AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 265
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....ces were raised by M/s. Oingdao Yijia E.T.I.I./E Co., Ltd., Qingdao, China, K-Sun International Trade Co, Limited, Hongkong, M/s. Guangdong Silique International Group Gold Silk Co. Ltd., Guangzhou, China and M/s. Avanti Trading Co. Ltd., Jordan, Kowloon, Hong Kong with recorded unit price and declared country of origin as shown in the table below: SL. NO. Bill of Entry No & Date Value decl. USD Country of Origin 1 795925/ 03.03.2011 795926/ 03.03.2011 797816/ 04.03.2011 30/Kg China 2 3274284/ 21.04.2011 3325340/ 26.04.2011 21/kg Vietnam 3 732617/ 29.12.2010 771868/ 07.02.2011 768972/ 03.02.2011 21 & 21.35/kg Vietnam 4 731809/ 28.12.2010 15.30/kg Uzbekistan 5 722015/17.12.2010 723260/20.12.2010 21/kg Vietnam 3. As the Revenue noticed the contemporaneous import of same goods of same description were assessed at higher values and on the presumption that the importer had undervalued the goods to evade payment of appropriate duty the importer was requested to justify the values declared. Aggrieved by the above, the importer filed W.P No. 1879 of 2011, 3325 of 2011, 3326 of 2011, 11726 of 2011, 6682 of 2011, 604 of 2011, 29713 of 2011 and 29712 of 2011 before ....
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....40(CIF) per kg was to be adopted under Rule 4 of CVR, 2007 for the subject goods for the purpose of assessment of duty and similarly identical goods were imported for USD 28.50(CIF) per kg from Uzbekistan, the value of USD 28.5(CIF) per kg was to be adopted under Rule 4 of CVR, 2007 for the subject goods for the purpose of assessment of duty. 8. Based on the contemporaneous prices, the assessments were finalized by issuance of Orders- in- Original where in the values were arrived at as detailed in table below : O- in-O Bill of Entry No. & Date Actual Ass. value Declared Ass. Value Duty on Enhanced Value Declared Duty Short Payment of Duty Fine amt. In Rs. Penalty Amt. in Rs. 18037/12 795925/ 03.03.2011 795926/ 03.03.2011 797816/ 04.03.2011 87,97,210 77,29,692 97,80,705 65,97,908 57,97,269 73,35,529 4,53,056 3,98,079 5,03,706 3,39,792 2,98,559 3,77,780 1,13,264 99,520 1,25,927 2,00,000 1,00,000 18040/12 3274284/ 21.04.2011 3325340/ 26.04.2011 39,81,390 40,98,489 28,34,210 29,17,568 8,74,711 9,00,438 6,22,676 6,40,990 2,52,035 2,59,448 5,00,000 2,50,000 18041/12 732617/ 29.12.2010 768972/ 03.02.2011 771868/ 07.02.2011 40,94,248 65,27,198 42,03,487....
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.... 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18041/12 732617/ 29.12.10 768972/ 03.02.11 10ZS2255 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18043/12 731809/ 28.12.10 Avanti/005/10 02.09.10 M/s Avanti Trading Co. Ltd. 1,00,000 15.3 Per Kg 28.5 Per Kg 18040/12 3274284/ 21.04.11 3325340/ 26.04.11 10ZS2255 10.07.10 M/s.Qingdao Yijia E.T.I.I/E Co. Ltd. 1,08,000 21 Per Kg 29.5 Per Kg 18037/12 795925/ 03.03.11 795926/ 03.03.11 797816/ 04.03.11 2010FD 091778 25.05.10 M/s. Guangdong Silique Internatinal Group Goldsilk Co. Ltd., 3,00,000 30 Per Kg 40 Per Kg Therefore it appears that the contracted price / value cannot be accepted since the importer has not fulfilled the conditions of the contract. As the condition of contract is found not complied with which makes the contract ultra virus to the transaction. Therefore the values of the goods have to be arrived as per the contemporaneous values and not as per the contract price. Thus the observation of Appellate authority stating that "the under valuation was not proved with clinching evidence" is not acceptable....
