Custom, Excise & Service Tax Tribunal
Cc, Icd, Tkd, New Delhi vs M/S.Polyglass Acrylic Mfg. Co.Ltd on 11 November, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Court No.3
Excise Appeal No.E/1059-1060/2009
Appeal No.C/731/2007
(Arising out of OIA NO.CC(A)Cus,/76 to 83/ICD/D-II/07 dated 26.06.2007 pased by CC, ICD, Tughlakabad, New Delhi)
Date of Hearing: 04.07.2013
Date of pronouncement:05.09.2013
For approval and signature:
Honble Mrs.Archana Wadhwa, Member (Judicial)
Honble Mr.Manmohan Singh, 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?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
CC, ICD, TKD, New Delhi Appellant
Vs
.
M/s.Polyglass Acrylic Mfg. Co.Ltd. Respondent Present for the Appellant:Shri P.K.Sharma, DR Present for the Respondent: Shri Prem Ranjan, Advocate Coram: Honble Mrs.Archana Wadhwa, Member (Judicial) Honble Mr.Manmohan Singh, Member (Technical) INTERIM ORDER NO.390/2013 FINAL ORDER NO. 58304/2013 PER: ARCHANA WADHWA Being aggrieved with the order passed by the Commissioner (Appeals), vide which he has set aide enhancement of value of imported PU coated fabric, Revenue has filed present appeal.
2. We have heard Shri P.K.Sharma, ld.DR appearing for the Revenue and Shri Prem Ranjan, ld.Advocate appearing for the Respondent.
3. On going thorough the impugned order of the Commissioner (Appeals), we find that he has set aside enhancement of the value of imported PU coated fabric by observing that the Revenue has not advanced any argument for rejecting the transaction value, which is required to be accepted in terms of Rule 4 of Customs Valuation Rules. He has further observed that no reasoning stands given by the original adjudicating authority for enhancement of the value. There is no contemporaneous import value available and no expert opinion or any import by another importer as is required for enhancement of the value. He has accordingly relied upon the Tribunals decision as also upon the decision of the Supreme Court in the case of Eicher Tractors Ltd. vs. CC-2000 (122) ELT 321 (SC) for holding that the transaction value cannot be rejected without clear and cogent evidence produced by the department with regard to quality, origin of place and time of import. Inasmuch as the department has not adduced even any iota of evidence to reject the transaction value, neither the department has shown any special relationship between the importer and the supplier, enhancement of value cannot be done.
4. Revenue in the memo of appeal, have referred to an relied upon some import made at ICD, Tughalakhbad as also at Nhavasheva. Further, it is seen that the said clearances are in respect of fabrics varying in thickness. Further, there is nothing to show that the goods are identical in quality as also in respect of import of origin place or manufacturer, etc.
5. Apart from the above, the Revenue has referred to guideline as contained in the Mumbai Customs House letter F.No.S/26-Misc-57/2005-1111 dated 27.3.2006. We find that the Tribunal, while dealing with identical appeal of the Revenue in the case of CC, New Delhi vs. M/s.D.M.International vide its Final Order No.C/A/114/12-Cus dated 30.3.2012 involving the same issue of enhancement of PU coated fabric has taken into consideration the said Mumbai Customs House letter dated 26.3.2006 and has rejected the appeal of the Revenue by observing as under:-
5. We find that there is no dispute that the customs has power to reject the transaction value and enhance the assessable value in terms of Customs Valuation Rules. However, such rejection of transaction value and enhancement of assessable value has to be on the basis of some evidences on record. Contemporaneous imports have to be considered with reference to quality, quantity and country of origin with the imports under consideration. It has been held in a number of decisions that NIDB data cannot be made the basis for enhancement of value. Commissioner (Appeals) has relied upon various decisions of the Tribunal for holding that any enhancement in assessment value, the transaction value has to be first rejected based on legal permissible ground as indicated in the Valuation Rules. He has also referred to Honble Supreme Court decision in the case of Eicher Tractors Ltd. v. CC - 2000 (122) E.L.T. 321 (S.C.) in support of his finding that transaction value cannot be rejected without clear and cogent evidence produced by the department with regard to quality, import of origin and place and time of import.
