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of <h1>Tribunal Upholds Transaction Value in Customs Case</h1> The Tribunal upheld the acceptance of the declared transaction value by the respondent, M/s. Nirma Ltd., in the case involving under-valuation of Normal ... Valuation - Multiple transaction value Issues Involved:1. Under-valuation and duty on the differential value.2. Acceptance of transaction value under Section 14 of the Customs Act, 1962.3. Applicability of pricing formula in long-term supply agreements.4. Relevance of contemporaneous import values and special circumstances.Summary:Issue 1: Under-valuation and Duty on Differential ValueThe revenue appealed against the Commissioner (Appeals) order, alleging under-valuation of Normal Paraffin imported by M/s. Nirma Ltd. The goods were provisionally assessed and released against PD Bond/B.G. u/s 18 of the Customs Act, 1962. The declared value was lower compared to contemporary values, leading to a show cause notice and subsequent adjudication finalizing the assessment at an enhanced value of US $500 PMT.Issue 2: Acceptance of Transaction Value u/s 14 of the Customs Act, 1962The respondent argued that the declared value should be accepted as per the long-term supply agreement with M/s. Condea Augusta, Italy, which included a pricing formula. The lower Appellate authority relied on the Apex Court judgment in Eicher Tractor Ltd., which mandates acceptance of declared value in the absence of special circumstances. The department admitted that the pricing formula was not disputed.Issue 3: Applicability of Pricing Formula in Long-term Supply AgreementsThe respondent's pricing formula was based on quarterly variations in kerosene and fuel oil prices. The department's comparison with other imports was flawed as it did not consider identical conditions. The Tribunal noted that the respondent's declared values ranged from US $350 PMT to US $555 PMT, justifying the declared transaction value of US $372 PMT to US $445 PMT.Issue 4: Relevance of Contemporaneous Import Values and Special CircumstancesThe Tribunal found no evidence of special circumstances or contemporaneous values from identical conditions to justify rejecting the declared value. The department's reliance on higher values from different suppliers and countries was not valid. The Tribunal upheld the acceptance of the declared transaction value, citing the Apex Court's ruling in Eicher Tractor Ltd. and rejecting the department's appeal.Conclusion:The Tribunal concluded that the declared transaction value must be accepted in the absence of special circumstances, as per Section 14(1) of the Customs Act, 1962, and relevant case laws. The department's appeal was rejected, affirming the respondent's declared value based on the long-term supply agreement and pricing formula.
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