AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 504
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....s located in China contacted the Respondents i.e. M/s Sun Tex for resale of their goods since it was incurring heavy detention and demurrage charges and also because the goods were getting deteriorated and the exporter from China was not getting any other buyer to buy the goods. The said exporter entered into an agreement in the month of December, 2008 with the Respondents and the Respondents agreed to buy the said goods @ USD 600/MT subject to the condition that payment of all detention and demurrage charges will be born by the Respondents. In this matter the detention and demurrage charges alone compute to USD 505/MT. After the finalisation of the agreement, the Respondents filed bill of entry in the month of January, 2009 declaring assessable value of the goods in question as Rs. 2,92,09,200. 3. Since the contemporaneous unit price of polyester chips was higher than declared unit price, therefore enquiry was raised to the Respondents to justify the declared value. Since the Department was not satisfied with the justification given by the Respondents therefore a personal hearing was given to the Respondents on 28.1.2009 and after hearing the respondent, Order-in- Assessment date....
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....f. He further submitted that since the earlier importer did not take the delivery of the goods in question and thus the title was left with the overseas exporter/supplier itself. According to him the provision of section 14 of the Customs Act is not applicable in instant matter because the goods in question had landed on 23.8.2008 on Indian landmass and when the goods were not taken for delivery by the 1st importer it were not exported back to China, therefore it implies that while entering into fresh sale deal when the appellant, the goods in question were already in India. He further submitted that there is no clause or provision in the Custom Valuation Rules or Customs Act which prescribes that the value of the imported goods can be negotiated after arrival onto Indian landmass. He also submitted that the value was not enhanced based on contemporaneous value but there is value of import which was taken into account while passing the Order-In-Assessment. He also relied upon the decisions of the Tribunal in the matters of M/s. Steel Strips Ltd. vs. CC, Mumbai [1997(95) ELT 538 (Tri-Mum)] in which it was held that valuation of the goods to be the actual price giving rise to importa....
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.... Customs Act, 1962 relating to valuation of goods, which is extracted as under:- "Section 14. Valuation of goods. - For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from 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 ....
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.... on the transaction value of the goods and for determining the transaction value, the following ingredients are required:- (i) The price should actually be paid or payable when the imported goods are sold for export to India. (ii) The imported goods should be for delivery at the time and place of importation. (iii) The buyer and seller of the goods are not related. And (iv) The price should be the sole consideration for the sale. 8. It is admitted that in the instant matter earlier the importer was somebody else i.e. M/s. Filatex, although they agreed the price @ USD 1400/MT but did not take the delivery nor honor the bank L.C. They also did not pay any price to the exporter. Therefore neither the transfer of goods from the exporter to the then importer took place nor the goods were delivered to the earlier importer at that time and place of importation i.e. India nor any price was paid or payable by the earlier importer to the exporter. Although the criteria of place of importation was satisfied, but that cannot be read in isolation and the requirement of 'at the time of importation' has to be read in tandem. The requirement of delivery at the time and place of importation is....
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....d that too on 2.1.2009. No Bill of Entry was filed by the earlier importer who neither took the delivery of the goods nor made any payments either to the exporter or to the Customs authorities. Another important aspect of the matter is that if the earlier importer i.e. M/s. Filatex did not take the delivery of the goods in the month of August 2008 when they were imported, the title was remained with the overseas exporter only and it was transferred only in the month December, 2008 or January, 2009 when the respondents entered into contract with the exporter and made the payment to the exporter as well as to the Customs authorities in India and released the goods for home consumption. We are also not ready to accept the contention of learned Authorised Representative that in view of the decision of this Tribunal in the matter of M/s. Steel Strips Ltd. (supra) the value of the goods is the price originally agreed by the original buyer. Because in that matter the consignment was originally shipped for earlier importer M/s. Shyam Sunder & Sons and that importer had also filed B/E for clearance of goods on 23.6.1989 and the goods were landed on 4.7.1989. Whereas in the case in hand, the....
