ORDER
R.K. Abichandani, J. (President)
1. All these three applications raise common issues and have been argued together. The applicant has challenged in these three appeals, the orders made by the Commissioner confiscating the goods in question under Sections 111(m) and 112(a) of the Customs Act, 1962, assessing the imported goods, palm acid oil at US $ 260 per metric tonne (PMT) and imposing penalty on the applicants.
2. According to the applicants, they had imported palm acid oil at different prices at different periods, ranging from US $ 140 to US $ 170 PMT. The show cause notices were issued on the ground that contemporary price of palm acid oil imported from Malaysia was found to be at US $ 260 PMT around the same period when the imports were made by the applicants. The applicants maintained that the price shown was as per the transaction value entered into with the exporters of the goods.
3. It was contended on behalf of the applicants that the applicants were not supplied with the relevant documents showing the contract value appearing on the Bill of Entry which was relied upon by the Department and the invoices as well as the test report. It was also argued that there was no valid reason to discard the transaction value of the goods imported by the applicants.
4. There is no dispute about the fact that the applicants had shown the transaction value of the imported goods by supplying the necessary documents to the Department. The concerned authority, however, acting on the Bill of Entries of the similar goods imported by M/s. Godrej Soaps Ltd. relied upon the price of US $ 260 PMT as was reflected in those transactions.
5. Under Section 14(1) of the said Act, it is inter alia provided that for the purposes of the Customs Tariff Act, 1975, or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall 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 or exportation, as the case may be, 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. Under Sub-section (1A) of Section 14, it has been provided that subject to the provisions of Sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. Under the Customs Valuation Rules, 1988 it is provided by Rule 3 that subject to Rules 9 and 10A, the value of imported goods shall be the transaction value and that if the value cannot be so determined under the provisions of Clause (i) the value shall be determined by proceeding sequentially through Rules 5 to 8 of these rules. Therefore, if the value can be determined with reference to the transaction value subject to Rules 9 and 10A, there would arise no question of proceeding sequentially under Rules 5 to 8.
6. Under Rule 4, which relates to transaction value of the imported goods it can be accepted provided such transaction value shall be the price actually paid or payable for the goods when sold for export to India and adjusted in accordance with the provisions of Rule 9 of these rules. Sub-rule 2 of Rule 4, which is relevant for our purposes, provides that the transaction value of imported goods under Sub-rule (1) shall be accepted if the parameters enumerated therein are satisfied. Nowhere in the show cause notice it has been mentioned that any of the requirements of Clauses (a) to (h) of Sub-rule (2) of Rule 4 were not satisfied so as to enable the concerned authorities to reject the transaction value. Therefore, prima facie, no valid reason for not accepting the transaction value which was required to be accepted under Rule 4(2). As held by the Supreme Court in Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai reported in 2000 (122) E.L.T. 321 (S.C.), reading Rule 3 (i) and Rule 4 (1) together, it was clear that the mandate has been cast on the authorities to accept the price actually paid or payable in respect of the goods under assessment as the transaction value subject to certain excep-tions specified in Rule 4(2). These exceptions are in expansion and explicatory of the special circumstances in Section 14(1). It follows that unless the price actually paid for the particular transaction falls within the exceptions, the Customs authorities are bound to assess the duty on the transaction value.
7. For the above reasons, the applicants have made out a prima facie case in all these three applications for staying the operation of the orders impugned in the ap’peals and waiver of pre-deposit of duty and penalty imposed thereunder. All the three applications are accordingly allowed and the impugned order in each of the three appeals is stayed. The pre-deposit of duty and penalty levied under the impugned orders in each of the three appeals is waived pending the hearing and final disposal of the appeals.
(Dictated in open court on 3-5-2005).