6. We find that in? their memo of appeal, Revenue has not advanced any such evidences to support their case. Inasmuch as, no evidence for rejection of transaction value stands produced by the authority, we find no reason to interfere with the impugned order of Commissioner (Appeals). Revenues appeal is accordingly rejected.
6. Inasmuch as the identical appeal of the Revenue stands rejected by the Tribunal, we find no reason to interfere with the present impugned order of the Commissioner (Appeals). Accordingly following the earlier order of the Tribunal referred supra, w reject the present appeal of the Revenue also.
(Pronounced in the open court on 05.09.2013) (ARCHANA WADHWA) MEMBER (JUDICIAL) (MANMOHAN SINGH) MEMBER (TECHNICAL) mk C/731/2007
7. I have gone through the draft order passed by the learned Member (Judicial) whereunder appeal filed by the Revenue in the case of M/s Polyglas Acrylics has been rejected. I do not agree with the order and accordingly record my own order.
8. While going through facts on record, it is observed that Commissioner (Appeals) has set aside the enhancement of value of imported PU coated fabric/coated fabric (Flock) on the basis of pea that Revenue has not advanced any argument for rejecting the transaction value. Further that there is no contemporaneous import and no expert opinion.
9. Learned Member (Judicial) has recorded that Department has through relied upon imports made at ICD Tughalakhbad and Nhava Sheva but comparative fabric of same thickness identical nature, quality and origin of manufacturing place has not been taken into consideration. Reliance was placed by learned Member upon Tribunals earlier order is M/s D.M. International - C/A/114/12 Cus dated 30.3.2012.
10. I have examined the matter under consideration is detail looking into orders-in-original(B/Es), Commissioner (Appeal)s order, submissions of Revenue and Respondent. Major issue for consideration is valuation of various type of fabrics such as PU Coated fabric, PUC Coated Fabrics, polyester coated fabrics, coated fabric (flock). Commissioner (Appeals) order is totally vague and with pre-determined mind. He has not referred to enhancement nor quantum of enhancement. Grounds of appeal of Revenue being meritorious deserved consideration
11. In Grounds of appeal marked A Revenue relied on judgement of Calcutta High Court in the case of M/s Atma Ram Aggarwal where High Court prima facie approved the scheme of rejection of transaction value in cases where contemporary higher prices of identical goods are available, since in these cases the customs authorities can dispute that prices actually paid or payable were the values declared in the invoices Honble High Court held that the Customs Valuation (Determination of price of Imported Goods Rule 1988 provide for determination of the method of valuation of importee goods. Rule 3 provided that the value of imported goods shall be the transaction value. It transaction value cannot be determined the value is required to be determined by proceedings subsequently through rule 5 to 8 of the rules.
