Case Law Details
Ore Cast (India) Vs Commissioner of Customs (CESTAT Kolkata)
CESTAT Kolkata held that when buyer and seller are not related and the price is the sole consideration, the transaction value at the time and place of export will be the assessable value. Accordingly, customs duty paid at higher assessable value is directed to be refunded.
Facts- M/s Ore Cast (India), engaged in import, export and Merchant trading as a Star Export House, exported 34000 MT of Iron Ore fines having Fe content of 61% (rejection level- below 60%) at a Unit price of USD 153 Per MT, as per Contract dated 13.04.2011. They have paid export duty amounting to Rs.4,22,58,967/-. In the original contract, the last date of shipment was 05.05.2011, which got extended upto 25.05.2011. As per Addendum dated 31.05.2011, the rejection level of Fe content in the iron ore fines was amended to below 58% form 60% in the earlier contract. The export price was also reduced to USD 125 Per MT. Since, the exporter has already paid duty @USD 153 Per MT, they have filed refund claim on the ground that the overseas supplier has allowed them price rebate @28$ Per MT, in terms of Addendum No.3 dated 31.05.2011 to the contract dated 13.04.2011, on 08.08.2011.
The Asst Commissioner rejected the refund. Commissioner (A) partly allowed the refund. Being aggrieved, both appellant and department has filed the present appeal.
Conclusion- Section 14(1) states that where the export goods are sold by the exporter for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale, the value of the export goods shall be the ‘transaction value’ of such goods, that is to say, the price actually paid or payable for the goods, is relevant for determination of export duty payable thereon. Thus, if the buyer and seller are not related and if the price is the sole consideration, the transaction value at the time and place of export will be the assessable value. Thus, we agree with the contention of the Appellant that the assessable value of the goods exported with 59.11% Fe content would be USD125. Accordingly, we hold that the Appellant was liable to pay export duty on the basis of assessable value of USD 125 Per MT. Since the Appellant has already paid export duty by adopting USD 153 per MT, we hold that they are eligible for refund of the excess duty paid. Since the Appellant are eligible for the excess customs duty, the department’s appeal challenging the partly allowed refund is not sustainable.
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