Tribunal Rules in Favor of DCM Benetton on Customs Duty Assessment

The Tribunal ruled in favor of M/s. DCM Benetton India Ltd., holding that the assessable value of imported goods for levying Additional Customs Duty should be based on the transaction value rather than the tariff value fixed under Section 3(2) of the Central Excise Act. The Tribunal emphasized that the Customs Tariff Act does not authorize using the tariff value from the Central Excise Act for assessing additional customs duty, clarifying that the tariff value mentioned in the Customs Tariff Act pertains to values under the Customs Act. As a result, the Tribunal set aside the previous order and allowed all appeals by M/s. DCM Benetton India Ltd.

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Issues involved:
Determining assessable value of imported goods for levying Additional Customs Duty - Transaction value vs. tariff value fixed under Section 3(2) of the Central Excise Act.

Analysis:
The appeals filed by M/s. DCM Benetton India Ltd. revolve around the issue of whether the assessable value of imported goods for levying Additional Customs Duty should be the transaction value or the tariff value fixed under Section 3(2) of the Central Excise Act. The appellant, represented by Shri R. Parthasarathy, argued that the imported goods, ready-made garments and accessories imported in bulk from Nepal, should be assessed based on transaction value as they are imported in bulk and in unpacked condition. It was contended that Section 3(3) of the Customs Tariff Act does not specify that the tariff value under Section 3(2) of the Central Excise Act applies to goods imported from abroad.

In response, Mrs. Krishna A. Mishra, representing the respondent, referred to Notification 20/2001-C.E. (N.T.) where the Central Government fixed the tariff value for articles of apparel falling under specific headings of the Central Excise Tariff Act. The tariff value was set at 60% of the retail price declared on the retail packages under relevant laws. The appellant had declared the retail sale price of the goods in the Bills of entry during the relevant period.

The Tribunal, comprising S/Shri S.S. Kang and V.K. Agrawal, analyzed the legal provisions. Sub-section (2) of Section 3 of the Customs Tariff Act outlines the method for determining the value of imported articles for levying Additional Customs Duty. It states that the value shall be the aggregate of the value of the imported article determined under Section 14 of the Customs Act or the tariff value fixed under Section 14, along with any applicable customs duty and charges. The proviso to this subsection allows duty calculation based on maximum retail price for specified goods. Importantly, the Tribunal noted that Section 3 of the Customs Tariff Act does not authorize using the tariff value fixed under Section 3(2) of the Central Excise Act for assessing additional customs duty. The tariff value mentioned in the Customs Tariff Act refers to values fixed under the Customs Act, not the Central Excise Act. Consequently, the Tribunal set aside the impugned order and allowed all the appeals filed by M/s. DCM Benetton India Ltd.

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