TaxTMI 
TaxTMI 
2023 (7) TMI 1069
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.... of the appellant submits that the supplier at the time of billing calculate the theoretical weight of the goods on the basis of thickness, length and width of the HR steel plates and the billing was done on this basis. This is a universal practice in respect of similar type of goods globally traded. 2.1 She submits that it is obvious that when theoretical weight is taken and billing is made accordingly, the physical weight will always differ either lower side or higher side. However, the value of the goods is determined on the basis of the theoretical weight calculated on the basis of thickness, length and width of the HR steel plates, moreover there is no extra consideration even if a slight increase in the weight. 2.2 She submits that this issue is no longer res-Integra in the appellant's own case this Tribunal has decided the matter in their favour which is reported at Welspun Crops Ltd Vs. Commissioner of Customs Mundra 2019 (370) E.L.T. 874 (Tribunal Ahmedabad). 3. On the other hand Shri Ajay Kumar Samota, Learned Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. 4. We have carefully considered the submissions mad....
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....ed to the facts of the instant case, thereby warranting rejection of the transaction value. 8. It is settled law laid down by the Hon'ble Apex Court in the case of Eicher Tractors Ltd. v. Commissioner of Customs reported in 2000 (122) E.L.T. 321 that it is only when the transaction value is liable to be rejected, based on the exceptions provided for in Rule 3(ii) of the erstwhile Customs Valuation Rules, 1988, could the assessable value be determined in terms of the valuation provisions. The relevant observations of the Apex Court are extracted for use of reference. "13. That Rule 4 is limited to the transaction in question is also supported by the provisions of the other Rules each of which provide for alternate modes of valuation and allow evidence of value of goods other than those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into I....
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....s. The adjudicating authority has in a completely ad hoc and arbitrary manner, without any reference to any provisions of the law and as also without following the provisions of the Valuation Rules, which lay down a codified manner of re-computing the value, arrived at an assessable value which has no legal basis or sanctity. It is settled law laid down by the Apex Court in the case of CCE v. South India Television Pvt. Ltd. reported in 2007 (214) E.L.T. 3 that even if the declared value is to be rejected the department has to apply the Valuation Rules, sequentially and cannot arrive at the value in an arbitrary and ad hoc manner. The relevant observations of the Apex Court in this regard are extracted herein below for ease of reference. "8........................ Lastly, it is important to note that in the above decision of this Court in Eicher Tractors (supra) this Court has held that the Department has to proceed sequentially under Rules 5, 6 onwards and it is not open to the Department to invoke Rule 8 without sequentially complying with Rules 5, 6 and 7 even in cases where the transaction value is. to be rejected under Rule 4. In the present case, the show cause notic....
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....etres, it is completely unreasonable and illogical to apply 1% as the acceptable difference between the declared and the actual weight. In coming to this conclusion we are guided by the Indian Standard specification 1852:1985 which provides the specification for rolling and cutting tolerance for hot rolled steel products. 9.3 The said standard in clause 1.1 while explaining the scope thereof states that the said standard lays down rolling and cutting tolerance for hot rolled structural steel, beams, channels, equal and unequal leg angles, Tee bars, bulb angles, round and square bars, flats, plates, strips and sheets rolled from structural steels including medium and high strength steel. Pvarart 7 of the said standard deals with rolling and cutting tolerance for plates. Clause 7.1 stipulates the tolerance with respect to the width of the plates; Clause 7.2 provides for the tolerance with respect to the length of the plates; Clause 7.3 provides for the tolerance with respect to the thickness of the plates. Clause 7.4 provides for the tolerance with respect to the weight of the plates and reads as under : "7.4 The consignment weight shall not vary from the theoretica....
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....declared weight and the actual weight exceeds the tolerance limits prescribed in the Indian Standards specification can the matter be taken up for adjudication for examining whether any fine is leviable or penalty is imposable. 11. In the facts of the present case it is not in dispute that the difference between the theoretical weight that has been declared on the bill of entry vis-a-vis the weight that has been physically computed worked out to 3.57% and is well within the 5% tolerance provided for, in the Indian Standard specifications. 12. We also take note and find merit in the appellant's grievance to the effect that the manner of computing the physical weight was not the most scientific one inasmuch as the physical weight was arrived at by first arriving at the tare weight of the truck trailer and thereafter arriving at the weight of the truck trailer with the steel plates loaded on it. It is common knowledge that in addition to the weigh scale calibration error, the direction in which the vehicle is parked on the weigh scale, the breeze factor, the extent of fuel present in the vehicle, etc. can all play a role in causing a weight variation. In our view mor....