2000 (7) TMI 104 - AT - Customs

Customs Valuation: Transaction Value for High-Sea Sales Determined by Tribunal

The Tribunal, in the case concerning high-sea sales transactions, determined that the transaction value for customs duty assessment should be based on the ... Valuation (Customs) Issues involved: The determination of transaction value for customs duty assessment in high-sea sales basis transactions.Summary:1. The Tribunal considered the case of Godavari Fertilizers and Chemicals v. C.C., Visakhapatnam, where it was held that in high-sea sales transactions, the transaction value for customs duty assessment should be based on the revised invoice value submitted by the canalising agency to the importers. 2. The issue of whether the prices paid by the canalising agency to the foreign supplier or the price charged by the canalising agency from its buyer on high-sea sales basis should be considered as the transaction value for customs valuation was deliberated. The Tribunal observed that the transaction between the canalising agency and the buyer at the time of high-sea sales is the relevant transaction for customs valuation under Rule 4 of the Customs Valuation Rules, 1988. The Tribunal referred the case to a Larger Bench for further consideration.3. The matter was brought before the Larger Bench, where arguments were presented by the appellant and the Revenue. The Tribunal noted that the issue had been resolved by a Supreme Court judgment in the case of Hyderabad Industries Ltd. v. Union of India, which held that service charges payable to the canalising agency for importation of goods should be included in the assessable value of imports as per the Customs Act and Customs Valuation Rules, 1988. The Tribunal upheld the Supreme Court's decision and dismissed the appeals.4. The Tribunal emphasized that the issue referred to the Larger Bench was a pure question of law, which had been conclusively addressed by the Supreme Court judgment. The Tribunal held that the transaction value between the canalising agency and the appellant should be considered for customs valuation purposes, affirming the decision in the Godavari Fertilizers and Chemicals Ltd. case.5. Consequently, the Tribunal concluded that the transaction value between the canalising agency and the appellant is the relevant value for customs valuation under Rule 4 of the Customs Valuation Rules, 1988. The reference was answered accordingly, and the cases were to be returned to the original Bench for final orders on the appeals.