12. Ground of appeal of Revenue marked B is self explanatory which shows the authority on the basis on which enhancement of value has been proposed. Revenue averred in that ground as under:-
In the present case, the importer has filed eight Bills of Entry for the clearance of PU Coated Fabric, PVC Coated Fabric, Polyster Coated Fabric and Coated Fabric (Flock) of various thickness. In order to achieve uniformity of assessment at various ports for the item PU Coated Fabrics of various thickness, the mater was taken up for detailed study at Mumbai Customs. On the basis of findings of the study, letter F.No.S/26-Misc-57/2005-1111 dated 27.3.2006 was circulated by Mumbai Customs House to various ports. The Valuation of PU Coated Fabrics of various thickness was ascertained based on the major components of this item which involve the base fabric, PU coating, its quality and thickness and further finishing design. Such fixation of value has been upheld by Honble CESTAT vide their Final Order No.640/2003-NB(A) dated 18.11.2003 in the matter of M/s Techno Marketing V/s Commissioner of Customs, Kolkata reported at 2004(164)ELT (113) Tri.-Delhi) in the case of imports of loud speakers. The prices of various thickness were derived and intimated through this letter and the same are being followed at various ports across the country as reflected in the NIDB data. For example, PU Coated fabrics of thickness 0.6 mm was assessed @ Rs 42.37 vide B/E No.768414 dated 22.5.2007 at Mumbai port. The same fabric of thickness 0.6 mm was assessed @ Rs.42.37 at ICD, Tughlakabad vide B/E 595678 dated 18.05.07 and 595548 dated 18.05.2007. Further, the same item was assessed at Nhava Sheva port also @ Rs.42.37 per meter vide B/E No.768311 dated 17.05.2007. Thereafter, it is clear that this item is assessed at various ports uniformly based on the Mumbai Customs House letter. Whenever the value is found to be low, the same is loaded on the basis of this letter as well as the contemporary imports noticed in NIDB data. In the EDI printout for ICD, TKD, it is also observed that PU Coated fabrics of thickness 0.60 mm is assessed @ USD 1 per meter in respect of different importers during the contemporary period. Further, vide B/E No.596242 dated 21.05.2007, the appellant imported PU coated fabric of thickness 0.50 mm @ USD 0.60 per meter which was assessed @ USD 0.80 per mtr. Same item was assessed for some other importer @ USD 0.80 per meter vide B/E No. 578936 dated 15.03.2007 and vide B/E No.583365 dated 02.04.2007.(emphasis supplied)
13. The prices of various thickness were derived by Revenue and informed the respondent being the practice of valuation of various ports across the country. For example PU coated fabric of thickness of 0.6 mm assessed @ Rs 42.37 vide B/E No. 768414 dated 22.5.2007 at Mumbai port. The same fabric of thickness 0.6 mm was assessed @ Rs. 42.37 at ICD, Tughalakhbad vide B/E 595678 dated 18.05.07 and 595548 dated 18.05.2007. Further, the same item was assessed at Nhava Sheva port also @ Rs. 42.37 per meter vide B/E No. 768311 dated 17.05.2007.
Thereafter, it is clear that his item is assessed at various port uniformly based on the Mumbai Customs House letter.
Following facts coming out from Revenues grounds of appeal are also relevant for decision in this appeal
(a) PVC coated fabric, the value is assessed on the basis of contemporary imports for various parts reflected in NIDB data.
(a) PVC coated fabric of thickness 0.53 mm to 0.54 mm Assessed @ Rs. 20.18 at ICD, Faridabad B/E No. 105486 dated 25.5.2007.
(b) -do-
Assessed @ Rs. 22.03 at Cochin Port B/E No. 199628 dated 22.05.2007.
(c) -do-
Assessed @ Rs.21.74 at ICD TKD vide B/E No. 595904 dated 18.05.2007
(b) Coated fabric (flock) value is determined on the basis of contemporary imports in NIDB. Value was increased from USD 1.90 per kg (Imported B/E No. 591323 dated 09.05.2007) to USD 2.00 per kg. Actually this is values which was assessed @ USD 2.00 per kg at S.No. Bill of Entry No. Date Port
1. 468483 17.04.07 ICD, Patparganj
2. 104891 11.04.07 ICD, Faridabad
3. 335620 10.04.07 Calcutta, Seaport
4. 593310 10.05.07 ICD, Tughlakabad
14. I also observe that in all cases as discussed above value was re- assessed and party was informed through CHA the basis thereof. Value was re-assessed in terms of Rules 5 and 6 of the Customs Valuation Rules 1988 after rejecting of transaction value. Importer voluntarily accepted rejection and subsequent enhancement and also deposited the duty without any protest. It is also on record that no request for issue of speaking order, was made by the appellants. It is also referred in Boards Circular No. 90/2003-Cus dated 14.10.2003 that it is not necessary to issue speaking order in all cases whose importer agrees for enhancement of value based on higher contemporaneous value noticed in NIDB.
