RABINDRA CHANDRA PAUL Vs. COMMR OF CUSTOMS

JUDGEMENT

(1.) This is an appeal u/s. 130 E of the Customs Act, 1962 against judgment and order No. M-299/Kol/06 dated 6.7.2006 passed by the Customs, Excise & Service Tax Appellant Tribunal, Kolkata ("the Tribunal"). It is an appeal filed by the assessee.

(2.) A short question which arises for determination in this civil appeal is whether the Department, in the facts and circumstances, was justified in invoking Rule 7A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 framed u/s. 156 of the said 1962 Act.

(3.) Appellant-assessee purchased two consignments of Refined Soyabean Oil from M/s United Edible Oils Ltd., Bangladesh. The goods imported were accompanied with Invoice dated 4.10.2003 and Invoice dated 30.10.2003. The C & F value of the Soyabean Oil (final product) showed the price to be Rs. 24.50 per kg. calculated at the prevailing rate of US $. The Department called upon the appellant to give the cost break-up of the imported goods. The details were forwarded by the appellant to the Department vide letter dated 19.10.2003 along with copy of the bills of entry. The appellant also obtained a certificate from the Superintendent of Customs which stated that the consignments imported stood assessed by the Assistant Commissioner of Customs at Rs. 27.17 and Rs. 31.96 respectively. The Department, however, refused to accept the rate of Rs. 27.17 and Rs. 31.96 respectively. On 5.12.2003 the Assistant Commissioner of Customs gave a hearing to the appellant in the matter of finalization of the assessable value of the said two consignments. The appellant contended that M/s United Edible Oils Ltd., Bangladesh was the manufacturer of Refined Soyabean Oil. The said goods were manufactured from imported Crude Soyabean Oil (raw material). The said raw material was imported by M/s United Edible Oils Ltd., Bangladesh from a foreign country under a valid invoice and bills of entry, copies whereof were also submitted by the appellant herein to the Assistant Commissioner of Customs. M/s United Edible Oils Ltd., Bangladesh processed the said raw material in their factory in Bangladesh into Refined Soyabean Oil (final product) which was exported to the appellant. Before the Assistant Commissioner, the appellant presented the actual price of the above raw material plus processing charges plus transportation charges from the factory gate to the point of exportation. The price declared, therefore, was the price at the point of exportation. Before the Assistant Commissioner, the appellant submitted the above documents. The appellant contended before the Assistant Commissioner that the Assistant Commissioner was not entitled to invoke Rule 7A on the basis of the cost break-up, particularly when there was no allegation that the price declared was tainted. The appellant contended before the Assistant Commissioner that the Department was not entitled to invoke Rule 7A and that the Department was not justified in invoking Rule 7A when the declared price tallied with the price of the Indian Refined Soyabean Oil (see page E of the synopsis). By Order dated 26.12.2003 the Assistant Commissioner of Customs confirmed the demand raised by the Department fixing the assessable value at Rs. 31.66 per kg. The Assistant Commissioner came to the conclusion that the Declared Price of the final product was less than the Tariff Value indicated in the letter issued by the Central Board of Excise and Customs dated 15.12.2004 under which the Board had stated that the Tariff Value for Crude Soyabean Oil stood at US $ 565 PMT vide Notification No. 105/2004-Customs (NT) dated 15.9.2004. In the said letter, the Board further stated that it was logical to value the raw material at prices higher than the Crude Soyabean Oil. On the basis of said letter dated 15.12.2004 and Notification dated 15.9.2004 the Assistant Commissioner of Customs fixed the assessable value of the Refined Soyabean Oil at the above rate of Rs. 31.66 per kg.. Accordingly, the Assistant Commissioner directed the Department to complete the assessment and confiscate the goods u/s. 111(m) of Customs Act, 1962.