Custom, Excise & Service Tax Tribunal
M/S Signal Bearing Co vs Cce, Delhi -Iv on 1 June, 2011
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
Court No.II
C/Appeal Nos.423/2007
(Arising out of order in appeal No. 30/Cus/Appl/DLH-IV/2007 dated 13.4.2007 passed by the Commissioner of Central Excise (Appeals), Faridabad)
Date of Hearing: 1.6.2011
For Approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
Honble Mr.Mathew John, Technical Member
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1. Whether Press Reporters may be allowed to see
The order for publication as per Rule 27 of the
CESTAT(Procedure) Rules, 1982?
2. Whether it would be released under Rule 27 of
the CESTAT (Procedure) rules, 1982 for
publication in any authoritative report or not?
3. Whether their lordships wish to see the fair
copy of the order?
4. Whether order is to be circulated to the
Department Authorities?
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M/s Signal Bearing Co. Appellants
Vs
CCE, Delhi -IV Respondent
Appeared for the Appellant: Ms. Reena Rawat, Advocate
Appeared for the Respondent: Shri K.K. Jaiswal, SDR
Coram: Honble Ms. Archana Wadhwa, Member (Judicial)
Honble Mr. Mathew John, Member (Technical)
ORDER
Per Mathew John:
We find that the appellants are engaged in the import of ball bearings of KG brand from China. The appellants filed a bill of entry dated 23.6.06 along with relevant document seeking clearance of a consignment of ball bearings declaring the assessable value of the goods ranging from US $ 0.056 per piece to US $ 0.153 per piece based upon the transaction value. The Revenue was of the view that the valuation of the said ball bearings is much on the lower side in as much as there was a circular issued by the Commissioner of Customs (Import) Bombay laying down that Chinese origin ball bearings of lesser known brands should be assessable to duty taking the value of US $ 1.60 per kg. Accordingly, the value was increased. The Appellant paid duty on the enhanced value and cleared the goods on payment of appropriate customs duty. In this case, no separate assessment order other than that in the Bill of Entry was issued. The said assessment order on the Bill of Entry was challenged before the Commissioner (Appeals) who upheld the order. Hence the present appeal.
2. Learned Advocate appearing for the appellants has contended that they declared the value of ball bearings on piece wise basis based upon the value as reflected in the invoice. The Revenue on the other hand, has valued the goods on per kilogram basis. The Appellant claims to have arrived at the value on the basis of contract entered by them with the supplier of the goods. They contest that Revenue wrongly applied the value arrived at by the Commissioner of Customs (Import) vide his Circular No. S/26-757/97-VA dated 12.12.2005. It is also the contention of the Learned Advocate that there is no evidence showing any additional payment to the supplier of the ball bearings, and hence the value declared by the importer is required to be accepted.
3. Countering the arguments, learned DR has submitted that the Commissioner of Customs (Imports), New Customs House, Mumbai vide his letter dated 8.9.05 issued guidelines for the valuation of Ball and Roller Bearings. The said guidelines were issued after extensive study on the basis of inputs given by the various wings of the Department. As per the guidelines, it was proposed to assess Ball Bearings (unpopular Chinese brand) at the minimum cut off price of USD 2 per kg. The value of USD 2 per kg was arrived at after taking into consideration the average cost of raw material, wastage, manufacturing cost and other charges. Subsequently, based on the feed back received from trade and views of various Customs Houses, the Commissioner of Customs (Imports), Mumbai vide his letter dated 12.12.2005 further issued revised guidelines and suggested that because of the reduction in steel prices worldwide due to increase in crude steel production in China, minimum cut off price of such bearings be reduced to US $ 1.60 per kg (for unpopular Chinese brand). It was further proposed to review the said guidelines on quarterly basis whenever variations in price of steel of bearing quality varied by 20% or more.