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....veri Silk & Jute P. Ltd. 14.10 $ per kg. 696414/22.11.2010 Kaveri Silk & Jute P. Ltd. 13.75 $ per kg. 704225/30.11.2010 Kaveri Silk & Jute P. Ltd. 13.75 $ per kg. 11.4 The importer have contracted for import of huge quantity of silk and so the department's reliance on the Bill of Entry No. 699388 dated 25.11.2010 as mentioned in the Show Cause Notice for a value at $ 28.50 cannot be considered relevant as the quantity and quality of the imports are different. 11.5 There is no allegation in the Show Cause Notice that there was any flow of money in the transaction through authorised or unauthorized channels and there is no suspicion into the contract entered with the supplier. The transaction value declared by the respondent / noticee has to be accepted in the absence of any special consideration or any mis-declaration of the imported goods either relating to description or price. 11.6 The proposal to confiscate the impugned goods and to impose penalty is not legally sustainable as there is no mis-description of the goods, as to quantity of the goods or change of country of origin or manipulation of invoices in the Bill of Entry. 11.7 The importer has relied upon the f....
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....impugned goods are akin to the kind of goods dealt in the case of Eicher Tractors (supra) where 77% discount was allowed by the manufacturer on one time sale of five years old sock. As such, the present appeals are clearly distinguishable from the case dealt in Eicher Tractors (supra). Moreover, the decision of the three Member Bench of the Hon'ble Supreme Court in the case of Rajkumar Knitting Mills (supra) interpreting Section 14(1) of the Customs Act, 1962 is binding on us in view of the fact that the relevant words of Section 14(1) have not under gone any change and there is no contrary decision of any Larger Bench of the Hon'ble Supreme Court. Section 14(1) of the Customs Act, 1962 (which is incidentally in line with Article VII of GATT and Ad Article VII in Annex I to GATT, to which India is a signatory) requires customs valuation to correspond to ordinary competitive price in international trade. Transaction value method is one of the methods of valuation under the Customs Valuation Rules, 1988 (which follows the Agreement to implement the said Article VII of GATT). The transaction value has been defined to be the actual price paid or payable. The declared value may not repr....
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....e of contemporaneous imports are sound and the same fully support the basis of valuation adopted in this case. Moreover, the different methods of valuation, whether based on transaction value, or comparable value (of identical/similar goods), or deducting value based on resale price, or computed value based on cost and profit etc, are designed to arrive at an equitable customs value for the purpose of charging customs duty. The importers can not have a grievance so long as one of these methods is fairly used, unless he is trying to secure a grossly undue duty advantage as in this case by declaring a value which is 25-30% of the value declared by competing importers importing similar goods. Equity considerations justify levy of duty to the same extent on similar goods." (ii) In the case of M/s. Y2K International [2010-TIOL-588-CESTAT-Mad] wherein the Hon'ble Tribunal Chennai held that:- "2. We have heard both sides. The importers submission that transaction value could not be rejected except in certain circumstances set out in Rule 4 of the Customs Valuation Rules, 1988 which have not been shown to exist, is not tenable as we find that the price declared does not reflect the pric....
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....the Tribunal has committed any error in proceeding on the basis that value has to be assessed according to the price as on the date of importation and not on the basis of the date of contract. 8. Shri Mehta has placed reliance on the decision of the Calcutta High Court in Sneha Traders (Pvt.) Ltd. v. Collector of Customs, 1992 (60) E.L.T. 43 (Cal.), wherein the learned judges have expressed the view that assessable value has to be determined on the basis of the prevailing international market price at the time of entering into the contract and the delay in shipment on the part of the supplier cannot have any effect on determination of the assessing value. We find it difficult to agree with the said view of the Calcutta High Court. We are of the view that the contract between the supplier and the importer may have a bearing in governing the inter se relationship between the supplier and the importer but insofar as assessment of the value for the purpose of levy of customs duty under Section 14 of the Act is concerned, what is necessary is to determine the value of the goods as on the date of importation or exportation." 13. We have heard both sides and carefully considered the su....