15. In view of above, I am convinced that sufficient evidence exists on the basis of which enhancement of value has been undertaken. Full details of thickness, details of Bill of entries of various ports and comparative prices have been given which clearly manifest that Revenue has rightly rejected the declared invoices value and have enhanced it based on specific NIDB Data. Further all these values have been accepted by the concerned importers without protest and duties have been discharged and deliveries have been taken. In view of clear facts, Commissioner (Appeal)s order has no legs to stands and is not maintainable at all. Citing of Supreme Court Judgment in the case of M/s Eicher Tractors Ltd. does not come to the rescue of appellants as all parameters as required have been checked before resorting to rejection of transaction value and later enhancing the value based on contemporaneous imports/ data. Learned Member (Judicial) has also not appreciated this elaborate data furnished by Revenue to justify their point. Reliance on tribunals earlier order in the case of M/s D.M. International dated 30.3.2012 does not justify rejection of Revenues appeal as in the present case Revenue has taken all steps as required to justify the enhancements.
16. I have also examined the tribunals judgment in the case of M/s Varun Overseas 2011(273)ELT 271(Tri.-Del) and M/s Techno Marketing 2004(164)ELT113 (Tri. Del) as referred by DR during the proceedings. Both these judgments refer to the issue of arriving at prices by some nodal agency Commissionerate likes Commissioner of Customs (Import) Mumbai after having details from various formations like DRI, Customs Preventive etc and such findings have been agreed by Tribunal.
Para 5 of the decision in M/s Techno Marketing is reproduced for appreciation of concerns of revenue We have perused the records and heard both the sides.
The valuation is being canvassed based on letter dated 11-1-2001 of the Commissioner of Customs (Import), Mumbai to the Chief Commissioner of Customs, Mumbai. The letter states in detail the slab prices noted by various formations like the DRI, the Customs Preventive Mumbai and has worked out a norm for valuation of various brands of loudspeakers. Sony and Pioneer are also brands covered by this letter. Since the values indicated in this letter have been arrived at after considering the prices observed in trade as well as from other sources and the prices are also indicated size wise and brand wise, the prices indicated in the Circular should commend itself for adoption in cases of doubt. We, therefore, are in agreement with the ld. Counsel for the appellants that the valuation of the present consignment also is required to be done based on the values indicated in that letter. It is agreed by both sides that the duty of Rs.4,27,236/- paid by the appellants at the time of provisional release of the goods is more than the duty payable based on the Mumbai valuation. In view of the above, the additional duty demand made cannot be sustained.
17. Similarly in the case of M/s Varun Overseas in the case of 2001 (273) ELT 271 (Tri.- Del) guidelines issued by Commissioner of Customs (Imports) Mumbai for adopting assessable value of counteract under valuation known Chinese brand goods were found acceptable.
Relevant para 5 to 10 are reproduced below for ready references 5. Countering the arguments, learned DR has submitted that the Commissioner of Customs (Imports), New Customs House, Mumbai vide their letter dated 8-9-2005 (copy enclosed) issued guidelines for the valuation of Ball and Roller Bearing. The said guidelines were issued after extensive study on the basis of inputs given by the various wings of the Department viz. Commissioner Nhava Sheva, Directorate of Valuation, Directorate of Revenue Intelligence and other. As per the guidelines, it was proposed to assess Ball Bearing (unpopular Chinese brand) at the minimum cut of price of USD 2 per kg. The value of USD 2 per kg was arrived at after taking into consideration the average cost of raw material, wastage, manufacturing cost and other charges. Subsequently, based on the feedback received from trade and views of various Customs Houses, the Commissioner of Customs (Imports), Mumbai vide their letter dated 12-12-2005 (copy enclosed) further issued revised guidelines and suggested that because of the reduction in steel prices worldwide due to increase in crude steel production in China, minimum cut off price of such bearings be reduced to US $ 1.60 per kg (unpopular Chinese brand bearing). It was further proposed to review the said guidelines on quarterly basis whenever the variations in price of bearing quality steel rods is 20% or more.
