Microgen Hygiene Private Limited Vs Commissioner of Customs (CESTAT Kolkata)
CESTAT Kolkata allowed the appeal of Microgen Hygiene Private Limited concerning import of disinfectant “D-125-Lavender” during September-October 2008 for onward supply to Government of Jharkhand hospitals. The dispute principally concerned whether the foreign supplier’s invoice price represented CIF or FOB value and whether freight and insurance were consequently required to be added to the assessable value under Rule 10(2)(i) and (ii) of the Customs Valuation Rules, 2007. The Revenue had also sought to assess additional customs duty (CVD) on an MRP/RSP basis by invoking Section 4A of the Central Excise Act, 1944 and Notification No. 14/2008-CE (NT). A show cause notice dated 29.11.2012 was issued by invoking the extended period in respect of imports made during September-October 2008.
On the valuation issue, the Tribunal examined the documentary evidence, including the marine insurance policy, Airway Bill, Bill of Lading and invoice. The Marine Policy showed Microgen USA as the assured and that the premium had been paid by the exporter. The Airway Bill indicated that freight was paid by the overseas party, while the Bill of Lading provided that freight was to be billed to Microgen Inc., USA. The invoice also showed that the goods were intended for Government of Jharkhand supply. On this evidence, the Tribunal held that freight and insurance had been borne by the foreign party and there was nothing showing that the appellant was required to bear those amounts. The transaction was consequently established to be on CIF basis. The enhancement of assessable value by separately adding freight and insurance was therefore held legally unsustainable.
