Custom, Excise & Service Tax Tribunal
Vidya Enterprises vs Commissioner Of Customs ... on 22 June, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No. C/320/2007 [Arising out of Order-in-Original No.6483/2007 dt. 9.7.2007 passed by the Commissioner of Customs (Seaport-Export), Chennai] Vidya Enterprises Appellant Versus Commissioner of Customs (Seaport-Export) Chennai Respondent
Appearance:
Shri A.K.Jayaraj, Advocate For the Appellant Shri B. Balamurugan, AC (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. 41093 / 2017 Per Bench The appeal is against the Order No.6483/2007 dt. 09.07.2007. The appellant filed Bill of Entry No.748686 dt. 27.01.2005 for clearance of Sony and Pioneer Brands of Car Cassette / CD players and Speakers. Along with Bill of Entry, the appellant also filed (1) copy of commercial Invoice No.54890 dt. 20.1.2005 (2) copy of Packing List and (3) copy of Bill of Lading 21.1.2005. During the course of assessment, it was felt that the value declared by the importer for Sony and Pioneer brand CD players and speakers was very low in comparison with the contemporaneous imports. Accordingly, the Bill of Entry was taken up for further investigation by the SIIB. As part of the investigation, the customs authorities obtained the following relevant data :
(1) The imports of Car Cassette/ CD players by M/s.Sony India Pvt. Ltd. were obtained and the prices declared in the present import were compared.
(2) The department obtained the price list of 'Sony'.
A comparison of unit price declared by the importer and the unit price of goods as given in the packing list of M/s. Sony India Pvt. Ltd. showed that the value declared for the present import was substantially lower. Further, since the Retail Sale Price (RSP) declared by the importer also appeared to be very low, a detailed market enquiry was conducted to ascertain the actual RSP of the imported goods. It was found that the actual RSP upon market enquiry was found to be much higher than RSP declared in the Bill of Entry.
In respect of Pioneer brand, since there was no authorized distributors/retailers in Chennai or New Delhi, the maximum RSP for similar/identical goods were ascertained through market enquiry.
2. Based on the above, Customs authorities took the view that the declared value of Rs.9,51,593/- of the imported goods were to be rejected and value assessed to Rs.46,52,763/-. Accordingly, SCN was issued. After due process of adjudication, impugned order came to be passed rejecting the declared value and redetermining the assessable value as proposed in the SCN. Differential duty was ordered to be paid amounting to Rs.14,13,529/-. 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.3 lakhs and penalty of Rs.5 lakhs. Aggrieved by the impugned order, present appeal has been filed.
3. Appearing for the appellant, Shri A.K. Jayaraj, Ld. Advocate submitted that the goods were procured by the importer from the supplier in Singapore on the basis of purchase order dt. 12.01.2005. The purchase order/packing list as well as the export invoices tally perfectly with the Bill of Entry and a subsequent examination report of Customs authorities. As such no misdeclaration can be alleged against the importer. He further argued that the basis adopted by the Customs authorities for disregarding the value has no sanction in law. The evidences produced by Customs has been used to sustain the allegation of undervaluation in the form of price list, catalogue and market enquiry reports for Sony and Pioneer brands. There is no sanction in the Customs Valuation Rules to determine the value on the basis of such evidences. 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. He relied upon the decision of the Apex Court in the case of Eicher Tractors Ltd. Vs CC Mumbai - 2000 (122) ELT 321 (SC) and submitted that even the price list of the foreign supplier is not a proof of transaction value. Accordingly, he submitted that the impugned order merits to be set aside.
4. 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 (Determination of price of Import Goods) Rules, 1988. He submitted that the impugned order merits to be sustained since the evidence produced by Customs substantially indicates under valuation of the imported goods.
5. Heard both sides. The main crux of the departments allegation for rejecting the transaction value is on the following grounds :
(i) Contemporaneous imports, price list of Sony India Pvt. Ltd., market price of comparable imported goods sold in the local market.
(ii) In respect of Pioneer brand goods, in the absence of price list or contemporaneous imports, the evidence available in the form of market enquiry has been produced by the Customs authorities.
During the course of the assessment and adjudication proceedings, the Customs authorities have arrived at the value of the imported goods by deduction method from the market price. It is settled position of law that in terms of Section 14 of the Customs Act, 1962, the transaction value is required to be accepted as above. The value can be determined by resorting to Customs Valuation Rules only in those cases when the transaction value is rejected for valid reasons. Only thereafter, the value shall be determined by proceeding sequentially through Valuation Rules. In the present case, the transaction value has been sought to be rejected only on the basis of the price list, catalogue, market enquiry as well as contemporaneous import of some of the items. All these grounds can at best raise a suspicion that value declared for assessment may be less. However, none of these can be considered as valid reasons for ignoring the transaction value as has been held by the Honble Supreme Court in the case of Eicher Tractors (supra). Similar views have also been taken by the apex court in several other cases. This Tribunal has also been following these decisions. In Eicher Tractors case, the Apex court has categorically 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."
6. By following the decision of the Apex court (supra), we set aside the impugned order and allow the appeal, with consequential relief, if any.
(Operative part of the order pronounced
in court on 22.06.2017)
(V.Padmanabhan) (Sulekha Beevi C.S)
Member (Technical) Member (Judicial)
gs
5
Appeal No.C/320/2007