TaxTMI 
TaxTMI 
2019 (1) TMI 1047
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...., Ukraine in the month of May, 2009 for import of two consignments of Hot Rolled Coils (HR Coils) and two bills of entry were filed on 25.8.2009 and 29.7.2009 respectively for clearing two consignments of HR Coils at declared price of US $ 400 per MT and US $ 385 per MT respectively. The adjudicating authority doubted the import value declared by the respondent and granted personal hearing to the respondent. The goods were cleared on the basis of provisional assessments. The Appellant appeared before the adjudicating authority and made their submissions. According to the adjudicating authority since the value of similar goods is available therefore he proceeded to re-determine the value of M.S. Coils in terms of Rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007[hereinafter referred to as the Customs Valuation Rules, 2007]. On the basis of date of contemporaneous import of HR Steel Plates [which according to the Adjudicating authority is similar goods], the Adjudicating Authority vide Order-in-Assessment dated 3.11.2009 rejected the declared value and direct the assessment at the unit price of USD 460 PMT. On Appeal filed by the respondent herein, th....
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....om India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf : Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf : Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, wh....
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....t the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared valu....
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....er to proceed with the re-assessment, after due enhancement. Explanation (1)(i)(iii)(a) in Rule 12 appears to have applied by the adjudicating authority in the present case. As per case records, the assessing officer having noticed higher value of contemporaneous import of HR Steel Plates, raised the doubt regarding the correctness of declared value. The legal provisions mentioned in the Explanation clearly stipulates that the contemporaneous value should be significantly higher for identical or similar goods at or about the same time, in a comparable commercial transaction. We find in the present case due examination about this crucial aspect has not been done by the assessing officer and comparison based on the contemporaneous import is not proper. 6. We have to see whether the HR Steel Plates, with which the adjudicating authority has compared the HR Coils, are really similar goods in terms of definition of similar goods. "Similar goods" are defined in clause (f) of Rule 2 which is as under:- "2(f) "similar goods" means imported goods - (i) which although not alike in all respects, have like characteristics and like component materials which enable them to perform the s....
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.... a finding whether the HR Steel Plates and HR Coils perform the same function and whether they are commercially interchangeable, there is also no other finding or justification recorded by the adjudicating authority at all for treating the two similar. 4.3 Thus it is seen that HR Plates and the HR Coils could not have been treated similarly and hence no sufficient reason really existed to doubt the declared value. 4.3 Even if it is presumed that the HR Plates are similar to HR Coils, one has to follow guidelines given in the statutory Interpretative Notes to the Valuation Rule 5. The AC did not follow the statutory guidelines inasmuch as he did not consider such factors as differences in commercial levels, quantities imported, nature of relationship (of course, purely commercial) of the appellant-importer with the supplier, etc. For instance this appellant has submitted during hearing that he has been importing from the same supplier since many years and submitted numbers of bills of entry in support of his contention. If it is also, he stands benefited by the judgment of the Supreme Court in the case of Basant Industries v. Addl. CC, Mumbai [1996 (81) E.L.T. 195 (S.C.)], whe....
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....e respondent to the exporter, over and above the declared transaction value. The value declared by the respondent was to be remitted through the banking channel. 9. In an identical matter involving similar facts, in Appeal No. C/406/11 titled as Arya Ship Breaking Corporation vs. Commissioner of Customs (Import) Mumbai, this Tribunal vide order No. 87206/2018 dated 16.7.2018 allowed the Appeal filed by the assessee/importer. The relevant extract of the said order is as under:- "3. The learned Counsel for the Appellant submits that both the lower authorities failed to appreciate the fact that the Appellant had imported the goods against a contract backed by letter of credit. He further submitted that in arriving at the enhancement of declared value, the original adjudicating authority erred in treating HR Coils and HR Plates as one and the same for the purpose of contemporaneous values. He submitted that both the said goods are different in nature and therefore the values relied upon by the Department for enhancement of the declared values is erroneous and not legally sustainable. It is his further submission that the department also failed to produce any evidence, with regard....
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....wed the Appeal filed by the assessee and while accepting the transaction value as declared by the assessee, held as under:- "13. As per the scheme of valuation under the Customs Act, 1962, as per Section 14, the transaction value is required to be accepted for assessment purposes except in circumstances, outlined in Rule 3 (earlier Rule 4) of the Customs Valuation Rules. Unless the price actually paid for the transaction falls within the exceptions, Customs authorities are bound to assess the duty on the transactional value. This position of law is well settled by the Hon'ble Supreme Court in the case of Eicher Tractors v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.) in which the Hon'ble Apex Court observed as follows : "Reading Rule 3(i) and Rule 4(1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4(2) namely :- (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which- ....