Custom, Excise & Service Tax Tribunal
C.C, New Delhi vs M/S Srithai Superware India Ltd on 10 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. C/52600/2015
[Arising out of Order-in-Appeal No. CC(A)Cus/1087/2014 dated05.12.2014, by the Commissioner of Customs, New Custom House, New Delhi].
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri V. Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
yes
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
C.C, New Delhi .Applicants
Vs.
M/s Srithai Superware India Ltd .Respondent
Appearance:
Dr. S.K. Sheoran, Advocate for the Applicants None, for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Date of Hearing: 10.11.2016 FINAL ORDER NO. 55962 /2016-CU(DB) Per V. Padmanabhan The present appeal is filed by Revenue challenging the order in appeal dated 3.12.2014 passed by the Commissioner (Appeals) (Customs) New Delhi. The respondent imports and distributes melamine tableware and kitchen ware with the brand name EKTRA. These goods are imported from related foreign supplier who holds majority share in the respondent company. The department took the view that imports have taken place from related supplier and the Special Valuation Brand (SVB) looked into the pattern of valuation of such imports. The original authority, viz. the Deputy Commissioner (SVB), vide his order dated 1.2.2013 decided to accept the import value declared in the invoice Revenue appealed against this order. However, in the impugned order the valuation, on the basis of transaction value, was upheld. Revenue, not being satisfied with the impugned order has filed the present appeal on the same ground agitated before Commissioner (Appeals). These grounds in brief are as follows:
1) The order-in-original is a non-speaking order. As per Rule 3 of the Valuation Rules 2007, no reasons have been given for accepting the transaction value.
2) The Adjudicating authority has not examined whether the declared value approximates to any of the 3 values referred to in Rule 3(3)(b) of the valuation Rules 2007.
2. We have heard Dr. S.K. Sheoran, Ld. DR for the Revenue. None appeared for the respondent.
3. The Commissioner (Appeals), in the Impugned Order, has dealt with the same grounds agitated by the Revenue. After careful consideration he has come to the conclusion that there is no reason to interfere with the order passed by the original authority. For ready reference, the salient points for the impugned order are given below:
5.2 I find that although Revenue has stated in their Grounds of Appeal that the order passed by DC SVB is totally a non speaking order as per Rule 3 of the Valuation Rules, 2007 but no details are provided as to what makes the said order a non speaking one. From the impugned order it is observed that DC SVB took recourse to Rule 3(3)(a) of the Valuation Rules, 2007 for accepting the declared invoice values which inter alia provides that where the buyer and the seller are related, the circumstances surrounding the sale shall be examined and the transaction value shall be accepted as the value of imported goods provided that the relationship did not influence the price. It is not intended that there should be an examination of the circumstances in all cases where the buyer and the seller are related. Such examination will only be required where there are doubts about the acceptability of the price. Where the proper officer of customs has no doubts about the acceptability of the price, it should be accepted without requesting further information from the importer.
5.3 Thus, Rule 3(3)(a) of the Valuation Rules mandates that in case of transactions between related persons, the proper officer shall examine the circumstances of sale between the buyer and seller and accept the declared values of the imported goods if he finds that the same are not influenced by the relationship. Only in case of any doubt, the proper officer would request the importer for further information. In Interpretative Notes to Rule 3(3)(a) two examples are given to illustrate situations where the prices between the related parties are not influenced by their relationship.
5.4 From the impugned order, it is seen that the Respondents submitted documents such as reply to SVB questionnaire, copy of Distribution Agreement dated 01.09.2009 between their company and the Foreign Supplier which provides a basic idea about the terms of sale and payment, details of imports made from the Foreign Supplier, break up of selling prices of a few imported items, details of remittances made, copies of audited balance sheets and a declaration issued by the Foreign Supplier explaining the pricing policy of the Foreign Supplier for supplying the subject goods to the Respondents as well as to their other customers. DC SVB analysed these documents and accepted the declared invoice values on the basis of information provided by the Respondents. He did not call for any additional information and recorded in is findings that nothing contrary to the submissions made by the Respondents came to the notice of this Branch. On the other and I find that the Revenue has not brought our any evidence in its appeal to cast any doubt on genuineness of the documents available before DC SVB or provided any contrary information to doubt the identical/similar goods at higher prices or any evidence of payment over and above the invoice values. Under these circumstances, there is no justification in challenging the order passed by DC SVB..
6. Now coming to the ground of applicability of provisions of Rule 3(3)(b) in the instant case raised by the Revenue, I find that under Rule 13 of the Valuation Rules, 2007, Interpretative Notes to Rule 3(3) explain that Rule (3)(3)(a) and Rule 3(3)(b) provide different means of establishing the acceptability of a transaction value. Rule 3(3)(b) of the Valuation Rules provides an opportunity for the importer to demonstrate that the transaction value closely approximates to a test value previously accepted by the proper officer of customs and is therefore acceptable under the provisions of Rule 3. Thus, under Rule 3(3)(b) of the Valuation Rules, a responsibility is cast on the importer to prove that their declared invoice values are not influenced by the relationship between the buyer and seller by means of providing evidences in respect of transaction value/deductive value/computed values of imports of identical or similar goods made by other importers and assessed by the department. From the order dated 01.02.2013, I find that the Respondents in their reply to SVB questionnaire submitted that the Foreign Supplier does not supply the same goods to other buyers in India and the subject goods are exclusive custom made products as per specifications provided in purchase order. The Foreign Supplier in its declaration also confirmed that they are not selling the same goods to any other buyer in India or in other countries. The Respondents in their reply to appeal filed by the department and in their appeal filed before Honble CESTAT have stated that they do not have any data in respect of transaction value/deductive value/computed values of imports of identical or similar goods made by other importers, thus, they are unable to demonstrate fairness of their declared invoice values under Rule 3(3)(b) of the Valuation Rules. In view of these facts, it is clear that since the Respondents are unable to provide any information regarding transaction value/deductive value/computed values of imports of identical or similar goods made by other importers, provisions of Rule 3(3)(b) are not attracted.
Accordingly, appeal filed by the Revenue is dismissed.
4. After going through the record of the case including the orders passed by both the authorities below, we are convinced that the order passed by the original authority merits no interference, in the light of the distributor agreement between the respondent and the foreign supplier. In any case the original authority has provided sufficient safety measures in his order to secure interest of the Revenue. Accordingly, we find no reasons to interfere with the impugned order.
5. Revenue appeal is rejected.
[Operative part of the order Pronounced in the open Court]
(V. Padmanabhan) (Archana Wadhwa)
Member (Technical) Member (Judicial)
RS
2
C/52600/2015-CU(DB)