Custom, Excise & Service Tax Tribunal
M/S Thermax Ltd vs Commissioner Of Customs (Import) on 18 October, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/819/03 Mum
Arising out of Order-in-Appeal No. S/49-39/2003 VL (JCH) dated 08.07.2003 passed by the Commissioner of Customs (Appeals), JCH, Nhava Sheva.)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Shri. P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s Thermax Ltd.
:
Appellant
Versus
Commissioner of Customs (Import)
Nhavasheva
Respondent
Appearance Shri Bharat Raichandani, Advocate Shri Mayank Jain, Advocate for appellant Shri A Shah, Addl. Commissioner (A.R.) for respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri. P.R. Chandrasekharan, Member (Technical) Date of Hearing : 18.10.2012 Date of Decision : 18.10.2012 ORDER NO.
Per : P.R. Chandrasekharan The appeal is directed against order-in-appeal No. S/49-39/2003 VL (JCH) dated 08.07.2003 passed by the Commissioner of Customs (Appeals), JCH, Nhava Sheva.
2. The appellant, M/s Procter & Gamble Hygiene & Health Care Ltd., Andheri (E), Mumbai imported 1000 Kgs. Nutmeg Oil from M/s V. Mane files SA, France and filed a Bill of Entry No. 784103 dated 09.10.2002. They declared the price of Nutmeg Oil @ Euro 7.17 per kg. The adjudicating authority was of the view that the price declared is very low and, therefore, based on the prices quoted in the Public Ledger, he rejected the transaction value and ordered the value to be enhanced to US$ 46/- per kg in terms of Rule 8 of the Customs Valuation Rules. The appellant preferred an appeal before the lower appellate authority who vide the impugned order dismissed their appeal and hence, the appellant is before us.
3. The learned Counsel for the appellant submits that the appellant had, at the time of adjudication itself, produced before the lower authority a letter from the foreign supplier wherein it was clearly stated that the item supplied by them is a natural identical flavour and not natural nutmeg oil. Further the composition of the product is different from the composition of natural nutmeg oil and also they had given the details of identical products supplied to other customers at a price of EURO 10.50 per kg for a pack of 25 kgs. However, these submissions were not considered by the lower adjudicating authority and the appellate authority.
3.1 The learned Counsel further submits that in as much as the goods imported by them are different from the nutmeg oil referred to in the Public Ledger which reports the price of natural nutmeg oil, the prices are not comparable. He also relied on the decision of this Tribunal in the case of Prabhu Dayal Prem Chand vs. Commissioner of Customs 2003 (156) ELT 922 (Tri. Del) upheld by the Apex Court in the same case as reported in 2010 (253) ELT 353 wherein it was held that enhancement of transaction value cannot be done on the prices reported in LME bulletin. He also relied on the decision of this Tribunal in the case of Milton Laminates Ltd. vs. Commissioner of Customs 2003 (156) ELT 105 (Tri. Del) wherein it was held that enhancement on the basis of prices reported in the Chemical Market Reporter is not permissible under the Customs Valuation Rules, 1988. Accordingly, he pleads for setting aside the impugned order.
4. The learned A.R. appearing for the Revenue reiterated the findings of the lower authorities and submits that the Public Ledger is a well known journal which reports the international prices of natural oils and therefore, there is no harm in relying on the prices reported therein.
5. We have considered the submissions made by both the sides.
5.1 In the instant case, we find from the records that the appellant had produced evidence from the foreign supplier indicating clearly how the product supplied by them is different from the natural nutmeg oil in terms of various parameters, such as difference in composition, optical rotation etc. There was also a clear declaration that the product supplied by them is not nutmeg essential oil but it is only a natural identical flavour. However, the lower adjudicating and the appellate authorities have not given any findings on these documentary evidences submitted by the importer at the time of import itself. Instead, they have blindly relied on the prices quoted in the Public Ledger which reported the price of nutmeg oil. It is a well known fact that the price of nutmeg oil varies depending on the quality of the oil as also on the quantity imported and during the impugned period the prices ranged from US $ 7 per kg. to US $ 50 per kg.
5.2 The adjudicating authority in his order has noted as follows:-
In the instant case the value quoted in the public ledger was substantially higher than the invoice value. Even the contemporary imports of similar goods have been noticed at higher price than the invoice price. If this is true then the adjudicating authority should have arrived at the assessable value by resorting to valuation on the basis of Rule 4 (identical goods) or Rule 5 (similar goods). However, he has not done so. He has blindly followed the prices given in the public ledger without even making an attempt as to how the prices quoted therein is relevant to the goods under the importation.
5.3 The Honble Apex Court in the case of Prabhu Dayal Prem Chand cited supra held as follows:-
We are unable to persuade ourselves to agree with the learned Counsel. It is manifest from the afore-extracted order of the Tribunal that no details of any contemporaneous imports or any other material indicating the price notified by the LME had either been referred to by the adjudicating officer in the adjudication order or such material was placed before the Tribunal at the time of hearing of the appeal. Learned Counsel for the Revenue has not been able to controvert the said observations by the Tribunal. In that view of the matter no fault can be found with the order passed by Tribunal setting aside the additional demand created against the assessee. 5.4 The Tribunal in that case rejected enhancement of the value on the following grounds:-
In the present case as mentioned above, even though there is a reference to contemporaneous import in the order passed by the Deputy Commissioner, no material regarding such import has been placed before us or made available before us by the appellant at any point of time. Therefore, assessment in this case has to be taken as having been made purely on the basis of LME Bulletin without any corroborative evidence of imports at or near that price which is not permissible under law. We, therefore, set aside the impugned order and allow the appeal. 5.5 The facts in the present case before us are identical to those in the above order and, therefore, following the ratio therein, we find that the impugned order is bad in law and needs to be set aside.
6. Accordingly we set aside the impugned order as unsustainable in law and allow the appeal with consequential relief, if any.
(Pronounced in open Court) (Ashok Jindal) Member (Judicial (P.R. Chandrasekharan) Member (Technical) nsk 6