Commissioner Of Customs (Import), ... vs M/S. Shivom Industries & Chemicals Pvt. ...

(Arising out of Order-in-Appeal No. 72/2004 (JNCH). Dated 09.07.2004 passed by the Commissioner of Customs (Appeals), JNCH., Nhava Sheva, Mumbai-II)

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), JNCH, Nhava-Sheva : Appellant

VS

M/s. Shivom Industries & Chemicals Pvt. Ltd. : Respondent

Appearance

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

Shri Anil Banalni, Advocate for respondent

CORAM:

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

Date of hearing : 07/08/2015 Date of decision : 07/08/2015

ORDER NO.

Per : P.S. Pruthi

Department has challenged impugned Order-in-Appeal under which the Commissioner (Appeals) has rejected the loading in value of Cloves imported, said to be of Brazil Origin, from US$ 1475 PMT to US$3100 PMT as ordered by the adjudicating authority.

2. In the adjudication Order it is stated that the contract between the suppliers and importer is not approved by the Chamber of Commerce of the producing country i.e. Brazil. The Country of Origin Certificate is not signed by the Chamber of Commerce of Brazil but signed by Singapore Indian Chamber of Commerce as the goods were imported from Singapore. As import of identical and similar goods of Brazil Origin was not noticed, the value could not be determined in terms of Rules 5 & 6 of the Customs Valuation Rules, 1988. As the goods are not seen in the retail market, value could not be determined under Rule 7 also. Therefore recourse was taken to Rule 8. The Public Ledger prices were considered as the basis for arriving at the correct assessable value. The Commissioner (Appeals) held that evidence of importation available in the Directorate of Valuation show a much lower price. Further the department did not dispute the Brazil Origin of the goods. He accordingly set side the order of the adjudicating authority.

3. Heard both sides and considered the submissions.

4. We find that as per A.O., a Certificate of Origin has been produced which is signed by the Singapore India Chamber of Commerce. Although, this certificate is not available with either side, we find from the records that the authenticity of the certificate has not been verified or challenged by the department. Therefore, we find no reason to doubt this certificate. We also see that although the adjudicating authority appears to doubt the certificate, at the same time he says that import of identical and similar goods of Brazil Origin were not noticed. In such circumstances the obvious logical step to take is to see the prices of contemporaneous imports from Madagaskar/Sri Lankan Origin whose prices are published in the Public Ledger . Instead, he straightaway proceeds to Rule 8 of the Customs Valuation Rules. In our view, he has not proceeded through the Rules sequentially and properly as per law. The Commissioner has stated that evidence of importation available in the Directorate of Valuation show a much lower price. In the grounds of appeal, this fact has not been challenged by the department. The department should have first discarded evidence of contemporaneous imports.

4.1. The department has relied upon the case of Commissioner of Customs Vs. Indian Leads Ltd. 2000 (117) ELT 447 (Tribunal) in which it was held that LME prices can be relied upon to arrive at a correct assessable value. The Ld. AR also submitted the judgment in the case of Sudesh Kumar Arora Vs. Collector of Customs 1993 (65) E.L.T. 491 (Tribunal) in which the price of an imported Mercedes Car was decided on the basis of catalogue prices. We note that in the first judgment, the LME price was held to be reliable as it reflected to the prevailing market price. But in the present case no comparison has been made with prevailing market prices. In the second judgment, the catalogue price of Mercedes was considered because it is a definite price published by the manufacturers. Therefore the facts of that case are distinguishable. In the present case no contemporaneous imports have been relied upon to show that the imports have taken place at prices which are published in the public ledger. We find support in our view from the Apex Court judgment in the case of Commissioner of Customs, New Delhi Vs. Prabhu Dayal Prem Chand 2010 (253) E.L.T. 353 (S.C.) in which Honble Apex Court held that details of contemporaneous imports indicating the price notified by the LME had not been referred to at all. In the case of Radha V. Company Vs. Commissioner of Customs, Mumbai 2003 (156) E.L.T 810 (Tri. Mumbai) it was held by the Tribunal that valuation cannot be decided merely on the basis of prices shown in market weekly and public ledger.

4.2. We further find that in this case no enquiries were made as to the origin of the goods. It is a fact that the prices of agricultural produce can vary significantly due to various factors such as quality, size and country of origin. Such factors have not been considered by the adjudicating authority. In our view, the adjudicating authority has not been able to establish undervaluation in the present case.

5. Appeal is dismissed.

(Pronounced in court)

(Ramesh Nair) Member (Judicial)

(P.S.Pruthi) Member (Technical)

SM.

5 Appeal No. C/925/2004