National Steel and Agro Pvt. Ltd. Vs Commissioner of Customs (CESTAT Mumbai)
Summary: CESTAT Mumbai allowed the appeal filed by National Steel and Agro Pvt. Ltd. against the order dated 29.11.2012 of the Commissioner of Customs (Appeals), Mumbai Zone-I, which had upheld the Assistant Commissioner’s order dated 24.03.2010 enhancing the value of three consignments of HR Alloy Steel Coils from USD 392.70 PMT to USD 460 PMT under Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The goods had been imported under three Bills of Entry dated 07.08.2009 and were classified as Alloy Steel under CTI 7225 30 90. The Department had rejected the declared transaction value under Rule 12 primarily on the basis of NIDB data showing higher values for HR Steel Plates and London Metal Exchange Bulletin prices. The Appellant contended that the transaction value represented the price actually agreed and paid under the Sales Order dated 10.04.2009 and that HR Steel Plates could not be treated as comparable to HR Steel Coils, particularly where the quantities and commercial circumstances differed. The Tribunal examined Section 14 of the Customs Act, 1962 and Rules 3, 5, 10, 11 and 12 of the Valuation Rules. It noted that the declared value was supported by the Sales Order and Bank Remittance Certificate and that the Department had not alleged any additional payment or consideration. The Tribunal further noted that the contemporaneous imports relied upon involved substantially different quantities and, in relevant instances, HR Steel Plates rather than HR Steel Coils. Referring to the Supreme Court decision in CCE & ST, Noida v. Sanjivani Non-Ferrous Trading Pvt. Ltd., the Tribunal observed that the declared transaction value could be rejected only for cogent reasons supported by material. It also relied on Commissioner Customs (EP), Mumbai v. Yatin Steels India Pvt. Ltd., where HR Coils and HR Steel Plates were held not to be similar or identical goods for the purpose of contemporaneous valuation. The Tribunal concluded that the value declared by the Appellant could not have been rejected under Rule 12 and that sequential valuation under Rules 4 to 9 could arise only after the transaction value was validly rejected. Accordingly, the order dated 29.11.2012 was set aside and the appeal was allowed with consequential benefits. The order was pronounced on 01.02.2022.
Background
The Appellant claimed to be importing Hot Rolled Steel Coil from foreign suppliers. Till November 2008, it imported HR Non-Alloy Steel Coil falling under Customs Tariff Heading 7208. Pursuant to Notification dated 27.11.2008, under which Steel falling under CTH 7208 was made a restricted item for the purpose of import, the Appellant started importing HR Alloy Steel Coil falling under CTH 7225 until the restriction remained in force. By Notification dated 08.01.2010, the restriction on import of Non-Alloy Steel was lifted.
