Custom, Excise & Service Tax Tribunal
M/S. Kse Ltd vs The Commissioner Of Customs on 7 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeals (s) Involved: C/147 & 148/2007-DB (Arising out of Order-in-Appeal No.528/2006 & OIA No.427/2006 both dated 27.11.2006 passed by Commissioner of Customs, Cochin.) M/s. KSE Ltd. Appellant(s) versus The Commissioner of Customs Cochin. Respondent(s)
Appearance:
Mr. Sandeep Gopalakrishnan, Advocate For the Appellant Mr. Mohammed Yousuf, AR For the Respondent Date of Hearing: 30/09/2016 Date of Decision: 07/10/2016 CORAM:
Mr. Mohammed Yousuf, AR For the Respondent HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Date of Hearing: 30/09/2016 Final Order No. __________/ 2016 Per : Ashok K. Arya
1. M/s. KSE Ltd. is in appeal against the Commissioner (A)s orders No.427 & 528 of 2006, both dated 27.11.2006.
2. The matter pertains to the enhancement of value of the item Copra Expeller Cake where values of US$ 145 and US$ 142 per MT have been enhanced to US$ 158 per MT. The Revenue cites the main reason for enhancement of the value as the contemporaneous imports price of US$ 158 per MT.
3. The learned advocate Shri Sandeep Gopalakrishna, appearing on behalf of the appellant, based on his appeal memorandum and argument notes, submits as follows:
(i) The appellant is a company primarily engaged in the manufacture of cattle feed, where raw material is Copra Expeller Cake (in short CEC). The appellant imports the said raw material from Indonesia, Malaysia and Sri Lanka in bulk loads.
(ii) The transaction value declared by the appellant cannot be rejected on a single contemporaneous import at the Tuticorin Port.
(iii) The Customs has no case that the price declared by the appellant is incorrect due to any special relation between the appellant and the supplier.
(iv) The fixing of prices for CEC depends upon number of factors such as oil content, appearance, colour, powder content, FFA, moisture etc. Further it was pointed out that when CEC is imported in gunny bags, the unit price is lower than those imported in containers (Tuticorin Port).
(v) The appellant produced the following documents in support of the transaction value declared by them:
a. The contract executed between the appellant ndt he importer.
b. Invoices evidencing the transaction value as USD 142 & 145/MT.
c. Letter of credit opened by the appellant in favour of the foreign supplier.
d. Extracts of the relevant portions from the export details published by Central Bank of Philippines in its website for the months of January, February and March 2004. e. A certificate issued by the Indonesian Chamber of Commerce and Industry confirming that the price of CEC during January 2004 was fluctuating.
(vi) The customs authorities have not rejected the aforesaid documents submitted by the appellant. Without rejecting the transaction value declared by the appellant and the documents submitted in support, the customs cannot advert to Rule 6 for fixation of the value.
(vii) Further reliance is placed on Supreme Courts decision in case of Eicher Tractors Ltd. vs. CC, Mumbai: 2000 (122) E.L.T. 321 (S.C.) and CESTAT Bangalores decision in the case of Global Industries vs. CC, Cochin: 2011 (272) E.L.T. 724 (Tri.-Bang.).
4. Revenue has been represented by the learned AR, Shri Mohammed Yousuf, who reiterated the findings given by the lower Revenue authorities.
5. We have carefully considered the facts of the case, the submissions of both the sides and the case laws cited.
5.1 The Revenue has enhanced the value giving the reason that the goods having same description were being cleared through Tuticorin Port at US$ 158 per MT. We find that the subject goods have been imported at Cochin Port and the value cited for comparison by the Revenue is for the goods which were imported at Tuticorin Port. Further, Revenue does not mention anything about quality and quantity of the goods with which the comparison has been made.
5.2 The importer-appellant produced the relevant documents in support of the invoice value, however, the lower Revenue authorities did not give any reasons for rejecting the contents of the said documents.
5.3 Considering above facts, the orders of the lower Revenue authorities do not have sufficient legal justification to sustain the enhancement of the values; the enhancement of values ordered by the impugned orders appears to be more in the nature of an arbitrary act; and therefore, it is unsustainable. The Honble Supreme Courts decision in the case of Eicher Tractors (supra) and CESTAT Bangalores decision in the case of Global Industries (supra) support our stand that the impugned orders are not sustainable. Therefore, the impugned orders are hereby set aside and both the appeals are allowed with consequential benefit, if any.
(Order was pronounced in Open Court on .......................) ASHOK K. ARYA TECHNICAL MEMBER S.S. GARG JUDICIAL MEMBER rv 1