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of <h1>CESTAT Mumbai: Transaction value upheld in customs case, penalties unsustainable</h1> The Appellate Tribunal CESTAT, Mumbai ruled in favor of the appellant in a customs valuation case. The Tribunal found that the rejection of the ... Valuation - Contemporaneous import Issues: Customs Valuation Rules interpretation, rejection of transaction value, penalty impositionThe judgment by the Appellate Tribunal CESTAT, Mumbai involved a case where a Show Cause Notice was issued for imports, questioning the transaction value due to the absence of contemporaneous imports of identical or similar goods at higher prices. The appellant's contention regarding the alleged fake price list from the supplier was not adequately addressed by the lower authorities. The Commissioner found no evidence of invoice manipulation or surreptitious compensation, leading to the rejection of the transaction value based on the price list. However, the authenticity of the price list was not substantiated by the department, as highlighted by the appellant.The appellants argued that Customs Valuation Rules, specifically Rule 8, prohibit comparison with price lists of goods sold in other countries or in the Indian market. They contended that the determination of the price under Rule 7 was erroneous and not justified in this case. The department did not consider the actual selling price of the imported goods in the greatest aggregate quantity, and the deductions made were arbitrary without any substantial evidence. The appellants were deemed liable for erroneously deducted values, and the departure from the transaction value was unwarranted. Therefore, the valuation based on the transaction value should have been upheld in this scenario.The Tribunal concluded that once it was established that the transaction value should apply and not be departed from, the valuation arrived at could not be sustained. Consequently, there was no basis for imposing a penalty under Section 114A or Section 112 of the Customs Act, 1962 in this case. The differential duty demands and penalties imposed were deemed unsustainable, leading to their set aside, and the appeal was allowed in favor of the appellant.
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