6. These guidelines of Commissioner of Customs (Imports) Mumbai have been issued after deliberating upon the issue through extensive and exhaustive studies conducted with cooperation/involvement of Commissioner (Valuation), Mumbai, DG DRI, Delhi, Commissioner of Customs (Prev.). Mumbai, Commissioners of Customs at Nhava Sheva, Chennai, Kolkata, ICD, TKD, New Delhi and Export Promotion Mumbai. The Honble CESTYAT, Northern Bench, New Delhi vide its Final Order No. 640/2003-NB(A) dated 01.11.2003 in the matter of M/s Techno Marketing V. Commissioner of Customs, Kolkata reported at 2004 (164) E.L.T. 113 (Tri.-Delhi) has held the validity of such guidelines, issued by the Commissioner of Customs (Import), Mumbai in that case also in the case of import of loud speakers while accepting that the values indicated in the letter of Commissioner of Customs (Import), Mumbai have been arrived at after considering the prices observed in trade and as well as other sources. Deriving guidance from the above cited order of the Honble CESTAT the prices of Ball Bearing (unpopular brand of Chinese origin) arrived by the Commissioner of Customs (Import), Mumbai after exhaustive and extensive study in collaboration with trade and other sources have got legal bearing on the assessment of Ball Bearing (Unpopular brand Chinese origin) and hence the Bills of Entry in question were assessed at the rate equivalent to USD 1.60 per kg.
7. Regarding importers emphasis on accepting manufacturer invoice in light of the judgment of Honble Supreme Court in the case of M/s Sai Impex, it is found that Honble High Court of Calcutta, in case of Bipin M. Pujara V. Commissioner of Customs reported at 1999 (107) E.L.T. 298 (Cal.) observed that:
It is well settled principle of law that each and every decision of the Apex Court cannot be followed without considering the factual back ground and/or the argument advanced before it, it is always necessary to see what were the facts in the case in which the decision was given and what was the point that has to be decided.
8. The Honble High Court of Calcutta had passed the above said judgment by relying upon the decision of Honble Supreme Court in the case of Union of India V. Dhanwanti Devi reported at 1996 (6) S.C.C. 44. The Honble High Court of Calcutta had also observed that the same decision of Honble Supreme Court had also been relied upon by the Honble Patna High Court in the case of Union of India V. Kasti Nath Mahto AIR 1999 Patna 100), and by the Division Bench of Honble High Court of Calcutta in the case of Jaya Sen V. Sujit Kumar Sarkar (AIR 1998 Calcutta 288). So following the ratio of the judgment of Honble High Court of Calcutta cited supra, it was held that the decision of Honble Supreme Court in case of M/s Sai Impex cited supra is not applicable in the present case. In the case of M/s Sai Impex, the issue before the Honble Supreme Court was whether the manufacturers invoice was genuine or not. Whereas in the instant case of M/s Varun Overseas, the issue is that the imports from the manufacturer and the traders are at the same price as has been found by the worthy Commissioner (Appeals) while passing his order in appeal in question. Further, there are specific guidelines issued by the Commissioner of Customs Imports), Mumbai stipulating assessment of the ball bearings of Chinese origin (unpopular brand) @ $ 1,60 per kg as already explained in proceeding paras.
9. After considering the submissions made by both the sides, we find that admittedly the Commissioner of Customs (Imports), Mumbai has issued the guidelines for adopting the assessable value of the lesser known brand Chinese brand therein. Such guidelines have been issued after taking into account the average cost of material, wastage, manufacturing cost and other charges etc. The legality and veracity of such guidelines stand considered by the Tribunal in the case of Techno Marketing V. CC, Kolkata reported in 2004 (164) E.L.T. 113 (Tribunal) and it was observed as under:-
The valuation is being canvassed based on letter dated 11.1.2001 of the Commissioner of Customs (Import), Mumbai to the Chief Commissioner of Customs, Mumbai. The letter states in detail the slab prices noted by various formations like the DRI, the Customs Preventive Mumbai and has worked out a norm for valuation of various brands of loudspeakers. Sony and Pioneer are also brands covered by this letter. Since the values indicated in this letter have been arrived at after considering that prices observed in trade as well as from other sources and the prices are also indicated size wise and brand wise, the prices indicated in the circular should commend itself for adoption in cases of doubt. As such, in the light of the said guidelines issued by the Commissioner and the decision in the case of Techno Marketing upholding the applicability of such guidelines, we are of the view that the adoption of the assessable value at the rate of US $ 1.60 per kg cannot be faulted upon.
