LAWS(CE)-2008-8-27

PUSHPANJALI SILK PVT. LTD. Vs. CC

Decided On August 18, 2008
Pushpanjali Silk Pvt. Ltd. Appellant
V/S
Cc Respondents

JUDGEMENT

(1.) THE appellants Pushpanjali Silk Private Ltd, Bangalore (Pushpanjali) imported a consignment of Mulberry Raw Silk from China weighing 8888 Kgs and filed Bill of Entry No. 727950 dated 29.04.08. They declared a unit price of US$21.3 per Kg CIF. The declared value was rejected and enhanced to US$24.07 CIF under Rule 5 of Customs Valuation Rules 2007 comparing the value of contemporaneous imports. In the impugned order Commissioner (A) sustained the above order of the original authority.

(2.) THE appellant has argued that the declared value was rejected contrary to the relevant legal provisions. The Assistant Commissioner had called upon the importer to substantiate the declared value in a letter purported to be issued under Rule 12 of Customs Valuation Rules 2007(CVR) without furnishing details of contemporaneous imports for similar goods assessed at higher values. In those cases also values declared were in a range including the appellant's value. As per Section 14 of the Customs Act, 62 effective from 10.10.2007, subject to valuation rules, assessable value of imported goods shall be the transaction value, namely the price paid or payable for the consignment for delivery at the time and place of importation, provided that the importer and the supplier are not related and no extraneous consideration had influenced the price. Revenue had no case that the importer had remitted any consideration in excess of what was declared. Rule 12 could not be invoked as a previous import of Pushpanjali in January '08 of identical goods weighing 6221 Kgs had been assessed @ US$21.6. The sole ground for enhancing the value has not been imports at higher values but the fact that declared value of some contemporaneous imports had been enhanced in adjudication which were higher than US$21.30. The CVR did not provide for enhancement of value in such circumstances, especially after the amendment to Section 14 of the Act in 2007. The payment for the import had been made through banking channels and the certified invoice had been produced along with all other relevant import documents such as Bill of Lading, Certificate of Origin, Packing list, Insurance Certificate and certificate as regards the description and conditioned weight of the consignment.

(3.) IN the subject case, SCN was waived. Rule 12 of CVR 2007 provided for asking the importer to explain why the declared price should not be rejected. After hearing the importer and enquiry, value could be accepted or revised following the CVR sequentially. In the instant case the genuineness of transaction value was doubted solely for the fact that there were contemporaneous imports at higher value. Without further enquiry the doubt became the ground to reject the transaction value and the value was enhanced. This was not envisaged in law. The importer should not be asked to justify how some other importer purchased similar or identical goods at a higher value. The onus was on the department to establish that the declared value was depressed for noncommercial reasons for which the same was not acceptable. Pushpanjali was a regular exporter of finished silk and had established a rapport with its supplier which enabled it get raw silk at competitive prices. As the law provided for accepting transaction value, the authorities should follow the law and accept the declared value for assessment.