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of <h1>Tribunal rules on customs duty assessment for importer, underscores importance of exchange rate</h1> <h3>FERTILIZERS & CHEMICALS TRAVANCORE LTD. Versus COMMR. OF CUS., COCHIN</h3> FERTILIZERS & CHEMICALS TRAVANCORE LTD. Versus COMMR. OF CUS., COCHIN - 2014 (300) E.L.T. 464 (Tri. - Bang.) Issues:- Assessment of Customs duty based on revised invoice value- Determination of assessable value for imported goods- Consideration of exchange rate for assessmentAssessment of Customs duty based on revised invoice value:The case involved the appellant, a Public Sector Undertaking, engaged in importing goods for manufacturing fertilizers and Caprolacum. The appellant imported goods through a canalising agency, and the department initiated proceedings to demand differential duty based on the revised invoice value provided by the canalising agency to the appellant. The appellant argued that the department should consider the original invoice value in USD at the time of filing the Bill of Entry for assessment purposes, as per Section 14 of the Customs Act, 1962. On the other hand, the department contended that the transaction between the canalising agency and the appellant was in Indian currency, and the value should be based on the revised invoice in Indian Rupees. The Tribunal examined the submissions and held that the assessable value should be determined based on the USD value at the time of filing the Bill of Entry, considering the exchange rate fluctuations and changes in the margin provided in the final invoice.Determination of assessable value for imported goods:The Tribunal analyzed a specific example provided by the appellant regarding a consignment named STOLT HELLULAND. The example illustrated that the value of the original invoice and final invoice in terms of USD remained the same, but the price changed in Indian Rupees due to exchange rate fluctuations and an increase in the margin. The Tribunal emphasized that the exchange rate for imports should be considered as on the date of filing the Bill of Entry. It further noted that the margin claimed by the canalising agency had increased compared to the original invoice, and this margin should be added to the assessable value calculated based on the exchange rate at the time of filing the Bill of Entry. Additionally, the Tribunal clarified that Insurance and LC Charges should also be added based on the USD value at the time of filing the Bill of Entry or the final invoice filing date if not available at the former.Consideration of exchange rate for assessment:In determining the assessable value, the Tribunal highlighted the importance of considering the exchange rate prevailing at the time of filing the Bill of Entry for imports. The Tribunal observed that the value in USD had not changed between the original and final invoices, indicating that the fluctuation in the Indian Rupee value was primarily due to exchange rate variations and changes in the margin. Therefore, the Tribunal concluded that the assessable value should be calculated based on the USD value at the time of filing the Bill of Entry, with adjustments for the margin, Insurance, and LC Charges based on the respective USD values at the relevant filing dates.In conclusion, the Tribunal disposed of the appeal in favor of the appellant, emphasizing the significance of determining the assessable value for imported goods based on the exchange rate at the time of filing the Bill of Entry and considering the relevant components such as margin, Insurance, and LC Charges in USD terms.
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