TaxTMI 
TaxTMI 
TaxTMI 
2003 (7) TMI 423
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....a letter dated 28-6-2002 averred that the price declared in B/E was true and in consonance with the contemporaneous price and also that it was as per the contract with the supplier, and also requested for finalizing the assessment on the basis of the declared price. 4. A Show Cause Notice Nos. S/20-55/2002, dated 5-7-2002 was also issued on the importer seeking enhancement of the declared value to 325 USD PMT and consequent recovery of the differential duty of Rs. 7,60,750/-. 5. In the defence reply dated 12-7-2002 the importer has contended that the goods are of Iran origin and have been shipped from that country; that the contract has been for bulk quantity of 5,000 MTs. while the contemporaneous price sought to be applied relates to a small quantity of 100 to 200 MTs; that the referred price also includes interest at 2% which does not exist in the case of the importerd goods and goods originating from developing country like Iran cannot be compared with Singapore, which is a developed country. The importer finally requested for acceptance of the declared value and setting aside of the notice. 6. The Adjudicating Authority vide Order-in-Original No. KDL/JC-II/SK....
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....pellant filed an appeal and a stay application. The grounds of appeal in short are as under :- (i) The impugned order has placed reliance on the case law in the case of Plast Fab and Rajkumar Knitting Mills Pvt. Ltd., which are not applicable to the facts and circumstances of the appellant's case. (ii) The Lower Authority failed to appreciate that the sales contract entered into with the supplier was duly registered with the Custom House. Hence, the Customs Authorities were aware that the price entered into was the actual transaction value payable pursuant to negotiations and the total contract was for a quantity of 5,000 MT +/- 5%. As a result of sales contract for a total quantity of 5,000 MT, part quantity of 1,000 MT came to be supplied under the contract to the appellant. (iii) Reliance is placed on the following decisions of various Courts - (a) Eicher Tractor Ltd. v. CC reported in 2000 (122) E.L.T. 321 (b) Mirah Exports v. CC reported in 1998 (98) E.L.T. 3 (S.C.) (c) &....
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.... not in ordinary course of trade under fully competitive condition. The Department has not produced any evidence that any other importer has imported identical or similar goods from Iran. It is also not effected by Clause (b) of the Rule 4(2) as there is no abnormal discount considering the huge quantity contracted by the appellant and the slight variation of value to the tune of only 10% to 15%. It is also not covered under other provisions of Rule 4(2) of the Valuation Rules, 1988. The appellant's bona fide can be observed by his Act of Registering the Contract before Kandla Customs prior to the import of the goods. 12. The reliance of the Adjudicating Authority on Plast Fab case reported in 1993 (66) E.L.T. 441 and Rajkumar Knitting Mills Pvt. Ltd. reported in 1996 (98) E.L.T. 292 is misplaced. In Plast Fab, the value declared US $ 950 PMT and the comparable invoice was of US $ 1,675 PMT. Further, in that case also the Hon'ble Tribunal has remanded the matter to the Adjudicating Authority to ascertain regarding applicability of Rules 5, 6, 7 and 8. In the Rajkumar Knitting, similar goods were imported by another person and supplied by the same supplier at the relevant time....
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....ty of interest proved by the lower authority between the supplier and the appellant, Rule 4 of the Valuation Rules, is the only rule which is applicable in the present case. DISCUSSION AND FINDINGS 15. I have carefully gone through the case records, grounds of appeal and submissions made at the time of personal hearing. In the Show Cause Notice, the reason for rejecting the price is given as - (a) that the price declared by the appellant is much less than compared to contemporaneous import and hence rejectable under Rule 10A of the Valuation Rules, 1988; and (b) the sale does not appear to be under fully competitive conditions. However, these issues have not been dealt with by the Adjudicating Authority. 16. The Adjudicating Authority has directly jumped to Rule 11 of the Valuation Rules and the first contention of the appellant is that the Adjudicating Authority has wrongly applied Rule 11 of the Valuation Rules, 1988 for arriving at the assessable value. Rule 11 of the Valuation Rules, 1988 is reproduced - "11. Settlement of dispute. - In case of dispute between the im....
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....l level and in substantially the same quantity as the goods being valued shall be used to determine the value of imported goods. (c) N.A. (2) N.A. (3) N.A. 6. Transaction value of similar goods. - (1) Subject to the provisions of Rule 3 of these rules, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as the goods being valued. (2) The provisions of clauses (b) and (c) of sub-rule (1), sub-rule (2) and sub-rule (3), of Rule 5 of these rules shall, mutatis mutandis, also apply in respect of similar goods." 20. These two rules talk of identical and similar goods. Identical and similar goods have been defined in Rule 2 of the Valuation Rules, 1988. One of the conditions of goods being identical or similar is that the country of origin should be the same. In this case, the country of origin of the impugned goods and the goods of the relied upon import are admittedly different. 21. Rule 7 talks of deductive method, which cannot be applied in the instant case. The only Rule, which appears to be applicable, is Rule 8 of the Valuation Rules, 1988. The same is reproduced....
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....e ordinary course under fully competitive condition. For proving this, the minimal evidence required was substantial difference in invoices for goods originating from the same country. The department has also not produced any evidence that the Toluene of Iranian origin was sold to any other importer either in this country or in any other country at a price substantially higher than the price charged to the appellant. 24. There is no doubt that the transaction value can be rejected, if the declared price is ridiculously low or unrealistic as has been held by the Hon'ble Supreme Court in the case of Shibani Engineering Systems reported in 1996 (86) E.L.T. 453 (S.C.). However, in the instant case, it cannot be said that the price is ridiculously low or unrealistic. In fact, the same is comparable with not only the PLATT prices, but also the relied upon invoice. 25. As rightly pointed out by the appellant, the decisions in the case of Plast Fab and Rajkumar Knitting Mills (supra) are not applicable in this case. Para 25 of the decision in Plast Fab is reproduced - "25. It is seen that after having held that the declared value or the price paid for the goods could not ....