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....it is satisfied that it is necessary or expedient. Thus, whenever tariff has been fixed vide notification issued by the Board under Section 14(2) of the Act, then notwithstanding the transactional value of the imported goods under subsection (1) to Section 14 of the Act, as per sub-section (2) to Section 14 of the Act the customs duty is payable as per the tariff value so fixed. In the present case, the Board has not considered it necessary and expedient to issue a notification under Section 14(2) of the Act to fix a tariff for the imported aluminium waste. 11. The second proviso to Section 14(1) deals with different situations, enumerated under the three clauses; (i) when buyers and sellers are deemed to be related; (ii) when there is no sale, or buyers and sellers are related or the price is not the sole consideration for sale, etc. and (iii) where the proper officer has reason to doubt the truth or accuracy of such value. When the conditions specified in the second proviso are satisfied, the transactional value for the purpose of charging of Customs duty is to be made as per rules framed in this behalf. 12. Rules 3 and 12 of the 2007 Rules i.e. Customs Valuation (Determinati....
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.... primacy to Rule 3 which in turn gives primacy to Rule 12 of the 2007 Rules. 14. Rule 12, which as noticed above enjoys primacy and pivotal position, applies where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods. It envisages a two-step verification and examination exercise. At the first instance, the proper officer must ask and call upon the importer to furnish further information including documents to justify the declared transactional value. The proper officer may thereafter accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on 'certain reasons' raise doubts about the truth or accuracy of declared value. 'Certain reasons' would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, ab....
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....es. (f) The proper officer can raise doubts as to the truth or accuracy of the declared value on 'certain reasons' which could include the grounds specified in clauses (a) to (f) in clause (iii) of the Explanation. (g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on 'certain reasons' to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the '....
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....f Explanation to the 2007 Rules, the doubt must be reasonable and based on 'certain reasons'. The proper officer must record 'certain reasons' specified in (a) to (f) or similar grounds in writing at the second stage before he proceeds to discard the declared value and decides to determine the same by proceeding sequentially in accordance with Rules 4 to 9 of the 2007 Rules. It refers to a doubt which the proper officer possesses even after the importer has been asked to furnish further information including documents and evidence during the preliminary enquiry to clear his doubt about the truth and accuracy of the value declared. Therefore, there has to be a preliminary enquiry by the proper officer in which the importer must be given an opportunity for clarification of the doubts of the officer by furnishing of documents and evidence as to the accuracy or truth of the value declared. It is only in case where the doubt of the proper officer persists after conducting examination of information including documents or on 15 Appeal No(s).: C/41617 & 41619/2013-DB account of non-furnishing of information that the procedure for further investigation and determination of value in terms o....
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....of origin. Crucial commercial details of these consignments on which reliance is placed to determine contemporaneous prices as to the type, quality, quantity imported whether under any contract or whether any advance paid or whether the supply from the manufacturer or trader or whether the import is from any stock lot, etc., are not ascertainable. There was no discussion by the original adjudicating authority as to how the values of contemporaneous imports of identical / similar goods have been arrived at. Further, the respondent has intimated the clearances of same commodity by other importers nearly at or around the same price during the relevant period during the adjudication proceedings. (Paragraph 11 supra) 18. We find there was no allegation that the importer has mis-declared the description of goods or whether any excess quantity found or whether there is any other mis-declaration as to any other aspect in relation to imported goods. All the silk was imported in terms of the contracts entered with various suppliers as agreed upon with the contracting parties. There is no allegation that any amount over and above the contracted price was paid by the importer to the supplier.....
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....have been relied upon as contemporaneous prices by the lower adjudicating authority it is not possible to decide whether the decision of enhancement is reasonable or whether it is in accordance with the valuation provisions or not. 22. The impugned goods in all these appeals are imported in terms of various contracts entered into with the suppliers abroad. If any condition of the contract is contravened, it is for the contracting parties to settle among themselves and raising a doubt about the validity of the contract is not proper in the absence of any evidence that such a contract is entered into with any ulterior motive affecting the price. Further, revenue has discredited the contract prices as the respondent has not reportedly imported the entire contracted quantities. From the Show Cause Notice, the Order-in-Original and records, contract numbers and the quantity contracted for import are only mentioned as detailed in paragraph 10 (b) supra. Actual total quantity imported and how much is the shortfall and how it is to affect the transaction prices declared is not forthcoming. 23. On the issue of accepting the declared transaction value under a contract, we find it relevant ....