TaxTMI 
TaxTMI 
2024 (4) TMI 248
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....ows : a) The quantity of Iron Ore particles of size more than 10 mm present in the Exports made under the Shipping Bill No. 312/10-11 covered in the show cause notice are considered as Iron Ore Fines and are correctly classifiable under Tariff item No. 26011130. Hence, I drop the demand of Rs. 7,21,149/- demanded on account of classification of goods as Iron Ore Lumps. b) In terms of Section 18 of the Customs Act, 1962, I finalise the provisional assessment of the said Shipping Bills as detailed at para 23 above, and demand Customs duty of Rs. 8,16,059/- (Rupees Eight LakhsSixteen Thousand and Fifty Nine only) from M/s Terapanth Foods Ltd. c) I demand interest at applicable rates on the amounts mentioned at (b) above, under Section 18(3) of the Customs Act, 1962. d) I confirm the demand of Customs Duty of Rs. 19,06,508 (Rupees Nineteen Lakhs Six Thousand Five Hundred and Eight only) being the export duty short paid in respect of Shipping Bill No. 312/10-11 in terms of Section 28 of the Customs Act, 1962, by adopting the actual transaction value of the said goods, in terms of Rule 3(1) of the Customs Valuation (Determination of Price of Exported Goods) Rules, 2007 read wi....
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.... Contract provided - CIQ to inspect the commodity for Quantity and Quality at place of discharging port and the CIQ (lab) result at the discharge port shall be final and binding on both the parties. As per Article 14B weighing was to be done at discharging port and as per Article 15 weight and moisture content was to be determined by CIQ. The weight thus, determined shall be basis for final invoice. Article 15 also provided the percentage of moisture loss at the time of loading and discharge will be ascertained at 105 cg. It also provided for adjustment of the price based on the Fe content and the impurities based on the test report of a testing agency viz., CIQ, China. CFR (also known as C&F) is one of the standard agreements of trade where the price includes the cost of the goods as well as the cost of the freight upto the port indicated therein, but not the transit insurance. 5. Appellants filed Shipping Bill No. 312/2010-11 for quantity of 49000 WMT. Appellants paid customs duty of Rs. 94,86,065/- and provisional assessment was done after Appellants furnished the provisional duty bond and undertaking. At the port of discharge Quality Certificate and Inspection certificate were....
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....efund (iii) After negotiation price 114 USD PDMT CRF was arrived at by giving discount that there was nothing wrong in negotiating the price when the buyer demanded such discount and therefore USD 114 PDMT is the transaction value. (iv) Appellants have not received anything in excess of USD 114 from the buyer. (v) As per Section 14 of Customs Act, 1962, the value of exports goods shall be the transaction value i.e. price actually paid or payable for the goods when sold for export from India for delivery at the time and place of exportation. Further, as per the Customs Valuation (Determination of Value of Export Goods), Rules, 2007 the value of export goods shall be transaction value. (vi) No such exercise about transaction value of goods of like kind and quality has been made as required under Rule 4. Appellants relied upon this Tribunal judgment in the case of CC(Export), Goa, Vs VGM Exports reported in [2013 (291) ELT 572 (Tri-Mum)]. (vii) That the declared value of USD 114 is supported by contract entered with M/s Swiss Singapore Overseas Pvt Ltd., (viii) There is no independent evidence other than statement of Shri Babulal Singhvi in support of the charge that....
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....mical examiner test report was ignored as against the other test reports submitted. (vii) For including 3.5% lumps, reliance is placed on CIQ report on FE content as certified by CIQ, report is ignored and therefore the Department cannot pick and choose the contents of any test report. 12. The Learned Commissioner passed impugned Order-in- Original confirming the demand and imposing penalties as aforementioned. 13. Being aggrieved, the appellants are in appeal interalia on the following grounds: 13.1 The Ld. Commissioner in Para 22.1, has erred in taking moisture content of iron ore as per the chemical laboratory report to arrive at dry weight of iron ore inspite of Article 14 and 15 in the contract entered with the buyer which categorically provided that for determination of moisture content and consequently iron ore content testing has to be at 105 Degree C. And the final Dry weight shall be calculated by deducting the final free moisture content as aforesaid from the final wet weight and the weight thus determined shall be the basis for final invoice. 13.2 The Ld. Commissioner ignored the case laws cited regarding re-testing as held in Alpine International Vs CC, Mangalo....
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....nt made by the seller to the buyer for an earlier shipment made by them by way of settlement of dispute. The Adjudicating Authority have erred in holding that this amount was payable for the present consignment but adjusted for previous consignment, shall be treated as amount payable for the present consignment and the transaction value shall include the suppressed value of Rs. 3,81,30,160/-. 15. It is further urged that Shri Babulal Singhvi, appellant had stated in his statement dated 03.01.2013 that contract dated 16.06.2010 is for USD 114 PDMT for the entire cargo. The said amount of USD 16 was by way of compensation for quality issue against the previous export consignment to the same buyer made by vessel M.V. Nava Eliza. The buyer had demanded compensation USD 20 PDMT, but the same was negotiated and settled at USD 16 PDMT which was adjusted by using the price of the present export cargo despatched vide M.V. Alcyone, vide Shipping Bill No. 312/2010-11 dated 18.06.2010. Thus, as the export price is a negotiated price the same is the transaction value and the same being business like and the parties being not related has to be given credence and acceptance. Learned Counsel reli....
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.... cost of freight and transit insurance are not part of transaction value at the port of export (in India) it includes only FOB (Freight on Board) value. This is the value for the purpose of Section 14 and export duty must be calculated on this FOB value. He further urges that the lab report of CRCL will prevail over the lab report at discharge port of the mutually agreed lab fixed by the parties. He further relies on the ruling of Hira Steel Ltd., [2017 (1) TMI 11- CESTAT, Mumbai] wherein it have been held that "departmental laboratory report, unless challenged, has to be accepted as true and correct". 21. The two questions to be answered by us in this case are: a) Can the transaction value between the buyer and seller be modified by the Customs based on the test report of the chemical examiner of CRCL when the price should be finalised as per the test report of CIQ as per the agreement between the buyer and seller? b) Can the US$ 10 per MT be added as additional consideration for sale in the case? 22. Duties of Customs are levied on the goods imported into India or exported from India as per section 12 of the Customs Act, 1962 Act at the rates specified in the schedules to t....
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....cordance with provisions of rule 10; (2) .. (3) .. (4) if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9. Rule 10. Cost and services . - (1) In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods, - (a) the following to the extent they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods, namely:- (i) commissions and brokerage, except buying commissions; (ii) the cost of containers which are treated as being one for customs purposes with the goods in question; (iii) the cost of packing whether for labour or materials; ......... (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." 25. We find that the Customs Export Valuation Rules do not provide for addition of any amount to the negotiated price (Transaction Value) or any reduction from it where the parties are not related and the price is at arm's length. If the transaction value has....