Custom, Excise & Service Tax Tribunal
M/S Impex Steel & Bearing Co vs Cc, Delhi-Iv on 21 January, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Date of hearing/decision: 10.01.2014 For Approval and Signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Customs Appeal No. 69 of 2009 (Arising out of the Order in Appeal No. 02/Cus/Appeal/DLH-IV/2013 dated 15.05.2013 passed by the Commissioner of Customs (Appeals), Delhi). M/s Impex Steel & Bearing Co. Appellant Vs. CC, Delhi-IV Respondent
Appearance:
Shri Prem Ranjan, Advocate for the appellant Ms. Ranjana Jha, Jt. CDR for the Revenue Coram:
Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, Member (Technical) Final Order No. 50199/2014 dated 21.01.2014 Per: Archana Wadhwa:
As per facts on record the appellant filed a Bill of Entry dated 22.01.2013 for clearance of 11225 dozens of Chinese PU Belts with buckles imported by them from M/s Pingyang Wensen Leather Co. Ltd., China against invoice dated 07.12.2012. The value of the said goods was declared by the appellant as US$ 1.5 per dozen which came out at Rs.7.053 per piece. The Commissioner entertained a doubt about correctness of the said value declared by the appellant and accordingly undertook 100% examination on first check basis on 29.01.2013. It was found that the belts were PU belts with buckles having a trade mark Tuff Line. The relevant information was downloaded from internet on various websites like www.cheapestinindia.com and other such websites and it was found that the costs of the belt ranged from Rs. 99/- to Rs. 148/-. Accordingly, Revenue entertained a belief that the value declared by the appellant was liable to be rejected in terms of Rule 12 of Customs Valuation Rules, 2007 and the same is required to be re-determined. Accordingly, vide their letter dated 18.02.2013, the Revenue intimated the appellant about the rejection of the declared value on the ground that inasmuch as the belts were made of PU leather and zinc buckle, the declared value of the same is far below even the raw material cost; that the Tuff Line was a registered trade mark and the belts of the said brand name were being sold on various websites between the price ranging from Rs. 99/- to Rs. 148/-; that NIDB data for the last three months reveal that PU belts with buckles were being assessed at Bombay Port in the range of Rs. 150/- to Rs.200/- per dozen.
2. The appellants responded to the above rejection letter and vide their reply dated 21.02.2013 submitted that the value declared by them is the transaction value, at which they have purchased the goods from the manufacturer and they have imported identical goods from the same supplier at ICD, Tughlakabad vide Bill of Entry dated 19.11.2012 and the value of US$ 1.5 per dozen stands accepted by the Customs authorities and the consignment stands cleared. The same constitute contemporaneous value, which cannot be brushed aside. They also contended that the belts sold at the website are GENUINE LEATHER BELT WITH SMOOTH STEEL FINISH PIN BUCKLE ZAMAK FINISH whereas the goods imported by the appellant were PU belts with simple buckle. They also contested the Revenues stand for referring to NIDB data and submitted that the same does not provide details like import, the lowest value and the type of the goods. The appellant relied upon various decisions of the higher Courts wherein it stand held that in the absence of concrete evidence, the transaction value cannot be rejected and is required to be adopted as the correct assessable value. They also contended that there is neither any allegation nor any evidence that additional consideration has gone back to the foreign supplier.
3. The above pleas and submissions made by the appellant were not accepted by the original adjudicating authority who enhanced the value to Rs. 32.39 per piece. Being aggrieved with the said enhancement the appellant filed an appeal before the Commissioner (Appeals) which also stands rejected by him.
Hence the present appeal.
4. After hearing both the sides, we find that the dispute in the present appeal relates to the correct value of the PU belts with buckles of Chinese origin. As per the appellant, the supplier of the goods is the manufacturer of the same and the value declared by them in the Bill of Entry is the same value which is reflected in the invoice raised by the foreign supplier. The Revenue has not advanced any evidence to show that the said declared value is not correct value. In terms of the provision of 3 of the Customs Valuation Rules, 2007, the value of the imported goods shall be the transaction value and the same is required to be accepted unless there are strong reasons to reject the same.
5. We find that the Honble Supreme Court in the case of Union of India vs. Mahindra & Mahindra - 1995 (76) ELT 481 (SC) has held as under:
Ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs. It is, no doubt, open to the revenue to allege and prove that the apparent is not the real and that the price for the sale of the CKD packs is not the true price, and the price was determined by reckoning or taking into consideration the lumpsum payment made under the collaboration agreement in the sum of 15 million French Francs. The short question is whether the revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price and so section 14(1)(b) of the Act was properly invoked.
As such the transaction value should be taken as correct value unless there is evidence to the contrary. Further, it is well settled law that unless there is additional consideration involved or any of the exception of Rule 4(2) are attracted transaction value cannot be rejected. Reference can be made to the decision in the case of Commissioner of Customs (Bombay) vs. BUREAU VERITAS 2005 (181) ELT 3 (SC) and Tolin Rubber (P) Limited vs. Commissioner of Customs, Cochin 2004 (163) ELT 289 (SC).
6. In the present case, we find that the Revenue has not produced any evidence to show that there was any additional consideration flowing back from the appellant to the foreign supplier, in which case the Revenue is bound to accept the declared transaction value. Apart from that we note that the attention of the lower authorities was drawn to the fact of another import made by the appellant at Tuglagabad wherein the value of the identical goods declared by them @ US$ 1.50 per dozen were accepted and there is no appeal of the Revenue against the said assessment order. If that be so, we really fail to understand as to why the said imports at Tuglagabad, which is in respect of the same very goods and from the same supplier, would not constitute contemporaneous import so as to adopt the same for the purposes of assessment.
7. The Commissioner (Appeals) has referred to the value of the PU fabrics and the value of zinc and has come to a finding that the value of the belts was below the raw material costing. We are afraid that such methodology adopted by the lower authorities cannot be upheld. The said issue stands discussed in detailed by the Tribunal in a recent decision in the case of Imperial Glass Emporium vs. CCE, Kanpur 2013 (297) ELT 49 (Tri. Del.) and stands rejected. Similarly, we note that the appellant has very categorically stated that the goods being sold at the website are genuine leather belts whereas the belts under consideration were PU belts. Admittedly, the leather belts cannot be compared with the PU belts. Similarly, reliance on NIDB data, without going into the details of the goods cannot be held to be appropriate. In fact, as per the declaration of law, the NIDB data cannot be made basis for the enhancement of the value. Reference in this regard can be made to the Tribunal order in the case of Commissioner of Customs, New Delhi vs. Nath International 2013 (289) ELT 305 (Tri. Del.). Further, the reference to the market enquiries wherein belts of Tuff Line was purchased at the cost of Rs. 80/- to Rs. 130/- per piece, by the Revenue officer cannot be held to be a relevant factor in absence of the details of the belts. Admittedly the belts, available in the market would be of various types and even a little difference would make lot of effect on the price range. There is nothing in the said market enquiry to reveal that the belts purchased by the officers were of the same type, which stands imported by the appellant except the fact that the brand name was Tuff Line. Further, the same would reflect the retail sale price in India and would have no bearing on the wholesale price of the manufacturer.
8. In view of the foregoing and in the absence of any evidence on record to reflect upon the undervaluation of the goods, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) Pant 1