10. In addition to the above, we also note that the appellant authority has taken into consideration the import of ball bearing from the same country i.e. China, assessed to duty at the rate of US $ 1.60 per kg. It stands observed by the appellate authority that the appellants have not been able to produce any other contemporaneous import to show that the value adopted by them is the correct value. As such, keeping in view the commodity like ball bearings and the guidelines issued by the Commissioner and the various other contemporaneous imports, we find no reason to interfere with the impugned order of the lower authorities.
18. In view of above, it clearly comes out that enhancement of prices in eight B/F of M/s Polyglass are rightly made and are legally valid.
19. Accordingly, I conclude that prices as enhanced by the Revenue were correct and sustainable. Accordingly, Commissioner (Appeal)s order is un-sustainable and appeal filed by Revenue is allowed.
(Manmohan Singh) Member (Technical) DIFFERENCE OF OPINION Whether there was basis and creditable evidence on record for enhancement of value of imports declared in respective B/Es and appeal of Revenue has merit to succeed as held by Member (Technical) Or Appeal of Revenue has no basis to sustain on valuation and is required to be rejected (Archana Wadhwa) (Manmohan Singh) Member (Judicial) Member (Technical) K Gupta Per Sahab Singh
23. I have gone through the order passed by Mrs. Archana Wadhwa, Member (Judicial) and also the order passed by Shri Manmohan Singh, Member (Technical) and difference of opinion referred to me by the President.
24. The case was listed for hearing on 18.10.2010. On that date the respondent sought adjournment by submitting letter dated 14.10.2013. Case was adjourned to 01.11.2013 i.e. today. Shri M.S. Negi Ld. DR appears for the Revenue and none appeared for the respondent.
25. Heard Ld. DR who reiterated the grounds of appeal in their appeal filed before this Tribunal.
26. In this case Commissioner (Appeal) has set aside the enhancement of the value of imported PU coated fabrics by observing that Revenue has not advanced any argument for rejecting the transaction value and no reasoning stands given by the original authority for enhancement of value. The Commissioner (Appeal) set aside the Order-in-Original taking a view there was no contemporaneous value and no expert opinion available to justify the enhancement of the value in this case.
27. The respondent have filed bills of entry declaring the assessable values in the bill of entry. Department did not approve the declared value and the Assistant Commissioner enhanced the assessable value in the bills of entry. This enhancement value was accepted by the 17 importer and he paid the custom duty on the enhanced value without any protest.
28. Ld. Member (Judicial) relied upon the decision of Tribunal in case of M/s D.M. International C/A/114/12-Cus dated 30.03.2012 on the same issue in rejecting Revenues appeal. On the other hand Ld. Member Technical relied upon the decision of Tribunal in case of Varun Overseas (Supra) and M/s Techno Marketing (Supra) in upholding the loading of assessable value by the original authority.
29. On going through facts of the case and the decisions relied upon Member Judicial and Member Technical, I find in respondents own case the Revenues appeal regarding enhancement of the assessable value by way of loading the declared value was rejected by this Tribunal as reported in 2011(274) ELT 419(Tri. Delhi). I am therefore of the view that enchantment of the value by the assessing authority is not sustainable in view of the reasons given by the Commissioner (Appeal) in the impugned order and accordingly the Order-in-Appeal passed by the Commissioner is sustainable.
30. I agree with the findings given by Ld. Member (Judicial) and appeal filed by Revenue has no basis and is required to be rejected.
31. Registry is directed to put up the file before referred Bench for further action.
(Order pronounced in the court on 11.11.2013) (Sahab Singh) Member (Technical) Neha Final order No.58304/2013
32. In view of the majority order, the appeal filed by the Revenue is rejected.
(Archana Wadhwa) Member (Judicial) (Manmohan Singh) Member (Technical) ss 19