Commissioner Of Customs (Import), ... vs M/S. Shah Brothers & Co

(Arising out of Order-in-Original No. CAO No. 40/2003/CAC/CC/AH dt. 29.5.2003 passed by the Commissioner of Customs (Import), Mumbai)

For approval and signature: Honble Mr. P.S.Pruthi, Member (Technical)

Honble Mr. Ramesh Nair, Member (Judicial)

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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 : No 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?

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Commissioner of Customs (Import), Mumbai : Appellant

VS

M/s. Shah Brothers & Co. : Respondent

Appearance

Shri D.K. Sinha, Assistant Commissioner (A.R.) for Appellant

Shri J.c. Patel, Advocate for respondent

CORAM:

Mr. P.S.Pruthi, Member (Technical) Mr. Ramesh Nair (Judicial)

Date of hearing : 28/07/2015 Date of decision : 28/07/2015

ORDER NO.

Per : P.S. Pruthi

This appeal is directed against the Order-in-Original No. 40/2003/CAC/CC/AH dt. 29.5.2003 passed by Commissioner of Customs (Import), Mumbai.

2. The facts are that the respondent imported a consignment of H. R. Coils and filed two Bills of Entry. In support of the declared price, the importer submitted two proforma invoices No. MW6060 dated 16.09.2002 and MW6062 dated 16.09.2002 showing the rate as US$ 237 C&F issued by M/s. Salzgitter International. In the opinion of Customs, the goods were undervalued in comparison with contemporaneous import as well as in comparison with proforma invoice issued by the same supplier at around the same time to M/s. Manu Impex Pvt. Ltd. The Commissioner in adjudication proceedings held that the goods are liable to be assessed on the basis of transaction value declared by the importer and he dropped the proceedings under Section 111(m) of the Customs Act, 1962.

3. Ld. AR reiterated the grounds of appeal. He adds that the proforma invoices were found to be manipulated because the serial numbers of the proforma invoices were subsequent to the other proforma invoices were of a later date. He also referred to the contemporaneous imports made by M/s. Ruchi Strips & Oil Ltd.

4. The Ld. Counsel appearing on behalf of the respondent showed the letter written by the supplier explaining that the proforma invoices were issued in December 2002. But, the contract was entered into with the importer in September 2002 as they were unable to obtain importation and deliver the goods causing delay in the shipment. This explains the confusion about serial numbers of the proforma invoices.

5. We have carefully considered the submissions made by both sides. The issue to be decided is whether the value declared in the Bills of Entry is acceptable under Section 14 of the Customs Act, read with the Customs Valuation Rules, 1988. We have seen the detailed findings of the Commissioner and note that he has satisfactorily explained every point raised by the Revenue in their grounds of appeal.

5.1. As regards the confusion in the serial numbers of the proforma invoices, we find from the suppliers letter dt.15.5.2003 that contract was entered in September 2002. They were unable to obtain allocation of steel and the shipment to the importer was substantially delayed. When the shipment was available proforma invoice was issued in December 2002 but it refers to the contract date of September 2002. As regards the proforma invoice issued to M/s. Manu Impex Pvt. Ltd. they explain that it was prepared on another computer with a different serial number. Revenue has not been to explain why this explanation should not be accepted.

5.2.. However, even assuming that the proforma invoice does not reflect true values of the goods imported, we find from the packing list that the goods are coils of varying thickness and width and have also arisen from different heats. The quality of the coils vary from each other as is also evidenced by the certificate issued by the manufacturer i.e. S.C. Ispat Sidex S.A. Galati  Romania. In this certificate the thickness is shown as ranging from 1.50mm to 8.00 mm and width 1000 mm to 1500mm. The packing list shows that there is one piece each of a particular thickness, width and heat. Therefore it is clear that the goods are from stock lot. If this is not considered to be a stock lot, we fail to understand what should be considered as stock lot. Further evidence is had from the description given in the proforma invoice where the goods are described as -

rust clauses and/or wet and or stocked at open area and/or unprotected and/or handling gear market and or some edges slightly dented and/or some bands broken/missing and/or similar wording acceptable.

Even the Bill of Lading also clearly indicates that the goods are from stock lot. The description on the Bill of Lading is as follows:

Partly wet before shipment/partly covered by snow partly rust stained up to 6 strapping bands slack, converging, broken turns loosly wound turns telescoped up to 600MM edges of turns dented, buckled, folded, crimped, torn coils shape unstable under coils own weight and/or under external load/side forces, out of round/flattened/bodily distoted colour marking/marking not in line with description herein.

All these facts were extensively considered by the Commissioner and we find no fault in his findings.

5.3. As regards the contention of Revenue that contemporaneous goods have higher value in the case of M/s. Ruchi Strips & Oil Ltd., we notice that those goods were of specific sizes and uniform thickness i.e 1.8mm or 2mm. In the present case before us, as shown above the thickness has a larger range. Another contention of Revenue is that the goods were imported by M/s. Manu Impex Pvt. Ltd. at US$ 328/335 PMT whereas in the case of the appellant the goods were imported at the rate of US$ 237 PMT. Although, Revenue has not enclosed copy of the proforma invoice or commercial invoice in the case of M/s. Manu Impex Pvt. Ltd., we find from the grounds of appeal that the goods imported were plates of different length. Further the plates are shown to have thickness from 6mm to 100mm and of width 2500mm. Thus the goods imported by M/s. Manu Impex Pvt. Ltd. and the goods imported by the respondent are not comparable. Revenue has not been able to prove that values declared by respondent are not acceptable.

6. Impugned order is accepted and appeal is dismissed.

(Pronounced & Dictated in court)

(Ramesh Nair) Member (Judicial)

(P.S.Pruthi) Member (Technical)

SM.

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