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of <h1>Appellate Tribunal Confirms Superior Quality of Exported Rotomac Pens, Rejects Revenue's Overvaluation Claims.</h1> <h3>Commissioner Of Customs Versus Pgy Associates And Frost International</h3> Commissioner Of Customs Versus Pgy Associates And Frost International - TMI Issues:Challenge to the valuation of Rotomac ball pens under export by the Revenue.Analysis:The Revenue challenged the order of the Commissioner of Customs, Mumbai, regarding the valuation of Rotomac ball pens under export, alleging overvaluation by the exporters. The exporters, M/s. Frost International and M/s. PGY Associates, Kanpur, declared the FOB price per pen at Rs. 8.12, while the market value was declared as Rs. 8.93 per pen. Upon examination, it was revealed that the actual cost of the Rotomac ball pens was Rs. 4.30 per piece. Show cause notices were issued to the exporters for overvaluation, proposing confiscation of pens, penal action, and restricting drawback claims based on a lower price of Rs. 1.97 per pen. The Commissioner, after considering evidence from the exporters, concluded that the pens under export were different from those available in the local market, accepted the declared value of Rs. 6 per piece, and dropped the proceedings initiated by the show cause notices. The Revenue appealed this decision.The grounds of appeal by the Revenue included discrepancies in the model number and retail price of the pens, the export price to Bahrain, and the lack of specifications in the contract with the buyer in Moscow regarding the quality of the pens. The Revenue argued that the exporters failed to provide evidence, such as test reports, to differentiate the export pens from those available locally or exported to Bahrain. However, the Commissioner had already considered these aspects and made detailed findings. The Commissioner noted that the exporters had purchased the export consignment at Rs. 6 per piece from the manufacturer, M/s. Rotomac Pens Pvt. Ltd., for export to Russia/CIS countries, specifically designed to withstand sub-zero temperatures. Various documents, including a memorandum of understanding, purchase invoices, and certificates, were submitted by the exporters to support their claim of superior quality and material difference in the export pens. The Commissioner found merit in the defense arguments and upheld the transaction value of Rs. 6 per piece, considering additional overheads incurred by the exporters. The Commissioner's findings were deemed valid, and the appeal by the Revenue was rejected.In conclusion, the Appellate Tribunal concurred with the Commissioner's decision to accept the transaction value of Rs. 6 per pen, considering the evidence presented by the exporters regarding the superior quality and material difference of the pens under export. The Tribunal upheld the Commissioner's order, rejecting the Revenue's appeal challenging the valuation of the Rotomac ball pens under export.
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