AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 307
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.... 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 declaring USD 392.70 PMT as the value of the importe....
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....lar 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. 906024/ 07.08.09 1555.330 392.70 30069084.00 460.00 35217669/- (5148585/-) 25,03,209/- ....
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.... 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 Department and the value of HR Coils was incorrectly rejected based on the value of HR Plates; v. Even otherwise, the commercial adjustments as contemplated under rule 5 of the Valuation Rules have n....
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....d 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 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 importatio....
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....tation 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 actually paid or payable for the goods will not be treated as "transaction value‟ where the buyer and the seller are related to each other. As per the first proviso to the amended section 14 (1), certain charges are to be added to the transaction value of the imported goods. It is, therefore, clear that while....
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....red 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 customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value....
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....h 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 officer for determination of the value of imported goods under these rules. (2) Nothing contained in these rules shall be construed as restricting or calling into question the right of the proper officer of customs to satisfy himself as to the truth or accuracy of any statement, information, document or declaration presented for valuation purposes. (3) The provisions of the Customs Act, 1962 (52 of 1962) relating to confiscation, penalty and prosecution shall apply to cases where wrong declaration, information, statement or documents are furnished under these rules. 12. Rejection of declared value....
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....he 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. The only ground on the basis of which the transaction value has been rejected is that the imports were made at a higher price by other importers than at the price at which the Appellant imported HR Coils in question. A perusal of the imports relied upon in the impugned order show that the quantity of imports were substantially different from the quantity of the import made by the Appellant. Rule 5 of the Valuation Rules requires, amongst others, that the transaction value of identical goods should be at the same commercial level and in substantially the same quantity as the goods being valued to determine the value of the imported goods. In the present case....
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....clared 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 Commissioner Customs (EP), Mumbai v/s Yatin Steels India Pvt. Ltd. [2019-TIOL-1137 CESTAT-MUMBAI], the Tribunal held that HR Coil and HR Steel Plants cannot be said to be similar or identical goods and, therefore, the values of HR Steel Plates could not have been relied upon by the Department for enhancement of declared value. The relevant portion of the decision is reproduced below:- "8. HR Coil and HR Steel Plates cannot be said to be similar or identical goods. If the revenue is rejecting the value declared by the respondent, then they are bound to prove beyond reasonable doubt that the goods compared with are similar goods or identical goods. In our view HR Coils and HR Plates cannot be terme....