Custom, Excise & Service Tax Tribunal
Tiruchirapalli vs Tamilnadu Newsprint And Papers Limited on 21 November, 2019
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL, CHENNAI
REGIONAL BENCH - COURT NO. - III
Customs Appeal No. 41019 of 2017
(Arising out of Order-in-Appeal No.43 to 46/2017 dt.14.02.2017 passed by the
Commissioner of Customs & Central Excise (Appeals-2), Tiruchirappalli)
Commissioner of Customs Appellant
No.1, Williams Road, Cantonment,
Trichy 620 001
Vs.
M/s.Tamilnadu Newsprint and Papers Ltd. Respondent
Kagithapuram,
Karur
WITH
(i) Customs Appeal No.41020 of 2017(CCE Trichy)
(ii) Customs Appeal No.41021 of 2017 (CCE Trichy)
(iii) Customs Appeal No.41022 of 2017 (CCE Trichy)
(Arising out of Order-in-Appeal No.43 to 46/2017 dt.14.02.2017 passed by the
Commissioner of Customs & Central Excise (Appeals-2), Tiruchirappalli)
APPEARANCE:
Ms. K. Komathi, JC (AR) For the Appellant
Shri R.R. Padmanabhan, Consultant For the Respondent
CORAM :
Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial)
Hon'ble Shri P. Anjani Kumar, Member (Technical)
Final Order No. 41405-41408 / 2019
Date of Hearing: 21.11.2019
Date of Decision: 21.11.2019
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PER P. Anjani Kumar
Heard both sides and perused the records of the case.
2. Briefly stated the facts of the case are that the appellants
M/s.Tamiladu Newsprint and Papers Ltd. have imported non-coking
coal and Bituminous coal under various of Bills of Entry; The Bills of
Entry were provisionally assessed for want of documents and test
reports. The Bills of Entry were subsequently finalized and Asst.
Commissioner of Customs sanctioned refunds totaling to
Rs.9,62,728/- and however credited the same to the Consumer
Welfare Fund. The Asst. Commissioner held that importer could not
prove the excess duty paid and thus could not satisfy the conditions
of Section 18 (5) of Customs Act, 1962. The Asst. Commissioner has
also held that the high sea sales value is lower than the price at
which the first stage supplier had purchased the goods from
overseas. Aggrieved by the orders of the Asst. Commissioner,
appellants have filed appeals before Commissioner (Appeals-II),
Trichy who vide the impugned orders held that financial status of a
company is reflected in the balance sheet and the balance sheet
clearly mentions the amount receivable by them under various
subheadings and entries which itself is an ample proof that the claim
is not hit by unjust enrichment. Commissioner (Appeals) has also
held tht addition of 2% notional high see sales commissions is also
not proper oas the transaction value is available. Aggrieved by the
orders of the appellate Commissioner, Revenue in in Appeal vide the
present Appeals C/41019-41022/2017.
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3. Ld. A.R for the department contends that though the
Commissioner (Appeals) has certified that the excess amount of duty
has been shown separately in the books of account of the company
immediately however general entries have been made after two to
seven months from the dates of payment of duty. The contradiction
has not been explained by the importer properly. Therefore, the
original authority was correct in holding that the appellants have not
produced sufficient documentary proof as required under Section 18
(5) of Customs Act, 1962. Ld. A.R also contends that in terms of
Circular No.32/2004-Cus. dt.11.5.2004, the importer was required to
furnish the entire chain of documents such as original invoices, high
see sale contracts, details of certain charges/ commission paid etc. to
establish a link between the first international transfer of goods to the
last transaction. Ld. A.R submits that it is evident that the final
import value paid or payable by the appellants cannot be less than
the price at which the shipper abroad sold the cargo to high sea
seller. Ld. A.R also reiterates the findings of OIO.