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....all be the transaction value". "Transaction value" has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1) in turn states: "The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules." 8. 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 - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no....
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....ording to Section 14(1) of the Act, assessment of customs duty under the Customs Tariff Act, 1975 is to be made on the value of the goods imported. Unless the value of the goods is fixed under the sub-section (2) of Section 14, the value has to be determined under sub-section (1) of the said Section. The value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course of international trade. The word "ordinarily" is clarified in the Section itself, which describes an "ordinary" sale as one "where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale...". According to Section 14(1A) price of imported goods is to be determined in accordance with the Rules framed in this behalf. Under Rule 3(i) of the 1988 Rules, the value of the imported goods shall be the "transaction value". Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1), in turn, states that "....
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....onal expenses of Detention and Demurrage charges which compounds and computes to USD 505/MT, that was the reason that the price offered by them is only USD 600/MT for which Bill of Entry was filed and according to us that is well reasoned explanation for quoting the price in question. In these circumstances, there is no ground for rejecting the transaction value and we hereby upheld the impugned order of the learned Commission and the Appeal filed by the Revenue is rejected. (Pronounced in Court on 22.01.2019) (Sanjiv Srivastava) Member (Technical) (Ajay Sharma) Member (Judicial) 15.1 I have gone through the order prepared by learned Member (Judicial) but after lot of persuasion, I am not in a position to agree with the same. 15.2 The facts have been narrated by the learned brother. So am not repeating the same. 16. As per Section 46 of the Customs Act, 1962, the Bill of Entry for goods imported has to be filed at the time of importation which in the present case was when the goods for the first time entered into the Indian Customs waters. 16.1 In terms of Section 14, as explained by Hon'ble Supreme Court in the case of Garden Silk Mills Ltd. vs. UOI - 1999 (113) ELT 3....
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....ficer in terms of Section 30. Unloading of imported goods can take place only after the import manifest has been delivered and an order permitting entry inwards of the vessel has been given by the Customs Officer in terms of Section 31. Section 32 provides that unloading of only those goods is permitted as are mentioned in import manifest. The goods are to be unloaded as per Section 33 only at the place which is approved for that purpose and the same cannot be unloaded except under the supervision of the Customs Officer (Section 34). 12. All imported goods unloaded in a customs area are required to remain under the customs authorities until they are cleared for home consumption or are warehoused or are trans-shipped (Section 45). The goods can be cleared by the importer only after, as provided by Section 46, the importer files a bill of entry for home consumption or warehousing pursuant to which clearance of goods is granted under Section 47 by the Customs Officer. This clearance is given after the officer is, inter alia, satisfied that the importer has paid the import duty assessed on the imported goods. 13. The aforesaid provisions of the Act, therefore clearly show that afte....
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....taken into consideration is no longer res integra. This contention was raised in Union of India v. Apar Industries Limited - 1999 (112) E.L.T. 3 (S.C.) = 1999 (5) J.T. 160. In that case the day when the goods entered the territorial waters, the rate of duty was nil but when they were removed from the warehouse, the duty had become leviable. The contention which was sought to be raised was that what is material is the day when the goods had entered the territorial waters because by virtue of Section 2(23) read with Section 2(27) the import into India had taken place when the goods entered the territorial waters. Following the decision of this Court in Bharat Surfactants (M/s) (Private) Ltd. and Another v. Union of India and Another, 1989 (43) E.L.T. 189 (S.C.) = 1989(4) SCC 21 and Dhiraj Lal H. Vohra and Others v. Union of India and Others 1993 (66) E.L.T. 551 (S.C.) = 1993 (Supp. 3) SCC 453, this Court came to the conclusion in Apar's Private Limited case that the duty has to be paid with reference to the relevant date as mentioned in Section 15 of the Act." 16.2 In terms of Section 14, the price needs to be determined in course of international trade on the time and date of impo....