TaxTMI 
TaxTMI 
2026 (1) TMI 437
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....were cleared on payment of duty assessed on the basis of the invoice value declared by the appellant. Thereafter, the department called for the details of statement of sale of imported goods (bill of entry wise) to the buyers with the details of sale price, actual remittances made to the suppliers and Customs Duty recovered, local taxes and contract entered into with the overseas suppliers for the subject consignments. Based on scrutiny of the details and documents submitted by the appellant, the department found out that the amounts remitted to the overseas supplier for goods imported under the above three bills of entry were higher than the invoice value declared by the appellant in the bills of entry. Hence a show cause notice was issued to the appellant in terms of section 28(1) of Customs Act, 1962 wherein the appellant was called upon to show cause as to why the differential duty amount of Rs.10,19,051/- should not be paid by them along with interest thereon. 3. After following due process of adjudication, the Order-in-Original No. 708/2015 (ADC) dated 25.08.2015 was passed wherein (i) the declared value in respect of all the three bills of entry was rejected unde....
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....f prices took around one to three months, coupled with fluctuating gold prices, the price as declared in the proforma invoice was either more or less than the amount actually remitted to the supplier post clearance. 4.2 The Ld. Advocate averred that the demand of differential duty was made in the impugned order-in-original by invoking the provisions of Rule 3(2)(c) read with Rule 10(1)(d) of Customs Valuation Rules, 2007 whereas the Show Cause Notice did not mention the said provisions/sections. She further submitted that in the impugned order-in-appeal, the LAA has gone beyond the show cause notice and order-in-original by alleging for the first time that the sale is one of the main requirements under Section 14, which in the present case did not occur at the time of import and was effected only subsequently; and therefore the price payable at the time of import cannot be considered as the transaction value. 4.3 The Ld. Advocate contended that at every stage of adjudication, the demand has been made on different grounds/basis. In this regard, she placed reliance on the decision of the Hon'ble Supreme Court in the case of C.C.E. v. Gas Authority of India [(2008) 232 ELT 7 SC)....
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....g principle laid down in the aforesaid Circular issued by the Customs department. 4.7 She averred that transaction value in terms of Section 14 shall be the value of goods when sold for export to India, that is to say, the price at which the goods are to be sold before they are imported into India. The remittances after importing goods into India cannot be considered a sale for export to India. In this regard, she placed reliance on the decision in the case of Surendra R. Choudhary Vs. Commissioner of Customs, Nhava Sheva [2020 (2) TMI 1260 - CESTAT MUMBAI], the appellant in which case accepted a consignment for a negotiated value of EUR 800 per metric ton after the original importer refused to take delivery after importing the goods against proforma invoice for a value of EUR 1137 per metric upon and the Tribunal upheld the enhancement in transaction value from EUR 800 to EUR 1137 by holding as under: - "9. While such may be the negotiated value, it cannot be disputed that the whole of it was conducted after the importation of the goods. Hence, the qualifications entailed upon acceptance of declaration as 'transaction value' is compromised; the price is no longer one a....
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....(d) of Customs Valuation Rules, 2007 is applicable only when a fixed percentage of the proceeds from a re-sale are remitted outside India as a condition of sale of goods whereas in the present case, it is not established that the payment made to the foreign vendor form part of the proceeds of a subsequent re-sale. 4.10 The Ld. Advocate placed reliance on the decisions of the Apex Court in Pratibha Processors vs Union of India [1996 (88) ELT 12 (SC)] and Commissioner of Customs, Chennai vs Jayanthi Krishna & Co. [2000 (119) E.L.T. 4 (S.C.)] to submit that no interest is payable by the Appellant as there is no short payment of duty by the Appellant. 5. Per contra, Ms. Rajini Menon the Ld. AR for the Revenue supported the findings in the impugned order. She submitted that it is an undisputed fact that the Appellant has remitted higher amounts to the overseas supplier than the invoice value declared in the bills of entry for import of the impugned goods and therefore, the same should be considered as correct transaction value under Rule 3(1) of Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962. Accordingly, the confirmation of demand of duty in the order....
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.... the latter, the goods are sold Provisionally at a price to which part of the profit arising out of subsequent sale in the country of importation has to be added." 9. In page 9 of the impugned order-in-appeal, the LAA has held that "The gold bars were imported into India under the "consignment sales". The Appellant has also submitted that it imported gold bars from foreign suppliers on consignment sale basis. The above facts leave no doubt that the Appellant has imported the impugned goods on consignment sale basis. It is seen from the FAQ of DGOV that according to the Technical Committee on Customs Valuation, goods imported on consignment sale basis do not constitute 'sales' meeting the requirements and conditions of Article 1 and 8 of the Code, viz. Agreement on Implementation of Article VII of The General Agreement on Tariffs And Trade (GATT), 1994, (Usually referred to as the Agreement on Customs Valuation or ACV for short), and in such cases, one of the methods other than the transaction value method has to be applied proceeding sequentially. 10. The Original Authority has applied Transaction Value Method under rule 3 of Customs Valuation (Determination of value of impor....