Case: M/s. Radhey Shyam Ratanlal &amp; Another Vs. Commnr. of Customs (Adjudication), Mumbai

sale for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other or one of them has no interest in the business of the other and the price is the sole consideration for the sale or offer for sale. By inserting sub-Section (1A) of Section 14 which was inserted with effect from 16.8.1988, it was provided that subject to the provisions of sub-Section (1) of Section 14, the price referred to in the sub-Section in respect of imported goods would be determined in accordance with the rules made in this behalf.20. Further, Rule 4 deals with the transaction value which is required to be determined under aforesaid rule. Under Rule 4 of the Valuation Rules, the transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India. In accordance with the provisions of Rule 9, such transaction value is required to be accepted subject to the proviso to sub-Rule (2). But the expression used in Section 14 and Rule 4 clearly indicates that the transaction value of imported goods would be accepted as provided by sub-Rule (2) of Rule 4 but such value is always subject to the provision of sub-Section (1) of Section 14 in view of the opening expression used in sub-Section (1A) of Section 14 which opens with the expression "subject to the provisions of sub-Section (1) of Section 14." Therefore, the provisions of sub-Section (1) of Section 14 would prevail when the transaction value required to be determined under Rule 4 does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. There cannot be any dispute with regard to said interpretation that it is the provision which will always prevail. In other words the deemed value contemplated under Section 14(1) would prevail when the price declared does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. Under Rule 5, it is inter alia provided that the value of imported goods shall be the transaction value of identical goods sold for export to India and imported on or about the same time, good being valued subject to provisions of Rule 3. It is also provided in the said Rule that in applying the said rule the transaction value of identical goods and sale at the same commercial level and substantially of the same quantity, would be used to determine the value of the imported goods.21. We are required to apply the aforesaid provision to the facts and circumstances of the present case and when done so it would appear that the appellant although claimed a transaction value, but such value could not be supported by production of the original contract or the invoices relating to procurement of cloves to the appellant under the ten Bills of Entry in question. The said documents were called for and were directed to be produced, but same could not be produced. The alleged contract dated 23.11.2000 cannot be termed as a contract between the parties and it is merely a certificate issued by M/s. Ketan Trading Co.22. The respondent department has also relied upon the contemporaneous documents like the Weekly Bulletin of Spices Market and also the Public Ledger. The Weekly Bulletin of Spices Market published by the Trade Information Services of the Spices Board of the Ministry of Commerce and Industry, Government of India indicated that the price of Indonesian cloves on 24.11.2000 was US$ 4765 PMT and that of Zanzibar cloves was US$ 4650 PMT. Such bulletin also indicates that by 23.12.2001 the price of Zanzibar cloves had reached Rs.6100/- PMT. The Public Ledger which is also considered as International Publication of Report indicates that the price of cloves in the international market on 27.11.2000 was US Dollars 4700 which reached US Dollars 6300 on 26.3.2001.23. We are also satisfied with the records produced before us that the nature of business of M/s. Ketan Trading Co. is primarily dealing with sport goods and not cloves. There is also a reference of the document on record particularly the relevant bill of lading which indicates that cloves were imported by the appellants from IJIMASIA Pvt. Ltd. through M/s. Ketan Trading Co. at the price of US Dollars 5600 PMT through bill of entry dated 7.2.2001. The value of the said Zanzibar cloves were shown as US Dollars 5600 PMT. It has also come in evidence that 9.5648 MTs cloves of Indonesian origin shipped from Singapore imported by M/s. Spices Trading Corporation under bill of entry dated 8.5.2001 were bought at the rate of US Dollars 5500. The said consignment was shipped on 25.2.2001 as per the bill of lading. Another consignment of 9.300 MTs of cloves of Comoros origin was also imported by M/s. Spices Trading Corporation at the same unit price. A table of imports made by the appellants in the Bill of Entry in question is placed on record. The evidence therefore which exist on record clearly support the findings and the conclusions arrived at by the Commissioner of Customs (Adjudication), Mumbai and also by the Tribunal. The findings and conclusions cannot be said to be perverse. They are based on cogent reasons which are found to be forceful and reasonable. We find no reason and ground to take a different view than what is taken by the said two authorities.24. In our considered opinion, it is conclusively proved that the Department correctly imposed proper assessment value on the goods in question imported by the appellant. The said value for the purpose of assessment of the goods had been correctly arrived at in accordance with the provisions of the Acts and the Rules framed thereunder particularly in accordance with Rule 5 of the Valuation Rules.