COMMISSIONER OF CUSTOMS, KANDLA Vs. NIRMA LTD.

JUDGEMENT

(1.) HEARD both sides.

(2.) THE issue involved relates to under -valuation and duty on the differential value. The appeal has been filed by the revenue against the order passed by the Commissioner (Appeals).

(3.) BRIEFLY stated the facts in the present case are that M/s. Nirma Ltd. imported consignments of Normal Paraffin and claimed clearance of the same at the declared value. At the time of assessment it appeared that declared value in all the consignments was on lower side as compared to contemporary value. The goods were assessed and released provisionally against PD Bond/B.G. in terms of Section 18 of the Customs Act, 1962. All the consignments were imported during the period 15 -1 -98 to 10 -6 -99. The importers themselves imported the same consignments of similar/identical goods during the said period @ US $ 555 PMT and US $ 500 PMT CIF from M/s. ICC Chemical Corporation, USA. It was also fond that M/s. IPCL, Vadodara and some other importers had imported identical goods @ US $ 505 PMT C and F during the proximate period. In the light of the above fact, the importers were requested to supply the contract in original, the bank attested invoices, prevailing market prices of inputs as per MOPAG and details of price working as per their contract formula etc. vide Deptt. letter dated 25 -9 -2000 so as to finalize all the provisional assessments. Since the importers failed to supply these documents, a reminder dated 6 -11 -2000 was issued but then again they failed to respond. Therefore, a show cause notice with details of proposed enhancement as per Annexure - A was issued to the importers asking them to reply and appear for hearing on any working day between 20 -1 -01 to 25 -1 -01 vide Deptt. letter dated 22 -12 -2000 but they failed to respond or appear for hearing till 16 -3 -01. The adjudication has resulted finalization of assessment of all the 16 consignments of normal paraffin on the enhanced value of US $ 500 PMT resulting in consequential demand on the interest. Learned DR submitted that the Commissioner (Appeals) gave undue weightage to price formula submitted by the respondent. Learned DR referred to the decision of the Honble Apex Court in the case of Shibani Engineering Systems v. C.C., Mumbai reported in 1996 (86) E.L.T. 453 (S.C.) wherein the Apex Court has held that rejecting of transaction value was justified if the value was unrealistic. Learned counsel appearing for the respondent forcefully submitted that the respondents had entered into a long term supply agreement with M/s. Condea Augusta, Italy on 24 -4 -1996 for purchase of N. Paraffin in order to ensure continuous availability of paraffin required by the respondents for its business of manufacture of Linear Alkyl Benzene. This contract was for three years with price variation clause therein. The respondents had declared value of @ US $ 372 PMT to @ US $ 445 PMT. under the supply agreement, the supplies were to be made between 1997 to 1999. The pricing formula given in clause 5.1 of the agreement dated 24th April 1996 is as under :