TaxTMI 
TaxTMI 
2022 (2) TMI 307
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....nit price of USD 460 PMT under rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007 [the Valuation Rules]. The Assistant Commissioner also confirmed the duty difference with interest under section 18(3) of the Customs Act, 1962 [the Customs Act]. 2. The Appellant claims to be importing Hot Rolled [HR] Steel Coil from foreign suppliers. Till November 2008, it imported HR Non-Alloy Steel Coil falling under Customs Tariff Heading [CTH] 7208, but pursuant to the issuance of a Notification dated 27.11.2008 wherein Steel falling under CTH 7208 was made a restricted item for the purpose of import, the Appellant started importing HR Alloy Steel Coil falling under CTH 7225 till such time the restriction remained in force. However, by Notification dated 08.01.2010, the restriction to import Non-Alloy Steel was lifted. 3. The Appellant asserts that it entered into a contract with M/s Duferco SA, Switzerland [Supplier] for supply of 3000 MT of HR Alloy Steel Coils at USD 385.90 PMT, which was subsequently raised to USD 392.70 PMT by sales order dated 10.04.2009. Three Bills of Entries dated 07.08.2009 were filed by the Appellant declarin....
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....mum price of USD 460 PMT CIF. b. As the value of similar goods as shown above in chart to Para 8.3 are available for the similar goods hence reliance has been made under Rule 5 of Valuation Rules i.e. the value of similar goods. The minimum price at which the similar good have been assessed finally is USD 460 PMT (Ignoring the similar goods which were provisionally assessed), particularly B/E No. 904752 Dt. 27/09/2009 which was assessed provisionally at US $ 385/MT CIF & which is subject matter of dispute of another order, the impugned goods are required to be assessed at a unit price of USD 460 per MT CIF taking Lowest Value of similar goods. Finally assessed as per Rules giving rise to the following Duty difference. S. No Bill of Entry No. & Date Quantity Declare d Unit Price USD Declared Value Re- determin ed Unit Price USD Re- determined Assessable Value (Difference) Difference of Duty 1. 906019/ 07.08.09 610.500 392.70 11802753.00 460.00 13823682/- (2020929/-) 9,82,563/- 2. 906022/ 07.08.09 784.550 392.70 15167648.00 460.00 17764733/- (2597085/-) 12,62,686/- 3. ....
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....rary, the transaction value, as contemplated under the provisions of rule 3 of the Valuation Rules, has to be accepted. In support of this contention reliance has been placed on the judgment of the Supreme Court in CCE & ST, Noida v/s Sanjivani Non-Ferrous Trading Pvt. Ltd. [2019 (365) ELT 3 (SC)], wherein it was held that the transaction value can be rejected only for cogent reasons arrived at by undertaking an exercise to determine on what basis it can be held that the price was not the sole consideration of the transaction value and if no such exercise is undertaken, the transaction value cannot be rejected; ii. The Appellant had made payment against letter of credit and documents evidencing the payment for the consignment to the supplier was on record and, therefore, rule 12 of the Valuation Rules could not have been invoked; iii. The re-determination of the transaction value has been done in contravention of the provisions of the Valuation Rules; iv. Reliance on rule 5 of the Valuation Rules is misplaced as the goods which were imported by the Appellant are not similar to the goods of which the value was relied upon by the Departmen....
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.... or subsection (1A), if the Board is satisfied that it is necessary or expedient so to do it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. *******" 12. Section 14 of the Customs Act, as amended on 10 October 2007, is as follows: "Section 14.Valuation of goods. - (1) 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 tran....
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....he first proviso of the amended Section 14(1), in the transaction value of the imported goods, certain charges are to be added which are in the form of 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 which can be prescribed in the rules. Sub-section (2) of Section 14, which remains the same, is an overriding provision which empowers the Board to fix tariff values for any class of imported goods or export goods under certain circumstances. We are not concerned with this aspect in the instant case." (emphasis supplied) 14. Thus, what has to be seen under section 14(1) of the Customs Act, as amended in 2007, is the transaction value of the goods imported or exported for the purpose of customs duty and transaction value is stated to be the price actually paid or payable for the goods when sold for export to India for delivery at that time and place of importation. Sub-section (1) of section 14 of the Customs Act also makes it clear that the price actual....
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....Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that - (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 some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for custom....
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....e shall be added to the price actually paid or payable for the imported goods, - (a) xxxxxxxxx (b) xxxxxxxxx (c) xxxxxxxxx (d) xxxxxxxxx (e) xxxxxxxxx (2) xxxxxxxxxxxx (3) Additions to the price actually paid or payable shall be made under this rule on the basis of objective and quantifiable data. (4) No addition shall be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule." 20. Rule 11 deals with declaration by the importer and rule 12 deals with rejection of declared value. Rules 11 and 12 are reproduced below:- "11. Declaration by the importer. - (1) The importer or his agent shall furnish - (a) a declaration disclosing full and accurate details relating to the value of imported goods; and (b) any other statement, information or document including an invoice of the manufacturer or producer of the imported goods where the goods are imported from or through a person other than the manufacturer or producer, as considered necessary by the proper....
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....ub-rule (4) of rule 3 provides that if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rules 4 to 9. Rule 10 deals with cost and services and provides that in determining the transaction value, there shall be an addition to the price actually paid or payable for the imported goods and what has to be added has also been provided. Sub-rule (3) provides that additions to the price actually paid or payable shall be made on the basis of objective and quantifiable data. Sub rule (4) provides that no addition shall be made to the price actually paid or payable in determining the value of imported goods, except as provided for in Rule 10. 23. The value of Alloy Steel HR Coil as declared by the Appellant is in terms of the Sales Order entered into and mutually agreed upon by the Appellant and the supplier. It is not the case of the Department that any additional payment was made by the Appellant pursuant to which under invoicing was resorted to by the Appellant. In fact, the Bank Remittance Certificate evidences payment to the supplier for the imports in terms of the Sale Order dated 10.04.2009. T....
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.... It is, therefore, rightly contended by Mr. Dushyant A. Dave, learned senior counsel appearing for the respondent that the reason given for setting aside the order that the normal rule was that the assessable value has to be arrived at on the basis of the price which was actually paid, and that was mentioned in the Bills of Entry. The Tribunal has clearly mentioned that this declared price could be rejected only with cogent reasons by undertaking the exercise as to on what basis the Assessing Authority could hold that the paid price was not the sole consideration of the transaction value. Since there is no such exercise done by the Assessing Authority to reject the price declared in the Bills of Entry, Order-in-Original was, therefore, clearly erroneous." (emphasis supplied) 25. The contention of the learned Counsel for the Appellant is that is that HR Steel Plates cannot be compared with HR Steel Coils Alloy and also the price is less when large quantity of imports are made as against the price where a small quantity is imported. Learned Counsel also pointed out that the LME Bulletin indicates the value of HR Plates and not HR Coils. 26. In Commiss....