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]17. The alleged transaction value claimed by the appellant was not accepted by the respondent mainly on the grounds namely inability to produce relevant documents and failure to prove and establish as to at what price the imported goods were purchased by the appellant. The same was also not accepted as it is indicated from the comparable rate that other persons and firms purchased same goods almost at the same relevant time at a higher rate.18. Counsel appearing for the appellant heavily relied on the document dated 23.11.2000 which is a document issued by M/s. Ketan Trading Co. The said letter is a certificate issued by M/s. Ketan Trading Company in favour of the appellant confirming that they had sold to the appellant, cloves of Zanzibar, Indonesia and Cameroon origin at US Dollars 2600 PMT CIF, Mumbai of a quantity of about 300 MTs. A bare perusal of the said document would indicate that the same is not a contract which was entered upon between the parties and it is merely a certificate issued by M/s. Ketan Trading Co. in favour of the appellant.19. We have extracted hereinbefore, the relevant part of the provision of Section 14 (1) (a) of the Customs Act and the relevant part of Rule 4, Rule 5 and Rule 10A of the Customs Valuation Rules. Section 14 of the Act relates to valuation of goods for the purpose of assessment and inter alia provides that the value of any goods chargeable to duty of customs would be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other or one of them has no interest in the business of the other and the price is the sole consideration for the sale or offer for sale. By inserting(1A) of Section 14 which was inserted with effect from 16.8.1988, it was provided that subject to the provisions of(1) of Section 14, the price referred to in thein respect of imported goods would be determined in accordance with the rules made in this behalf.20. Further, Rule 4 deals with the transaction value which is required to be determined under aforesaid rule. Under Rule 4 of the Valuation Rules, the transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India. In accordance with the provisions of Rule 9, such transaction value is required to be accepted subject to the proviso to(2). But the expression used in Section 14 and Rule 4 clearly indicates that the transaction value of imported goods would be accepted as provided by(2) of Rule 4 but such value is always subject to the provision of(1) of Section 14 in view of the opening expression used in(1A) of Section 14 which opens with the expression "subject to the provisions of(1) of Section 14." Therefore, the provisions of(1) of Section 14 would prevail when the transaction value required to be determined under Rule 4 does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. There cannot be any dispute with regard to said interpretation that it is the provision which will always prevail. In other words the deemed value contemplated under Section 14(1) would prevail when the price declared does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. Under Rule 5, it is inter alia provided that the value of imported goods shall be the transaction value of identical goods sold for export to India and imported on or about the same time, good being valued subject to provisions of Rule 3. It is also provided in the said Rule that in applying the said rule the transaction value of identical goods and sale at the same commercial level and substantially of the same quantity, would be used to determine the value of the imported goods.21. We are required to apply the aforesaid provision to the facts and circumstances of the present case and when done so it would appear that the appellant although claimed a transaction value, but such value could not be supported by production of the original contract or the invoices relating to procurement of cloves to the appellant under the ten Bills of Entry in question. The said documents were called for and were directed to be produced, but same could not be produced. The alleged contract dated 23.11.2000 cannot be termed as a contract between the parties and it is merely a certificate issued by M/s. Ketan Trading Co.22. The respondent department has also relied upon the contemporaneous documents like the Weekly Bulletin of Spices Market and also the Public Ledger. The Weekly Bulletin of Spices Market published by the Trade Information Services of the Spices Board of the Ministry of Commerce and Industry, Government of India indicated that the price of Indonesian cloves on 24.11.2000 was US$ 4765 PMT and that of Zanzibar cloves was US$ 4650 PMT. Such bulletin also indicates that by 23.12.2001 the price of Zanzibar cloves had reached Rs.6100/PMT. The Public Ledger which is also considered as International Publication of Report indicates that the price of cloves in the international market on 27.11.2000 was US Dollars 4700 which reached US Dollars 6300 on 26.3.2001.23. We are also satisfied with the records produced before us that the nature of business of M/s. Ketan Trading Co. is primarily dealing with sport goods and not cloves. There is also a reference of the document on record particularly the relevant bill of lading which indicates that cloves were imported by the appellants from IJIMASIA Pvt. Ltd. through M/s. Ketan Trading Co. at the price of US Dollars 5600 PMT through bill of entry dated 7.2.2001. The value of the said Zanzibar cloves were shown as US Dollars 5600 PMT. It has also come in evidence that 9.5648 MTs cloves of Indonesian origin shipped from Singapore imported by M/s. Spices Trading Corporation under bill of entry dated 8.5.2001 were bought at the rate of US Dollars 5500. The said consignment was shipped on 25.2.2001 as per the bill of lading. Another consignment of 9.300 MTs of cloves of Comoros origin was also imported by M/s. Spices Trading Corporation at the same unit price. A table of imports made by the appellants in the Bill of Entry in question is placed on record. The evidence therefore which exist on record clearly support the findings and the conclusions arrived at by the Commissioner of Customs (Adjudication), Mumbai and also by the Tribunal. The findings and conclusions cannot be said to be perverse. They are based on cogent reasons which are found to be forceful and reasonable. We find no reason and ground to take a different view than what is taken by the said two authorities.24. In our considered opinion, it is conclusively proved that the Department correctly imposed proper assessment value on the goods in question imported by the appellant. The said value for the purpose of assessment of the goods had been correctly arrived at in accordance with the provisions of the Acts and the Rules framed thereunder particularly in accordance with Rule 5 of the Valuation Rules.