Suvee Impex Pvt Ltd vs Commissioner Of Customs And Service Tax ...

C/28317/2013-DB, C/28318/2013-DB, C/28319/2013-DB, C/28320/2013-DB, C/28321/2013-DB, C/28322/2013-DB, C/28323/2013-DB, C/28324/2013-DB, C/28325/2013-DB, C/28326/2013-DB

[Arising out of Order-in-Appeal No. 375-384-2013 dated 08/09/2013 passed by Commissioner of Customs (Appeals), BANGALORE ]

For approval and signature:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Suvee Impex Pvt Ltd Jai Tulsi Chambers, No.101, 1st Floor, No.12, K.h.road, BANGALORE - 00 KARNATAKA Appellant(s)

Versus

Commissioner of Customs and Service Tax Bangalore-cus C.R. BUILDING,QUEENS ROAD, P.B.NO. 5400, BANGALORE, - 560001 KARNATAKA Respondent(s)

Appearance:

Mr. V.M. Doiphode, Adv

V.M. DOIPHODE & CO.

285,Shahid Bhagat Singh Road, Chamber Nos 44 & 45, 5th floor, Sucheta Niwas, Fort, Mumbai - 400001 Maharastra For the Appellant Mr. Mohammad Yousuf, A.R. For the Respondent

Date of Hearing: 08/09/2015

Date of Decision: 08/09/2015

CORAM:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 21917-21926 / 2015

Per : ARCHANA WADHWA

All the appeals are being disposed of by a common order as the issue involved in all of them is identical.

2. As per facts on record, the appellant entered into sales contracts with various foreign suppliers of PVC coated polyester fabric located in China. The contracts were for huge quantity and apart form giving the unit price of the goods, the total contract value was also reflected in the contracts.

3. However, on presenting bill of entry for clearance of the first consignment of the goods in question, Revenue entertained a view that the goods were under-valued. Accordingly proceedings were initiated against them for enhancement of the same. During adjudication, the appellant contended that the value as declared in the invoices issued by the foreign supplier is the genuine transaction value in terms of the contract entered in to between the appellant and the foreign supplier. They also produced certain evidences of contemporaneous imports where the value accepted by the Customs Authorities was less than the value as declared by the assessee.

4. However, the original adjudicating authority observed that the contemporaneous imports referred to by the assessee was in the month of January and February 2013 whereas after the said period, the value in respect of other importers has also been enhanced based upon the letter of Commissioner of Customs (Imports) Nhava Sheva, Maharashtra communicated on 12.03.2013, detailing a formula for PVC coated fabric, and arriving at a minimum value. As such, he enhanced the value in all the cases.

5. On an appeal against the above order, the appellate authority observed that such methodology of valuation adopted by the Assistant Commissioner is legally sustainable in the absence of contemporaneous imports of identical goods. Accordingly, by relying upon the letter of Commissioner of Customs (Import), Nhava Sheva, he rejected the appeal. Hence the present appeals.

6. After carefully considering the submissions made by both sides duly represented by Shri V.M. Doiphode for the appellant and Shri Mohammad Yusuf for the Revenue, we find that the original adjudicating authority has not disputed the fact that in January and February 2013, the imports of identical products were made at a price which is less than the price declared by the appellant. However, he refers to certain other imports made subsequently at ICD, White Field Bangalore where the value was enhanced by the Customs Authorities based upon the clarification of Commissioner of Customs (Imports), Nhava Sheva Bombay and holding that as the price for contemporaneous imports of similar goods, he enhanced the price. To the same effect is the order of Commissioner (Appeals).

7. There is no reference by the Revenue to any contemporaneous import declaring the price of identical goods at a higher value. The only reference is to those imports where the value was enhanced by the Customs Authorities based upon the letter of Commissioner of Customs (Imports) Nhava Sheva, Bombay. Merely because the value was enhanced by the Customs, the same would not become contemporaneous imports. In the present case also, the Customs have enhanced the value and the present enhancement cannot be considered to be contemporaneous for the other subsequent imports.

8. The value declared by the appellant is on the basis of the contracts entered into by them with the foreign supplier. There is no evidence on record that the value as declared in the invoices is not the correct value or is not in terms of the contract or any under-hand consideration has flown back to the supplier. The reliance on the letter of Commissioner of Customs (Imports) Bombay, which in any case has not been placed before us cannot be adopted as the sole reason for enhancement of the price. The Tribunal in the case of CC Chennai Vs Novelty Exports [2003 (154) ELT 458 (Tri-Che)] has observed that the cost factor based on price of imported raw materials cannot be used for rejection of declared value where the Revenue does not produce evidence to rebutt the correctness of the same. The Honble Supreme Court in the case of CC Calcutta Vs South India Television (P) Ltd. reported as [2007 (214) ELT 3 (S.C.)] has observed that casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods and under-valuation has to be proved by evidences or information about comparable imports. The Honble Supreme Court in the said case rejected the Revenues reliance on the export declarations made by the supplier of the goods. Similarly in the case of CC, ICD, TKD Delhi Vs B.S Smelters [2013 (297) E.L.T. 211(Tri.Del)], it was observed that value cannot be enhanced on the basis of circular which in turn is based upon the cost of the raw materials and the manufacturing cost. In the case of CC (Import) Nhava Sheva Vs Bharathi Rubber lining & Allied Services (Pvt) Ltd [2013(287)E.L.T. 124 (Tri-Mum)], enhancement of price based upon the DGOV circulars was held to be as overriding the provisions of Customs Valuations Rules. The Tribunal observed that to reject the invoice price, department has to give cogent reasons. Similarly in the case of CC New Delhi Vs Virasat Electronics [2015(317)ELT 295 (Tri-Del)], it was held that enhancing the value based on cost construction method cannot be held to be a proper method to decide upon the value of the goods, especially when there is no evidence of any consideration flowing back to the foreign supplier.

9. In the present case, the Revenue has not referred to any contemporaneous imports of identical goods and has not produced any evidence to rebut the invoice value.

10. In fact, the adjudicating authority has observed that till February 2013, the lower assessable value was being accepted and the goods were being cleared by the Customs. If that be so, we find no justifiable reasons to enhance the value based upon some other enhancement order of the proper officer under the Customs and to hold the same as contemporaneous. The impugned orders are unsustainable. The same are accordingly, set aside and all the appeals are allowed with consequential relief to the appellants.

(Order pronounced in open court)

ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

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