TaxTMI 
TaxTMI 
2018 (10) TMI 412
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....ed and another wherein the said value has been bifurcated in two components i.e. Free on Board (F.O.B.) and Air Freight. It was alleged that the importer was showing only C & F value of imported goods in their Bill of Entries filed by them in respect of such imports whereas, as per the invoice of the supplier, the FOB value and Air Freight were indicated separately. Resultantly, a show causer notice dated 13.02.2013 was served upon them alleging that the value of consignment has been mis-declared with intent to evade the customs duties and the demand for the said difference was proposed along with the appropriate interest and the penalties not only upon the importing company but upon the Directors thereof, as well. The said show cause notice was initially adjudicated vide Order-in-Original No.10/15 dated 28.04.2015 vide which the proposed demand was confirmed. Being aggrieved, an appeal before Commissioner (Appeals) was filed, who vide the impugned order has upheld the said decision. Being aggrieved, the appeals in hand have been filed. 3. We have heard Mr. S.C. Jain, ld Counsel for the appellant and Mr. Rakesh Kumar & Mr. Sunil Kumar, ld. DRs for the Department. 4. It is sub....
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....air freight whereas in remaining 45 invoices said bifurcation of C & F value was not mentioned. From the order under challenge, it is clear that in the given circumstance, Department formed a view that since the goods have been imported by air, hence, the airfreight amount should have been 20% of FOB value even for those invoices where the C & F value does not show any bifurcation, the proviso to Rule 10 (2) of Customs Valuation Rules, has been impressed upon while issuing the impugned show cause notice. The adjudicating authority further observed it to be an admitted fact that all the consignments have been imported on C & F basis irrespective the invoices have bifurcated the C & F value or not. 6.2. The moot questions for consideration therefore, are: (1) whether the appellant was to discharge the liability on the said C & F amount only. (2) Whether the freight irrespective mentioned separately or not, should be considered at the rate of 20% of FOB value while discharging the liability. 6.3. For the purpose it is important to look into these statutory provisions. Section 14 of Customs Act, 1962 is about valuation of goods. It reads as follows:- "SECTION 14. Valuati....
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....ring, development, art work, design work, and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods; (c) royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; (d) The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller; (e) all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable. Explanation.- Where the royalty, licence fee or any other payment for a process, whether patented or otherwise, is includible referred to in clauses (c) and (e), such charges shall be added to the price actually paid or payable for the imported goods, notwithstanding the fact that such goods may be subjected to t....
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....of the imported goods except as provided for in this rule. 7. Bare perusal of these provisions makes it clear that the value of imported goods shall be the transaction value of such goods i.e. the price which is actually paid or is payable at the time of import with any other amount as mentioned in the proviso to Section 14 above to be added to the said transaction value. Further perusal of Rule 10(2)(c) (i) it details such costs which have to be included while assessing the cost of transport. Rule 10(2) (c) (iii) makes it clear that such cost has also to include the insurance value of 1.125% of FOB value of the goods. It is an admitted case that the said value has been added by the appellant while computing the cost of transport of imported goods herein. 8. The proviso to this Rule is actually relevant for adjudication of the impugned controversy. Perusal makes it clear that two different conditions are discussed in this proviso (1) where the cost of transport of imported goods is ascertainable, Such cost shall not exceed 20% of free on board value of the goods. Another where this value is not ascertainable, it shall be 20% of free on board value of goods plus cost of insura....