Custom, Excise & Service Tax Tribunal
Dow Chemicals International Pvt Ltd vs Kandla on 2 January, 2019
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
Appeal No. C/13402/2013-DB
(Arising out of OIA No. 463-2013-CUS-COMMR-A--KDL dated 15/07/2013
passed by Commissioner of CUSTOMS-KANDLA)
Dow Chemicals International Pvt. Ltd. - Appellant
Vs.
C.C-Kandla - Respondent
Represented by:
For the appellant : Shri Sanjeev Nair, Advocate For the respondent : Shri S.N. Gohil, Supdt. (AR) CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Date of Hearing: 28.11.2018 Date of Decision: 02.01.2019 ORDER NO. A/10005 / 2019 Per: Raju This appeal has been filed by M/s Dow Chemicals International Pvt. Ltd. against demand of Customs duty, interest and penalty.
2. Ld. Counsel for the appellant argued that appellants had imported 'Polypropylene Glycol' falling under customs heading 2905 532 00 from their related supplier namely, M/s Hempshire Chemicals Corp. (a subsidiary of Dow Company). Ld. Counsel argued that on 3 different occasions had they imported consignments of 'Polypropylene Glycol' and each time part of the consignment was sold on high sea sale basis to M/s Vimal Intertrade Pvt. Ltd. The goods imported by them and the said high- sea sale purchaser, M/s Vimal Intertrade Pvt. Ltd. were assessed to custom duty in the following manner:
2 C/13402/2013-DB Sno. WH B/E Qty (MT) Invoice No. and Price Price declared on high No. & Date/Bill No. & Date declared sea sale basis to Date (US $-CIF)subsequent seller by PMT same importer/supplier from the same country (US $ PMT CIF) 1 2886344/ 199.190 06048146/06.01.2011 1141.74 -
3.3.2011 091B dtd 14.2.2011
2. 2914692/ 300.000 06048146/06.01.2011 1141.74 1635 (Value lodged 8.3.2011 091A dtd 14.2.2011 42.29% in the declared value on HSS dale to M/s Vimal Intertrade Pvt.
Ltd
3. 3197950/ 481.830 06048188/01.03.2011 1299.77 -
12.4.2011 700B dtd 31.3.2011
4. 3189064/ 150.000 06048188/01.03.2011 1299.77 1765 (Value lodged 12.4.2011 700A dtd 31.3.2011 35.04% in the declared value on HSS dale to M/s Vimal Intertrade Pvt.
Ltd
5. 3667408/ 272.200 06048229/08.04.2011 1305.87 -
31.5.2011 080B dtd 30.5.2011
6. 3720364/ 200.00 06048229/08.4.2011 1305.87 1836 (Value lodged 07.6.2011 080A dtd 30.05.2011 37.74% in the declared value on HSS dale to M/s Vimal Intertrade Pvt.
Ltd 2.1 Ld. Counsel argued that Revenue has sought to reject the value declared by the appellant invoking Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The Customs sought to invoke Rule 5 of the Customs Valuation (Determination of Value of imported goods) Rules, 2007 to adopt the lowest of the assessable value/ transaction value declared by M/s Vimal Intertrade Pvt. Ltd. as the assessable value. Consequently, a demand of duty was made on the appellant. Ld. Counsel pointed out that while the Show Cause Notice invoked Rule 5 of Customs Valuation (Determination of Value of imported goods) Rules, 2007, the Order-in-Original invoked Rule 11 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 to confirm the demand. He pointed out that even Order-in-Appeal, i.e. the impugned order, also confirmed the demand as per Rule 3(1) read with rule 10 (1) (d) of the Custom Valuation Rules, 2007.
3 C/13402/2013-DB 2.2 Ld. Counsel pointed out that ideally the Customs should have adopted the Customs Valuation Rules sequentially and in that respect, the impugned order as well as Order-in-Original are beyond the scope of Show Cause Notice.
2.3 He further argued that in the Show Cause Notice, Revenue has brought on record import price of similar goods (Propylene Glycol). However, the same data was not used by the Revenue. 2.4 Ld. Counsel however pointed out that they already have SVB order wherein it has been held that the transaction between them and their supplier are not influenced in any manner by their relationship. He argued that in those circumstances, the transaction value should be accepted.
3. Ld. AR relies on the impugned order. He pointed out that the SVB order dated 25.05.2008 in their case only accepts declared value in the circumstances when the contemporary imports at higher price are not noticed. He argued that in the instant case, when contemporary imports at higher prices are noticed, the said SVB order cannot be applied to the instant case.
4. We gone through rival submissions. We find that the appellants have imported Polypropylene Glycol and sold part of the consignment to M/s Vimal Intertrade Pvt. Ltd. Revenue has sought to adopt the assessable value which M/s Vimal Intertrade Pvt. Ltd has declared in their bill of entry as against the assessable value declared by the appellant. It is not in dispute that the goods imported by M/s Vimal Intertrade Pvt. Ltd. are part of the same original consignment and therefore identical in all physical specifications and in terms of country of origin to the goods imported by the appellant. Ld. Counsel has sought to argue that the imports made by 4 C/13402/2013-DB the appellant are at a different commercial level. However, we notice that the quantities imported by the appellant and by M/s Vimal Intertrade Pvt. Ltd. are practically similar and in the some cases, the quantity imported by M/s. Vimal Intertrade Pvt. Ltd is higher than the quantity imported by the appellant.
4.1 However, it is seen that the Show cause notice invoked Rule 5 of the Customs Valuation Rules 2007 whereas the impugned order invoked Rule 3(1) read with Rule 10 (1)(d) of the Customs Valuations Rules 2007. It is apparent that the impugned order has gone beyond the scope of Show Cause Notice. The Order in Original also re-determined the value under any terms of Rule 5 of the Customs Valuations Rules, 2007 but in terms of Rule 11 of the Customs Valuations Rules, 2007. It is apparent that the Order-in- Original as well as Order-in-Appeal goes beyond the scope of Show Cause Notice. The impugned order is set aside and matter is remanded to Adjudicating Authority for fresh adjudication keeping in mind the charges made in the Show Cause Notice. The appeal is allowed by way of remand.
(Pronounced in the open Court on 02.01.2019) (Raju) (Ramesh Nair) Member (Technical) Member (Judicial) DS