bang)]. 13.3 The Ld. Commissioner has erred in relying upon chemical examiner s report when in the Appellants case export duty was charged on transaction value and the transaction value is agreed as per the purchase contract based on specification or test carried out in accordance with the certain agreed norms and when the chemical examiner did not carry out the test as per the norms prescribed in the purchase contract. 13.4 The Ld. Commissioner has erred in holding in Para 24.1 that transaction value is USD 130 per DMT, based on the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by vessel M.V. Nava Eliza. The buyer had demanded compensation USD 20 PDMT, but the same was negotiated and settled at USD 16 PDMT which was adjusted by using the price of the present export cargo despatched vide M.V. Alcyone, vide Shipping Bill No. 312/2010-11 dated 18.06.2010. Thus, as the export price is a negotiated price the same is the transaction value and the same being business like and the parties being not related has to be given credence and acceptance. Learned Counsel relies on the ruling of Bangalore Bench of this Tribunal in the case of M/s Solaris Chemtech Industries Ltd., Vs CCE ST, Mangalore Final Order No. 21284-21286/2019 dated 20.12.2019. 16. It is further urged in the present shipment there is no evidence of contemporary export price for similar and identical export of goods to show that the export price of USD 114 PDMT was less than contemporary export price for similar/identical goods exported at the same point of time. Further, there is no allegation that the foreign buyer paid any excess amount other than billed in the final invoice by the appellants. 17. Accordingly, the appellants prays for allowing appeals and setting aside the impugned order. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modified by the Customs based on the test report of the chemical examiner of CRCL when the price should be finalised as per the test report of CIQ as per the agreement between the buyer and seller? b) Can the US$ 10 per MT be added as additional consideration for sale in the case? 22. Duties of Customs are levied on the goods imported into India or exported from India as per section 12 of the Customs Act, 1962 Act at the rates specified in the schedules to the Customs Tariff Act, 1975. These duties can be based on quantity (specific rate of duty) or value (ad valorem rates of duty). If duties are to be levied on the value, such value shall be determined as per section 14 of the Act and the Valuation Rules. Section 14 reads as follows: 14. 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule. 25. We find that the Customs Export Valuation Rules do not provide for addition of any amount to the negotiated price (Transaction Value) or any reduction from it where the parties are not related and the price is at arm s length. If the transaction value has to be determined as per the contract based on the test report of CIQ, it has to be determined so. The test report by CRCL is not relevant to determining the transaction value. It is not for the department to substitute the requirement of test report of CIQ in the contract between the importer and its overseas supplier with the test report of CRCL. 26. Accordingly, we hold that the export price is the transaction value subject to adjustment as per the clause in the contract between the parties. We also find that it is not the case of Revenue that the appellant received anything over and above the transaction value or the amount mentioned in the final invoice on the basis of test report i.e. certification of quantity and quality at the discharge port, on the basis of report of the mutually agreed labo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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