4.1 Ld. Counsel for the respondents submits that it is not correct to
say that the amounts reflected in the invoices issued by their sellers
were representative of the true transaction value; in terms of the
contract there was provisions for variation of the quantity and the
value of the imported coal on the basis of GSV value as well as
moisture content. Under these circumstances, the provisional
assessments were made and on finalization, the value actually paid
or payable by them should have been considered by the original
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authority. Ld. Counsel also produced a chart showing vessel wise
value at which they have transacted the purchase of coal from their
suppliers. He places transaction in each of the cases right from the
original buyer to supplies to them made by M/s.Gupta Coal as per the
purchase orders. He displays the price at which M/s.Gupta Coal have
supplied the coal to them was in most of the cases more than original
price at which the first international buyer has purchased the goods;
the variation of the value of the goods was due to the fact that the
quantity varies due to GSV value and calorific value. He submits as
under :
BYRON MILLION COMMON ANDROS
TRADER SPIRIT
TRANS ASIA 66.5 72.10 71.00 63.00
TO SWASTIK
COAL (USD)
SWASTIK 67.5 73.10 72.00 64.00
COAL TO
GUPTA
COAL (USD)
GUPTA COA 70.05 70.05 70.05 70.05
TO TNPL AS
PER
PURCHASE
ORDER
(USD) HSS 73.074 72.408 72.712 71.7078 ADJUSTED RATE (USD) FINAL 71.72 72.8367 72.99 71.43 INVOICE RATE (USD) B/L QTY 50624.664 70074.000 39813.000 72000.000 (MT) FINAL QTY 47018.968 65665.174 37132.977 66913.785 (MT) 4.2 Ld. Counsel submits that the department cannot traverse beyond the provisions of Section 14 of the circular issued by the Board. Ld. Commissioner (Appeals) after going through the records 5 of the case and the legal position thereof has correctly arrived at the conclusions.
5. On hearing the rival arguments, we find that respondents have discharged duty on the transaction value arrived on the basis of final quantity of coal in terms of the contract. It is not the case of the department that the respondents have paid any amount over and above such transaction value. Therefore, in terms of Section 14 of the Customs Act, 1962, the transaction value requires to be accepted as done by the Ld. Commissioner (Appeals). We also find that in terms of the above cited circular, high sea sales commission cannot be notionally arrived at 2% particularly, when there is documentary proof to that extent. We find that Ld. Commissioner (Appeals) has found as follows :
"08. With respect to the issue of adding 2% as notional value for High Sea Sales. The Board's Circular no.32/2004-Cus dated May 11.2004 clearly states inclusion of 2% commission on notional basis may not be appropriate. In the instant case the value of the goods is only provisionally determined as per High Sea Sales. However as per the Contract any adjustment in price is done for the GCV, Ash content, Moisture contents at TNPL site which decides the price to be paid to the seller and final invoice is issued. The rejection of the final invoice value by the LAA because it is lower than the High Sea Sale invoice is totally against the principle of Transaction Value. The importer has produced final commercial invoice. Bank payment certificate before the LAA however they have been ignored. Board circular 32/2014 clarifies that the entire chain of documents to establish the link between the first International Transfer of goods to the last transaction are required to be furnished. I find that the supplier has raised a final invoice which is the price actually paid or payable on the said goods and this constitutes the transaction value. M/s.TNPL have also produced a payment certificate from the bank which confirmed the payment of the amount mentioned in the final invoice. In the light of such clear-cut proof of transaction value, loading of a notional 2% High Sea Sales commission on the shippers invoice is not legally tenable. The LAA may therefore arrive at the value in terms of the final invoice supported by the bank payment certificate 6 and finalise the assessment and sanction the refund accordingly. It has already been held that the principle of Unjust Enrichment does not apply to the four cases which forms part of this appeal proceedings."
Ld. Commissioner (Appeals) has categorically held that there is a lapse of two to seven months in posting the general voucher vis-a-vis the payments made as duty is only an assumption and the balance sheet as on 31.3.2016 very clearly shows these amounts as receivables under current assets from the department and that this was an ample proof that the application for refund is not hit by unjust enrichment.
6. In view of the above, we find that there is no reason as to why we should interfere with the order of the Ld. Commissioner (Appeals). We find that the orders passed by Commissioner (Appeals) are legally tenable and sustainable.
7. In view of the above, all the four appeals filed by the department are rejected.
(Operative part of the order pronounced in open court) (SULEKHA BEEVI C.S.) Member (Judicial) (P. ANJANI KUMAR) Member (Technical) gs