TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 177
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion in the said appeal are as follows :- 2.1 The importer M/s. Bharati Rubber Lining & Allied Services Pvt. Ltd., Thane filed a bill of entry No. 747223 dated 19-2-2006 for import of 126 MT of aluminium scrap of grade "Twang" and declaring a value of US $ 1639 per MT. The assessment was done provisionally under bond pending determination of value and submission of documentary evidence by the importer in support of the claim of the declared value. However, in spite of the expiry of time-period of the bond, the importer did not submit the letter of credit or other documentary evidence in support of the declared value. On carrying out a detailed study of the imports of similar commodities, it was noticed that the contemporaneous price of the said scrap approximated to or higher than the declared value. It was further observed that there was a steep increase of prime metal prices in the international market during the contemporaneous period. The London Metal Exchange (LME) price on the date of filing the bill of entry was noticed higher than the declared value. Therefore, a show cause notice dated 30-5-2008 was issued to the importer rejecting the value declared under Rule 10A o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the personal hearing, the show cause notice was adjudicated ex parte. 2.3 The adjudicating authority observed that metal scrap is a unique commodity and is collected from different materials and sources before being sorted into different types and grades. The procurement is either for stock and sale or it is procured immediately after receipt of orders from buyers. Different methods of sorting are resorted to. Metal scrap is not a branded manufactured product but a waste/bye-product generated during the course of manufacturing and the price of the scrap is dependent on various factors. Metallic content in the scrap affects the price of scrap and the country of origin, port of shipment and the supplier become immaterial in pricing and rather the metallic content and the impurities in the scrap influence the price/negotiations of valuation purpose in the case of scrap. Therefore, he came to the conclusion the value of the scrap in the present case cannot be determined under Rules 5 to 7A of the CVR and the value has to be determined under Rule 8. He then relied on the Directorate General of Valuation Alert Circular No. 14/2005 dated 16-12-2005 which stated that the value of alu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s involved in each relevant case which has not been done in the instant case. He noted that the principle of determining truth and accuracy under Rule 10A on case to case basis equally applies to the determination of value under Rule 8. Accordingly, he held that summary rejection of the transaction value and following arbitrary method of valuation under Rule 8 cannot be justified. He also found that, as per the show cause notice the contemporaneous price of the scrap approximates to or higher than the declared value and therefore, as per the provisions of Rule 6(2) read with Rule 5(3), the lower of such values had to be adopted to arrive at the transaction value and in a case the contemporaneous imports approximate the value of the goods declared, the question of re-determination may not arise at all. The appellate authority also noted that the impugned order has been passed mechanically without verification of the facts and records of the case and the orders have been passed without even disclosing the number and date of the Bills of Entry pertaining to individual order-in-originals. The impugned order also failed to take into account the defence replies, the correspondences, reli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ating authority to decide the matter afresh after following the principles of natural justice. 4. The learned advocates for the appellants submits that the learned appellate authority has passed a very detailed order rebutting each and every point made in the order of the assessing officer and the findings made by the lower appellate authority are supported by various decisions of the Hon'ble Apex Court and of this Tribunal in similar situations. Therefore, the findings of the lower appellate authority are correct in law and hence, the said order has to be sustained on all counts. 5. We have carefully considered the rival submissions and perused the records and also the submissions made by both the sides. 5.1 We notice that there has been denial of natural justice inasmuch as the submissions made by the importer in reply to the show cause notices have not been considered in many cases. A sweeping statement has been made saying that the appellants did not reply to the show cause notices nor did they avail opportunities of personal hearing whereas the fact remains that in a number of cases, the appellants have filed replies to the show cause notices and also request....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstructions on the subject matter. The Hon'ble Apex Court in the said case held as follows : "The valuation of the imported goods where the transaction value in the opinion of Assessing Authority is liable to be rejected because of invoice manipulation or under-invoicing or un-realistic price or misdeclaration in respect of valuation of goods or description or where transaction value of the goods declared is ridiculously low, which of course the Assessing Authority has to justify, he must proceed to determine valuation of goods by following Customs Valuation Rules. The availability of evidence of contemporaneous import of the same goods obviously provides the best guide for determination of value of the import of goods but in the absence of evidence of contemporaneous import, reference to foreign journal for finding out correct international price of imported goods may not be irrelevant." 5.5 In the instant case, the proposition in the show cause notice is that the value of the contemporaneous imports indicated a higher price. If that be so, that should have been the starting point for determination of value of the imported goods and not some other basis. Further even when w....