Customs, Excise and Gold Tribunal - Delhi
Oswal Fats And Oils And Ors. vs Cc on 21 August, 2007
Equivalent citations: 2007(123)ECC56, 2007(149)ECR56(TRI.-DELHI)
ORDER C.N.B. Nair, Member (T)
1. The appellant is a manufacturer of soap. It imports Palm Acid Oil for use in the said manufacture.
2. Nine consignments imported by the appellant during the period July to December 2000 were provisionally assessed based on the purchase prices and released. Subsequently, for finalization of the provisional assessments, transaction values were rejected and it was ordered that these consignments shall be assessed at a uniform assessable value of 260 US $ PMT, even though purchase prices varied from 113.50 US $ to 170 US $. The consignments were also confiscated for the offence of misdeclaration of value (Section 111(m) of the Customs Act) and penalties imposed {Section 112 (a)}.
3. The reason for adopting the higher price for final assessments is that two imports of Palm Acid Oil at 260 US $ had been made in July and October 2000 by another party. Thus, the basis for the order is the price of comparable imports.
4. The contention of the appellant is that its imports were under specific contracts from Indonesia and Malaysia and that the contracted prices were arrived on totally commercial considerations and that such transaction values have to be accepted for the purpose of assessment in terms of Rule 4 of Customs Valuation Rules. The appellant also tried to distinguish its imports by pointing out that specifications were different in the case of appellants imports. It was the contention that appellant makes cheap quality laundry soap and the Palm Acid Oil used for that purpose is of inferior quality.
5. The appellant also had a case that the Revenue authorities cannot choose the highest rates noticed under the two afore-mentioned bills of entry, since the price of imported Palm Acid Oil varied vastly during the said period between US $ 200 and US $ 113 PMT. The appellant's grievance was that imports at lower values (US $ 113 PMT) had also been accepted for valuation and assessments and that the price of 260 US $ was an exception.
6. The above contentions of the appellant were rejected with a finding that the information relied upon by the appellant is not relevant "when relied upon consignment of contemporary import is available". Present appeals are directed against orders to the above effect.
7. The contentions of the appellant in the present appeals are the same as the ones raised before the Commissioner. It is also the submission of the ld. Counsel for the appellant that it is well settled - Eicher Tractors Ltd. v. CC) that transaction values have to form the basis of assessment, except in the cases specifically mentioned in Rule 4(2) of Custom Valuation Rules. Reliance is also being placed on the judgment of the Hon'ble Supreme Court in the case of Basant Industries v. Addl. Collector of Customs, Bombay in support of the contention that varying import prices is not sufficient for the purpose of rejecting transaction values.
8. Ld. SDR however, would submit that it is well settled CC, Calcutta v. South India Television (P) Ltd. 2007 (214) ELT 3 (SC) that invoice prices are not sacrosanct and that assessments can be made based on the comparable value of imported goods in appropriate cases. He would point out that the appellant's contention that its imports were of inferior variety Acid Palm Oil also is not acceptable since the compared imports were also of Palm Acid Oil, that too for soap making.
9. It is clear from the data on record that import prices varied vastly (between 260 US $ and 130 US $) during the period in question. According to the data-presented by the appellant, price varied between 200 US $ and 113, 260 US $ was an exception. It is clear that there existed no 'one fixed price' for Palm Acid Oil during the period and price fluctuation was the rule. In a case, where price variation is the rule and the variation is in a vide range, a particular transaction can be rejected only if there is evidence or information that the transaction in question was not a commercial transaction or that the price charged was lower on account of any of the reasons which have been taken note of in Rule 4(2) of Customs Valuation Rules. Simple replacement of transaction value with the highest import price of comparable goods is not permitted by Section 14 or Rules of Customs Valuation. That would be contrary to the market reality that prices varied from seller to seller and sale to sale. In the present case, there is no specific evidence on record which brings out that the transaction between the appellant importer and its foreign suppliers located in Malaysia and Indonesia had been influenced by any noncommercial considerations and that invoiced prices did not reflect or reveal the real transaction values. The legal position is clear that transaction value shall be accepted for valuation. In these facts and circumstances, we are of the opinion that transaction values were required to be accepted for assessments to Customs duty and the orders to the contrary are illegal. There is no basis for the finding of mis-declaration of value also. A purchase at a higher price by another importer does not render lower prices false.
10. In the result, the appeals succeed and are allowed with consequential relief, if any, to the appellant.
(Dictated & pronounced in open Court)