Custom, Excise & Service Tax Tribunal
M/S. Hyundai Motor India Ltd vs Cc (Port-Import), Chennai on 4 December, 2017
41181IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
C/347/2010
(Arising out of Order in Appeal C. Cus. No. 486/2010 dated 04.06.2010 passed by the Commissioner of Customs (Appeals), Chennai).
M/s. Hyundai Motor India Ltd. : Appellant
Vs.
CC (Port-Import), Chennai : Respondent
Appearance Shri S. Murugappan, Advocate For the appellant Shri B. Balamurugan, AC (AR) For the respondent CORAM :
Honble Smt. SULEKHA BEEVI C.S., Member (Judicial) Honble Shri MADHU MOHAN DAMODHAR, Member (Technical) Date of Hearing/Decision: 04.12.2017 FINAL ORDER No. 43084/2017 Per Bench The appellants are engaged in manufacturing motor vehicles. They imported cars from M/s. Kia Motors Corporation, Korea and filed Bill of Entry dated 12.01.2010, declaring the value of the goods on CIF basis. The goods were allowed for clearance based on the Bill of Entry. The appellants paid total Customs duty of Rs.25,85,494/-. Thereafter, on the ground that as per Rule 10(2) of the Customs Valuation (Determination of value of the imported goods) Rules, 2007, the assessable value has to be arrived by restricting the air freight component to 20% of the FOB value of the goods, the appellant pleaded for refund of differential duty, as the freight component paid on CIF basis exceeded 20% rate of FOB value. Though the appellant requested for reassessment of the Bill of Entry taking only 20% of the FOB value as freight component, the same was not allowed. They filed appeal before the Commissioner (Appeals), who rejected the plea of the appellants. Hence this appeal.
2. On behalf of the appellant, Ld. Counsel Shri S. Murugappan, submitted that in terms of Rule 10(2) of Customs Valuation (Determination of value of the imported goods) Rules.2007, the cost of transport of the imported goods shall not exceed 20% freight on FOB value of the goods. The amount of duty paid by the appellant exceeds the said 20%. Consequently, the appellants are eligible for refund of excess duty of Rs. 8,75,356/- erroneously paid by them. He submitted that the said issue stands settled by the Tribunal in the case of Tecno Doors Pvt. Ltd. Vs. CC (Air), Chennai vide Final Order no. 42720/2017 dated 01.11.2017, wherein the Tribunal has held that when the costs of transportation of the imported goods was ascertainable, for the purpose of adding freight element to the assessable value, only 20% of the FOB value has to be adopted in respect of the goods imported by air.
3. Ld. AR, Shri B. Balamurugan reiterated the findings in the impugned order.
4. Heard both sides.
5. For better appreciation Rule 10 (2) of the Customs Valuation (Determination of value of the imported goods) Rules, 2007 is reproduced as under:-
For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include -
(a) the cost of transport of the imported goods to the place of importation;
(b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and
(c) the cost of insurance :
Provided that in the case of goods imported by air, where the cost referred to in clause (a) is ascertainable, such cost shall not exceed twenty per cent of free on board value of the goods. In terms of the said Rule 10(2), the imported goods shall be assessed by adding 20 percentage of FOB value as air freight. The appellant has paid total duty of Rs. 23, 85,494/-. The duty payable under the proviso as stated above would be Rs.15,09,938/-. Hence, the appellants have paid excess duty of Rs. 8,75,356/-. The Tribunal in the above stated final order dated 01.11.2017 analyzed the issue and held that the freight element has to be restricted to 20% of the FOB value when the cost of transportation of the goods is ascertainable and the transportation is by air. The relevant portion of the decision is as under:-
4. Heard both sides and have gone through the facts. There is broad agreement on the aspect of quantum of freight cost that will require to be added. It is a fact that as per the Customs Valuation Rules as in force during the material period, even when the cost of transportation of imported goods was ascertainable, for the purpose of adding freight element to form part of the assessable value only 20% of the FOB value would be adopted in respect of goods imported by air. We order accordingly. However for the limited purpose of redetermining the revised differential duty liability after limiting the freight cost to 20% of the FOB value, the matter is being remanded to the original authority.
6. Following the same, we are of the view that the appellant is eligible for refund. The impugned order rejecting the refund is set aside and the appeal is allowed with consequential relief to the appellant.
(Operative part of the order pronounced in the open Court on 04.12.2017)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
BB
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