Custom, Excise & Service Tax Tribunal
Vijaya International Impex vs Commissioner Of Customs ... on 22 June, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No. C/462/2006 [Arising out of Order-in-Original No.5491/2006 dt. 25.09.2006 passed by the Commissioner of Customs (Import), Chennai] Vijaya International Impex Appellant Versus Commissioner of Customs (Seaport-Import) Chennai Respondent
Appearance:
Shri A.K.Jayaraj, Advocate For the Appellant Shri A.Cletus, ADC (AR) For the Respondent CORAM :
Honble Ms. Sulekha Beevi C.S. Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Date of hearing / decision : 22.06.2017 FINAL ORDER No. 41089 / 2017 Per Bench The appeal is against the OIO No.5491/2006 dt. 25.09.2006. The appellant filed Bill of Entry No.274083 dt. 11.08.2006 for the import of skin cover for mobile phone, zipper cover for mobile phone and mobile phone battery and declared total assessable value of Rs.2,03,598/- with duty liability of Rs.82,161/-. The Bill of Entry was assessed under Risk Management System. Duty was paid and goods cleared. Subsequently, SIIB officers intercepted the consignment and investigated into the value of the imported goods. Market enquiry was conducted based on which market prices were determined as under :
S.No. Description of Item Declared Price Market Price
1.
Skin Cover for mobile phone USD 0.10/dozen Rs.30 per piece
2. Zipper Cover for mobile phone USD 0.125/dozen Rs.10 per piece
3. Mobile phone battery (unbranded) USD 0.32/piece Rs.150 per piece
4. Mobile phone battery (unbranded) USD 0.27/piece Rs.150 per piece
2. In view of the apparent disparity between the declared transaction value and the market value, the declared transaction value was proposed for rejection as per Rule 10A of Customs Valuation Rules. The show cause notice dt. 24.08.2006 proposed for reassessing the value of imported goods arrived at on the basis of reverse deductions from the market prices. Accordingly, the goods were proposed for reassessment at value of Rs.28,22,805/- and differential duty of Rs.12,13,521/- was proposed to be demanded. After due process of adjudication, the Commissioner of Customs finalized the enhanced assessable value at Rs.4,36,325/- and demanded the consequential duty liability. The imported goods were ordered for confiscation under section 111 (m) of the Customs Act, 1962 and allowed for redemption with a fine of Rs.75,000/- and penalty of Rs.50,000/-.
3. Aggrieved by the impugned order, the present appeal has been filed.
4. The Ld. Counsel for the appellant Shri A.K. Jayaraj, Advocate submitted that the valuation adopted by the adjudicating authority is without sanction of the Customs law. He argued that the allegation of under valuation has been made in the SCN only on the basis of market enquiry conducted locally and value has been fixed on the basis of reverse calculation. However, in the impugned order, the ld. Commissioner has taken the view that it is not proper to reassess the value by such method. He has considered the value in terms of NIDB data for similar / identical goods imported in the contemporaneous period and determined the value to Rs.4,36,325/-. Ld. Counsel further submitted that it is settled position of law that the Customs authorities are required to accept the transaction value normally and are empowered to reject the same only on the basis of valid reasons enumerated in the Valuation Rules. Market enquiry and NIDB data, cannot be a valid reason for rejecting the declared value. He relied upon the decision of the Apex Court in the case of Eicher Tractors Ltd. Vs - 2000 (122) ELT 321 (SC). Accordingly, he submitted that the impugned order merits to be set aside.
5. Ld. D.R, Shri B. Balamurugan countered the arguments and supported the impugned order. It is the Revenues view that the declared value can be rejected on the grounds of suspicion as has been done in the present case under Rule 10A of the Customs Valuation Rules. He therefore submitted that the impugned order merits to be sustained by dismissing the appeal.
6. Heard both sides. The declared value of the imported goods was proposed to be rejected in terms of Rule 10A of the Customs Valuation Rules, 1988 and was proposed for reassessment by reverse deduction from the local market price ascertained during the market enquiry. However, in the impugned order the Commissioner has adopted totally different line of valuation. He has looked into the valuation of contemporaneous import of identical / similar goods as found in NIDB data and proceeded to step up the value.
We find that Section 14 of the Customs Act, 1962 as well as Customs Valuation Rules do not sanction such a method for redetermination of assessable value. The transaction value is required to be accepted unless there are valid reasons for rejection of such value as provided in the Customs Valuation Rules. In the present case, no valid reasons have been recorded for ignoring the transaction value. Neither the market enquiry nor NIDB date will be a valid ground to disregard the transaction value. In this regard, the decision of the Honble Supreme Court in the case of Eicher Tractors (supra) is specifically applicable to the present case. In the above decision, the Apex Court has held as follows :
"22. In the case before us, it is not alleged that the appellant has mis-declared the price actually paid. Nor was there a mis-description of the goods imported as was the case in Padia Sales Corporation. It is also not the respondent's case that the particular import fell within any of the situations enumerated in Rule 4(2). No reason has been given by the Assistant Collector for rejecting the transaction value under Rule 4(1) except the price list of vendor. In doing so, the Assistant Collector not only ignored Rule 4(2) but also acted on the basis of the vendor's price list as if a price list is invariably proof of the transaction value. This was erroneous and could not be a reason by itself to reject the transaction value. A discount is a commercially acceptable measure, which may be resorted to by a vendor for a variety of reasons including stock clearance. A price list is really no more than a general quotation. It does not preclude discounts on the listed price. In fact, a discount is calculated with reference to the price list. Admittedly in this case discount up to 30% was allowable in ordinary circumstances by the Indian agent itself. There was the additional factor that the stock in question was old and it was a one time sale of 5 year old stock. When a discount is permissible commercially, and there is nothing to show that the same would not have been offered to anyone else wishing to buy the old stock, there is no reason why the declared value in question was not accepted under Rule 4(1).
23. In the circumstances, production of the? price list did not discharge the onus cast on the Customs authorities to prove that the value of the 1989 bearings in 1993 as declared by the appellant was not the ordinary sale price of the bearings imported."
7. In view of the above, the impugned order is set aside and appeal is allowed, with consequential relief, if any, as per law.
(operative part of the order pronounced
in court on 22.06.2017)
(V.Padmanabhan) (Sulekha Beevi C.S)
Member (Technical) Member (Judicial)
gs
3
Appeal No.C/462/2006