Page 199 - ELT_15th August 2020_Vol 373_Part 4

2020 ] IFFCO LTD. v. PRINCIPAL COMMISSIONER OF CUSTOMS, JAMNAGAR 533

Goods) Rules, 2007. The STE has represented the Indian buyer abroad to
purchase the material. On the contrary the STE has purchased the material
of its own and then sold the goods to Indian buyers on high seas sales basis.
The purchases of STE’s from foreign sellers and subsequent sale of it to Indian buy-
ers are independent of each other. Therefore, it is evident that the ‘Misc. Charges’
should form part of the assessable value for calculation of Customs Duty in terms
of Section 14(1)(a) of Customs Act, 1962 and Rule 10(1)(e) of the Customs Valua-
tion (Determination of Price of Imported Goods) Rules, 2007.
7.5 It is also seen that by virtue of the high seas sales through which the noticee
purchased the urea from the Ministry of Chemicals & Fertilizers, Govt. of India, it
has derived the benefit of avoiding the payment of sales tax/VAT on these goods.
Further, on what price the 2% HSS Commission should be charged, as there
are various prices available i.e. the price of the goods which STE purchased
from the foreign supplier or the price on which STE sale to the Ministry of
Chemicals & Fertilizers, Govt. of India or the price at which Ministry of
Chemicals & Fertilizers, Govt. of India sale to M/s. IFFCO? It is also evi-
dent from the statement of Shri Surinder Singh Rawat, JT. GM (F&A),
IFFCO that M/s. IFFCO pays pool price as defined in the contract to Govt.
of India. To clarify the examples he cited is if STE purchases urea at 300
USD per MT from exporter, Govt. of India pays to STE 300 USD per MT,
and M/s. IFFCO pays pool issue price as define in the handling contract
(gross) i.e. Rs. 5110/- (which is approximate 83 USD) to Govt. of India, etc.
The duty levied, collected on import of urea is the price at which the STE
purchases from foreign seller, these duty calculation falls squarely within
the ambit of Customs Act, 1962 read with CVR, 2007. It is evident that 2%
High Sea Sale Commission should be included in the Assessable value for calcula-
tion of Customs Duty and on the amount at which the importer is paying duty.
… … …
8. In the light of the facts discussed in the foregoing paras and material
evidence available on records, it appears that the importer has misdeclared
Misc. Charges & High Sea Sale in the declaration form filled by them as per
provisions of Section 46 of the Customs Act, 1992 along with bill of entry;
the said declaration form is in terms of provisions of Rule 10 of the Customs
Valuation Rules, 1988. Further, the importer has suppressed the facts by not in-
timating the High Sea Sale Agreement between Govt. of India and M/s. IFFCO
and same has been confirmed from the records and statement of Shri S.S. Rawat, Jt.
GM (F & A). Therefore, it appears that the extended period of five years is invoka-
ble in the present case. This also renders M/s. IFFCO liable for penal action
under Section 114A of the Customs Act, 1962.
… … …
9. ……...M/s. IFFCO paid Rs. 30,41,704/- vide challan No. CUS/128/15-
16 23-6-2015 on account of duty on Misc. Charges @ Rs.17/- PMT (for im-
port from 19-5-2010 to 18-5-2015) paid by Ministry of Chemicals & Fertiliz-
ers, Govt. of India to STE, and paid interest thereof Rs. 9,37,680/- vide chal-
lan No. CUS/128/15-16 26-5-2015.
(emphasis supplied)
6. The Appellant was, therefore, called upon to show cause as to why :
“(i) The value of Rs. 62,38,13,12,997/- (Rupees Six Thousand Two Hun-
dred and Thirty Eight Crore Thirteen Lakh Twelve Thousand Nine Hun-
dred and Ninety Seven only), declared by them in respect of 3032282.5 MTs

EXCISE LAW TIMES  15th August 2020  199