CANNON STEELS PVT. LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) IN these two appeals, the issue involved is determination of the assessable value of stainless seamless tubes and pipes imported by M/s. Cannon Steels Pvt. Ltd.

(2.) SHRI L.P. Asthana, learned Advocate, submitted that the Appellants imported a consignment of 58.808 MT of second/defective stainless seamless tubes/pipes from Taiwan; that the value of the consignment was declared as Rs. 21,48,164/ -; that the Customs Department got the goods examined by Nuclear Fuel Complex, who opined that a part of the goods were prime quality, a part of the goods were seconds and part of the goods were scrap; that the Commissioner under Order -in -Original No. 112/97, dated 5 -8 -97 observed in Para 38 that it would be extremely difficult to arrive at any definite conclusion as the goods are not physically available and it has to be concluded that the consignment consists of both unused factory fresh material as well as seconds and scrap of stainless seamless tubes and pipes; that the Commissioner gave his specific finding that "in the absence of any specific weighment of each category I would like to give the benefit of doubt to the party and concluded that whole lot may be taken as seconds and scrap." He, further, submitted that the Commissioner however took the price of US 2400 PMT instead of price of stainless seamless tubes and pipes as 1170 PMT declared by them and confirmed the demand of duty and imposed penalty etc.; that on Appeal the Appellate Tribunal vide Final Order Nos. 806 -807/98 -A, dated 3 -6 -98 [1998 (102) E.L.T. 349 (Tribunal)] remanded the matter for de novo decision on the limited question of the valuation of the goods imported after observing that the learned Counsel for the appellants has made a statement at the bar that they accepted the finding in Para 38 of the Commissioner's Orders and they did not want any cross -examination of the witnesses or production of any samples or equipment which they wanted to be presented.

(3.) LEARNED Advocate, further, mentioned that the Commissioner in the impugned order has made a distinction between seconds and scrap and segregated the quantity between the two on the basis of report of Nuclear Fuel Complex; that as such the impugned order goes beyond Para 38 of the earlier Order dated 5 -8 -97 which have been accepted by the Tribunal and on the basis of which the remand order was made; that it was not open to the Commissioner to make further categorization of the impugned goods into seconds and scraps as the entire consignment was required to be considered as seconds/scrap or defective; that there was no direction or mandat in the Tribunal's Final Order dated 3 -6 -98 to segregate into seconds and scrap as the matter was remanded only for the purpose of determining the assessable value. He contended that they had declared that the invoice received from the supplier contained the price of seconds, defective stainless seamless tubes and pipes; that as their goods have been treated as seconds/scrap, the said price declared in the invoice should be accepted being the transaction -value. He relied upon the decision in the case of Eicher Tractor Ltd. v. 'Commissioner of Customs, Mumbai, 2000 (122) E.L.T. 321 (S.C.) wherein it has been held by the Supreme Court that unless the price actually paid for the particular transaction falls within the exception mentioned in Rule 4(2) of the Customs Valuation Rules, "the Customs Authorities are bound to assess the duty on the transaction value"; that the judgment of the Supreme Court in Eicher Tractors Ltd. clearly held that the transaction value cannot be rejected except for the reason given in Rule 4(2); that it is not in dispute that the Appellants and the suppliers are not related person and they have no interest in the business of each other; that it is also not the case of the Department that any additional consideration over and above the invoice has been paid by the Appellants to the supplier; that there are no restriction to disposition or use of the goods by the Appellants; that therefore none of the circumstances mentioned in Rule 4(2) which would enable the Department to reject the transactional value are present in their case and as such the goods have to be assessed on the transactional value. He also pointed out that the learned Commissioner has relied upon the invoice dated 9 -6 -92 of M/s. Metal and Resources Ltd. which covers a quality of 3.8 MT whereas the goods imported by them weigh approximate 58 MT; that accordingly the quantities are not at all comparable; that moreover in the case of seconds defective goods it is not possible to compare the price unless a very detailed comparison is made regarding the goods involved; that no such comparison has been made in the present matter and therefore it is not possible to state whether the goods were of identical or similar nature to those supplied by M/s. Metal and Resources Ltd., London.