Case Law Details
Heidelberg India Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held that as per Rule 7 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR, 2007), “general expenses” in connection with sales in India are to be deducted from the sale price of imported goods/ identical/similar imported goods while arriving at the deductive value of the goods.
Facts- The appellant had registered with Special Valuation Branch for their imports from M/s. Heidelberger Drukmaschinen AG, Germany, that the invoice value was accepted as transaction value by the department since 2001 and the order was periodically renewed which was valid till 1.4.2016. In remand order that the lower adjudicating authority examined the case afresh and passed Order in Original wherein the declared value was loaded by 20.75%. Vide another remand order the lower adjudicating authority rejected the deduction of employee cost, rent, repairs and maintenance and office and miscellaneous expenses claimed by the appellant while computing the deductive value under Rule 7 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR, 2007) and passed an order by loading the declared value of spares @62.5% under Rule of the CVR, 2007. Aggrieved by the order, the appellant filed appeal before Commissioner (Appeals) who vide the impugned order upheld the order passed by the lower adjudicating authority. Hence the present appeal before the Tribunal.
Conclusion- Rule 7 of CVR 2007, permits deductions of additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind. This legal position sets to naught the stand taken in the impugned order that post importation expenses which are internal expenses of the importer and cannot be deducted from the sale price of the goods while arriving at the deductive value of the goods.
Since the Department were dealing with legal issues which involved costing of the goods among other issues, it may have helped to have done a cost audit so that the matter could have been examined with reference to the Cost Accounting Standards applicable to the case.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