4. These guidelines of Commissioner of Customs (Imports) Mumbai have been issued after deliberating upon the issue through extensive and exhaustive studies conducted with cooperation/involvement of Commissioner (Valuation), Mumbai, DG DRI, Delhi, Commissioner of Customs (Prev.), Mumbai, Commissioners of Customs at Nhava Sheva, Chennai, Kolkatta, ICD TKD New Delhi. The Honble CESTAT, Northern Bench, New Delhi vide its Final Order No. 640/2003-NB(A) dated 1.11.2003 in the matter of M/s Techno Marketing Vs Commissioner of Customs, Kolkata reported at 2004 (164) ELT 113 (Tri-Delhi) has upheld the validity of such guidelines issued by the Commissioner of Customs (Import), Mumbai, in the case of import of loud speakers. While accepting that the values indicated in the letter of Commissioner of Customs (Import), Mumbai have been arrived at after considering the prices observed in trade and as well as other sources. Deriving guidance from the above cited order of the Honble CESTAT the prices of Ball Bearing (unpopular brand of Chinese origin) arrived by the Commissioner of Customs (Import), Mumbai after exhaustive and extensive study in collaboration with trade and other sources have got legal bearing on the assessment of Ball Bearing (unpopular brand Chinese origin) and hence the Bills of Entry in question were assessed by adopting value of USD 1.60 per kg.
5. Regarding importers emphasis on accepting manufacturers invoice in light of the judgment of Honble Supreme Court in the case of M/s Sai Impex reported in 1996 (84) ELT A 47 SC, it is found that Honble High Court of Calcutta, in case of Bipin M. Pujara Vs Commissioner of Customs reported at 1999 (107) ELT 298 (Cal.) observed that:
It is well settled principle of law that each and every decision of the Apex Court cannot be followed without considering the factual back ground and/or the argument advanced before it. It is always necessary to see what were the facts in the case in which the decision was given and what was the point that has to be decided.
6. The Honble High Court of Calcutta had passed the above said judgment by relying upon the decision of Honble Supreme court in the case of Union of India Vs Dhanwanti Devi reported at 1996 (6) SCC 44. The Honble High Court of Calcutta had also observed that the same decision of Honble Supreme Court had also been relied upon by the Honble Patna High Court in the case of Union of India Vs Kasti Nath Mahto AIR 1999 Patna 100), and by the Division Bench of Honble High court of Calcutta in the case of Jaya Sen Vs Sujit Kumar Sarkar (AIR 1998 Calcutta 288). In the case of M/s Sai Impex, the issue before the Honble supreme Court was whether the manufacturers invoice issued by a factory other than the manufacturing factory can be considered as genuine. There was hardly any study conducted with reference to cost of materials involved, the price at which goods were imported by other importers etc.. In the instant case the goods in question are highly prone to under-valuation. Quite often ball bearings are invoiced at prices below the cost price of the raw materials. It is such facts that have been taken into account for issuing the impugned circular.
7. After considering the submissions made by both the sides, we find that admittedly the Commissioner of Customs (Imports) Mumbai has issued the guidelines for adopting the assessable value of the lesser known brand Chinese brand therein. Such guidelines have been issued after taking into account the average cost of material, wastage, manufacturing cost and other charges etc. The legality and veracity of such guidelines stand considered by the Tribunal in the case of Techno Marketing Vs CC Kolkata reported in 2004 (164) ELT 113 (Tribunal) and it was observed as under:-
The valuation is being canvassed based on letter dated 11.1.2001 of the Commissioner of Customs (Import), Mumbai to the Chief Commissioner of Customs, Mumbai. The letter states in detail the slab prices noted by various formations like the DRI, the Customs Preventive Mumbai and has worked out a norm for valuation of various brands of loudspeakers. Sony and Pioneer are also brands covered by this letter. Since the values indicated in this letter have been arrived at after considering the prices observed in trade as well as from other sources and the prices are also indicated size wise and brand wise, the prices indicated in the circular should commend itself for adoption in cases of doubt.
8. As such, in the light of the said guidelines issued by the Commissioner and the decision in the case of Techno Marketing upholding the applicability of such guidelines, we are of the view that the adoption of the assessable value at the rate of US $ 1.60 per kg cannot be faulted.
9. In addition to the above, we also note that the appellate authority has taken into consideration the import of ball bearings from the same country i.e. China by other importersz, assessed to duty at the rate of US $ 1.60 per kg. When the large majority of the importers were conforming to such norms, there is no special reason to adopt a lower value for the imports made by the appellant.
10. In view of the above reasoning, we reject the appeal (ARCHANA WADHWA) Member (Judicial) (MATHEW JOHN) Technical Member MPS* 7