M/S. Henkel Chembond Surface Technologies Ltd. Vs. the Commissioner of Customs, Mumbai I - Court Judgment

SooperKanoon Citationsooperkanoon.com/943958
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided OnFeb-18-2010
Case NumberAPPEAL NO. C/959 of 2005 - Mum
Judge THE HONOURABLE MR. P.G. CHACKO, MEMBER (JUDICIAL) & THE HONOURABLE MR. M. VEERAIYAN, MEMBER (TECHNICAL)
AppellantM/S. Henkel Chembond Surface Technologies Ltd.
RespondentThe Commissioner of Customs, Mumbai I
Advocates:Shri J.S. Sanghvi, Consultant for Appellant. Shri B.P. Pereira, JDR
Excerpt:
per : shri. p.g.chacko, member (judicial) after examining the records and hearing both sides, we find that this appeal filed by the importer is against the loading of assessable value of the goods imported / to be imported by them, ordered by the lower authorities. the dy. commissioner of customs (gatt valuation cell) found the importer to be related to the foreign supplier viz. m/s. henkel (australia) pvt. ltd., australia and, on this basis, ordered loading of the assessable value by 100% for a period of three years from 13.01.2005 (the date of his order). the appeal filed by the appellant against the deputy commissioner’s order was rejected by the commissioner (appeals). 2. learned consultant for the appellant refers to a letter dated 06.02.2002 of the appellant addressed to the asst. commissioner of customs, which is one of the letters referred to in the dy. commissioner’s order. in this letter, the appellant requested the asst. commissioner to amend bill of entry no. 233640 dated 10.01.2002 as they were related to the supplier viz. m/s. henkel (australia) pvt. ltd., australia. it is submitted that the above letter did not preclude the appellant from claiming that they were not related to their supplier for purposes of the customs valuation rules, 1988. it is further submitted that the transaction between the appellant and the supplier was on principal-to-principal basis and at arms length and, therefore, the price declared by the appellant was not to be rejected without cogent reasons. it is also submitted that the dy. commissioner’s order cannot be considered to be a speaking order on the valuation issue. the loading of value was done merely on the basis of the finding of relationship. 3. we have also heard the learned jdr who submits that the relationship of the appellant to their supplier for purposes of the valuation rules is not in dispute inasmuch as the same was categorically admitted by the appellant in writing before the original authority in his rejoinder. in his rejoinder, the learned consultant submits that, after the period of three years stipulated in the deputy commissioner’s order, there have been similar imports by the appellant and that the customs authorities are likely to follow the order in respect of these imports also. the consultant, therefore, prays for setting aside the impugned order and allowing this appeal. 4. after considering the submissions, we have not found valid grounds for allowing this appeal in absolute terms. we find that the relationship of the appellant to their supplier is a fact expressly admitted by the former in their letter dated 06.02.2002 submitted to the asstt. commissioner of customs (valuation). there is no evidence of the above plea of relationship having been retracted. even in the present appeal, there is no plea to the effect that the appellant has never been related to m/s. henkel (australia) pvt. ltd., australia for purposes of the customs valuation rules, 1988. therefore, the submission of the learned consultant disputing relationship of the appellant to their supplier cannot be accepted. we hold that the appellant was related to their supplier and therefore the assessable value of the goods imported by them will have to be determined, having regard to such relationship. however, we agree that the assessee has the right to claim such relationship did not in any way influence the price of the goods imported by them. it appears, no opportunity to exercise this right was available to the appellant. the dy. commissioner’s order and the order of the appellate commissioner are not speaking orders on the merits of the valuation dispute. it also appears from the records that the fact that there was only one consignment imported by the assessee by the time the matter was taken up by the dy. commissioner (gvc) has also weighed with him. he ought not to have considered it as relevant. 5. for the aforesaid reasons, we set aside the orders of the lower authorities and direct the original authority to pass fresh speaking order on the valuation issue after giving the party a reasonable opportunity of being heard. 6. the appeal stands allowed by way of remand.
Judgment:

Per : Shri. P.G.Chacko, Member (Judicial)

After examining the records and hearing both sides, we find that this appeal filed by the importer is against the loading of assessable value of the goods imported / to be imported by them, ordered by the lower authorities. The Dy. Commissioner of Customs (GATT Valuation Cell) found the importer to be related to the foreign supplier viz. M/s. Henkel (Australia) Pvt. Ltd., Australia and, on this basis, ordered loading of the assessable value by 100% for a period of three years from 13.01.2005 (the date of his order). The appeal filed by the appellant against the Deputy Commissioner’s order was rejected by the Commissioner (Appeals).

2. Learned Consultant for the appellant refers to a letter dated 06.02.2002 of the appellant addressed to the Asst. Commissioner of Customs, which is one of the letters referred to in the Dy. Commissioner’s order. In this letter, the appellant requested the Asst. Commissioner to amend Bill of Entry No. 233640 dated 10.01.2002 as they were related to the supplier viz. M/s. Henkel (Australia) Pvt. Ltd., Australia. It is submitted that the above letter did not preclude the appellant from claiming that they were not related to their supplier for purposes of the Customs Valuation Rules, 1988. It is further submitted that the transaction between the appellant and the supplier was on principal-to-principal basis and at arms length and, therefore, the price declared by the appellant was not to be rejected without cogent reasons. It is also submitted that the Dy. Commissioner’s order cannot be considered to be a speaking order on the valuation issue. The loading of value was done merely on the basis of the finding of relationship.

3. We have also heard the learned JDR who submits that the relationship of the appellant to their supplier for purposes of the Valuation Rules is not in dispute inasmuch as the same was categorically admitted by the appellant in writing before the original authority in his rejoinder. In his rejoinder, the learned Consultant submits that, after the period of three years stipulated in the Deputy Commissioner’s order, there have been similar imports by the appellant and that the Customs authorities are likely to follow the order in respect of these imports also. The Consultant, therefore, prays for setting aside the impugned order and allowing this appeal.

4. After considering the submissions, we have not found valid grounds for allowing this appeal in absolute terms. We find that the relationship of the appellant to their supplier is a fact expressly admitted by the former in their letter dated 06.02.2002 submitted to the Asstt. Commissioner of Customs (Valuation). There is no evidence of the above plea of relationship having been retracted. Even in the present appeal, there is no plea to the effect that the appellant has never been related to M/s. Henkel (Australia) Pvt. Ltd., Australia for purposes of the Customs Valuation Rules, 1988. Therefore, the submission of the learned Consultant disputing relationship of the appellant to their supplier cannot be accepted. We hold that the appellant was related to their supplier and therefore the assessable value of the goods imported by them will have to be determined, having regard to such relationship. However, we agree that the assessee has the right to claim such relationship did not in any way influence the price of the goods imported by them. It appears, no opportunity to exercise this right was available to the appellant. The Dy. Commissioner’s order and the order of the appellate Commissioner are not speaking orders on the merits of the valuation dispute. It also appears from the records that the fact that there was only one consignment imported by the assessee by the time the matter was taken up by the Dy. Commissioner (GVC) has also weighed with him. He ought not to have considered it as relevant.

5. For the aforesaid reasons, we set aside the orders of the lower authorities and direct the original authority to pass fresh speaking order on the valuation issue after giving the party a reasonable opportunity of being heard.

6. The Appeal stands allowed by way of remand.