2015 (8) TMI 240 - SC - Customs

Court upholds import valuation based on contemporaneous prices, rejects declared value. Emphasizes accuracy in import valuation.

The Supreme Court upheld the Department's decision to value imported goods based on contemporaneous import prices, rejecting the declared transaction ... Transaction value of goods imported – fixation of price on contemporaneous import made by another firm – Held that:- when the Department doubted the valuation of the goods, as declared in the Bill of Entry, or for that matter in the invoice which was produced from the trader by showing the evidence to the effect that the same goods were imported at the same time at a much higher rate it was open to the Department to fix the transaction value on that basis. - We further find that respondent had imported 30,000 pieces only for which Bill of Entry was filed and not actual import of 90,000 pieces as accorded by Tribunal – Therefore, quantities also approximately same and there was not much difference between two – Impugned order of tribunal set aside – Decided in favour of Revenue. Issues Involved:1. Valuation of imported goods based on contemporaneous import prices.2. Rejection of transaction value declared by importer.3. Appeal against the decision of CESTAT.Analysis:Issue 1: Valuation of imported goods based on contemporaneous import pricesThe respondent imported plastic cameras at a declared unit price of US $0.41. However, Customs Officers detained the consignment and issued a show cause notice stating the actual price as US $1.50 based on another import by M/s. SKP Trade Link. The Commissioner confiscated the goods but allowed release on a bank guarantee and payment of differential duty. The Tribunal rejected the evidence of contemporaneous transaction with SKP Trade Link, citing differences in quantity imported. The Supreme Court found that the goods were identical, and the Department was justified in fixing the transaction value based on SKP Trade Link's import price. The Court set aside the Tribunal's judgment and reinstated the Commissioner's order.Issue 2: Rejection of transaction value declared by importerThe respondent's declared transaction value was rejected due to the absence of a manufacturer's invoice and reliance on SKP Trade Link's import price. Even though the respondent purchased the goods from a trader, the Department had the authority to determine the value based on comparable imports. The Court noted that the goods imported by both parties were the same model and quantity, justifying the valuation method used by the Department. Consequently, the Court upheld the Department's decision to reject the declared transaction value and confiscate the goods.Issue 3: Appeal against the decision of CESTATThe Department appealed the CESTAT's decision favoring the respondent. Despite the Tribunal's ruling, the Supreme Court found errors in discarding the Department's evidence and upheld the Commissioner's order. The Court emphasized the importance of accurate valuation in imports and supported the Department's actions in this case. As a result, the Court allowed the appeals and reinstated the Commissioner's order for confiscation of the imported goods.In conclusion, the Supreme Court's judgment in this case emphasized the significance of accurate valuation of imported goods and upheld the Department's decision to rely on contemporaneous import prices for determining the transaction value. The Court's detailed analysis highlighted the importance of consistent valuation methods and supported the Commissioner's order overruling the Tribunal's decision in favor of the respondent.