C/10257/2022 — LANXESS INDIA PVT LTD vs AHMEDABAD

Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench at Ahmedabad

REGIONAL BENCH- COURT NO. 3

Customs Appeal No. 10257 of 2022- DB (Arising out of OIA-AHD-CUSTM-000-APP-1429-21-22 dated 06.01.2022 passed by Commissioner of Customs (Appeals) - AHMEDABAD) M/s Lanxess India Private Limited ……..Appellant Plot No. 748/2A, 748/3 & 748/4B, 748/4A,
GIDC, Jhagadia, Furwadi, Jhagadia,
Bharuch, Gujarat 393110 VERSUS

C.C. Ahmedabad ……Respondent Customs House, Navrangpura, Ahmedabad, Gujarat - 380009

APPEARANCE: Shri Prashant Patankar, Consultant for the Appellant
Shri R.R. Kurup, Superintendent (Authorised Representative) for the Respondent

CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU

                   FINAL ORDER NO.       11932   /2024 

                                                               DATE OF HEARING: 08.05.2024 
                                                                DATE OF DECISION:04.09.2024  

RAJU

This appeal has been filed by M/s Lanxess (India) Private Limited against rejection of the declared transaction cost and redetermination of assessable value under Section 17(5) of the Customs Act, 1962. 2. Learned counsel for the appellant pointed out that they had filed bill of entry No. 8616203 dated 28.08.2020 for clearance of 8000 Kgs of 1.2 Benzisothiazolin-3-ONE 85% (BIT PASTE 85%) China origin. The price of goods was declared as USD 8.50 PKG on CIF basis. The system raised a query regarding the price on the basis of an earlier import vide Bill of Entry No. 7502528 dated 22.04.2020 wherein the price declared was USD 28 PKG. The appellant had contended before the lower authorities that the commodities need not to be traded at uniform price all along. The appellant had imported the goods on 28.08.2020 whereas the comparative price taken was of 22.04.2020. He argued that there are varying commercial parameters which result in variation in cost. He submitted that there has been significant variation in the price in the appellant’s own imports over the past two years from different

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manufacturers. The appellant had stated before first appellate authority that the price of key raw material namely O-chloro benzonitrile (OCBN) has dropped drastically during this period and therefore the supplier had passed on the benefit to the appellant.
3. Learned counsel contended that the supplier had explained that the prices of raw material OCBN shot up five-fold after March 2019. The prices shot up from CNY 20/KG to CNY 100/KG following the explosion in the main manufacturing unit. He argued that the deputy commissioner had ignored this explanation given in the certificate of the manufacturer’s supplier wrongly. He pointed out that the original adjudicating authority had unfairly and without any reason discarded the said certificate solely for the reason that there were no supporting documents from any regulating / governing international price agency/ institute, weekly / quarterly Price Bulletins. He pointed out that the original adjudicating authority had not appreciated the certificate dated 14.09.2020 from the supplier specifically stating that the price of raw material OCBN dropped from RMB 110/KG (USD 15.70 PKG) to RMB 23 PKG (USD 3.29 PKG). The aforesaid evidence has not been examined in Order-in-Original or in Order-in-Appeal. The appellant submitted some data of imports made between February 2018 to August 2020, in support of their claim about temporary increase of price.
4. Learned Authorised Representative relies on the impugned order.
He pointed out that the original adjudicating authority has relied on contemporaneous import data as under: SR No. BE No. Date Rate ($/KG) 1 5181446 05.10.2019 27.80 2 5432974 25.10.2019 27.80 3 7502528 22.04.2020 28.00 He pointed out that said data indicates that the price of the item was in the range of 27.80 USD PKG to 28 USD PKG. 5. We have considered the rival submissions. We find that the case relates to rejection of the declared assessable value and enhancement of the assessable value on the basis of contemporaneous import prices.
The appellant had imported ‘1,2-Benzisothiazolin-3-ONE 85% (BIT PASTE 85%) China origin’ at the USD 8.5 PKG vide their bill of entry No. 8616203 dated 28.08.2020 for a quantity of 8000 Kgs. The revenue has rejected the said declared value on the strength of bill of entry no. 7502528 dated 22.04.2020 which had a declared value of USD 28 PKG.
The appellant had contended that there was a temporary rise in prices of

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the ‘1,2-Benzisothiazolin-3-ONE 85% (BIT PASTE 85%) China origin’ due to explosion in a unit manufacturing key input for manufacture of bit namely OCBN. The appellant had contended that for a short period the prices of OCBN had sky rocketed leading to increase in price of BIT.
However, later on the prices dropped and consequently the price of BIT also dropped. The appellant had submitted a letter from their supplier in this regard. Consequently, the appellant have submitted the import data of same item subsequent to the impugned imports. The data indicates that the price of the said item has since decreased from USD 8.50 PKG to USD 7.23 PKG.
Details of Imports between February 2018 to August 2020

Shipper Bill of Entry BoE date Qty Kg Unit Price USD/kg 1 Linva (Shanghai) 5037222 02.02.2018 8000 8.56 2 Linva (Shanghai) 6461919 21.05.2018 8000 8.56 3 Linva (Shanghai) 8207135 26.09.2018 8000 11.90 4 Linva (Shanghai) 8978056 24.11.2018 8000 11.90 5 Linva (Shanghai) 9413287 26.12.2018 8250 12.33 6 Linva (Shanghai) 2495847 20.03.2019 12000 12.33 7 Dalian Bio- Chem 4531602 17.08.2019 4000 27.40 8 Dalian Bio- Chem 5181446 05.10.2019 5200 27.80 9 Linva (Shanghai) 5295583 15.10.2019 5000 28.00 10

5432974 25.10.2019 5200 27.80 11 Linva (Shanghai) 7502528 22.04.2020 8000 28.00 12 Shouguang Hentech 8616203 20.08.2020 8000 8.50

Details of Imports between August 2020 to July 2021

Description

1 Article dated 26.03.2019 about explosion on 21.03.2019 at Xiangshui industrial Park 2 Article dated 26.03.2019 about explosion on 21.03.2019 at Xiangshui Industrial Park 3 Bills of Entry post bill of entry under dispute dated 28.08.2020

Shipper Bill of Entry BoE date Qty Kg Unit Price USD/kg (i) Shouguang Hentech 9450451 04.11.2020 12000 8.50 (ii) Shouguang Hentech 9938006 13.12.2020 12000 7.50 (iii) Shouguang Hentech 2933180 27.02.2021 12000 7.30 (iv) Shouguang Hentech 3703760 25.04.2021 12000 7.30 (v) Dalian Bio-Chem 4809880 26.07.2021 5000 7.23

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The appellant have submitted corresponding bill of entries as well. The appellant has also submitted some literature from the internet indicating the explosion in Xiangshui Industrial Park in Yancheng, Jiangsu. From the above chart it is seen that there was a brief period from August 2019 to April 2020 when the prices of the product sky rocketed however thereafter the prices cooled down. In this context, the explanation given by the appellant fits the data. 6. Consequently, we find that the explanation given by the appellant is reasonable and therefore, the impugned order is set aside and appeal is allowed.
(Order pronounced in the open court on 04.09.2024 )

(RAMESH NAIR) MEMBER (JUDICIAL)

(RAJU) MEMBER (TECHNICAL) Neha