2016 (7) TMI 883 - AT - Customs

Customs Valuation Rules: SVB's Rejected Value Appeal Upheld. Importance of Document Verification.

The judgment in the case involved the rejection of the declared value of imported goods by the Special Valuation Branch (SVB) and the addition of fees ... Validity of order of orders of Commissioner (appeal) in favor of assessee - assessee submitted the documents first time before the commissioner (appeals) - Valuation - import of goods - related parties - additions towards design and validation fees and towards machine Installation and Commission Support Charges - Revenue in appeal - Held that:- The department could have verified the genuineness of the agreements and other documents filed by the respondent before the Commissioner (Appeals). This having not been done, nor any allegation as to the documents being illegal or against law, this submission also fails. With regard to the other aspects of design and validation fees, it is once again the grievance of the department that the respondent herein had not furnished the bill of material containing components / assemblies for these projects and the constituents of locally procured components etc. before the Adjudicating Authority but produced only before the Appellate Authority. Once again, we state that it is not the case of the department that the bill of material containing the list of component and other bills were not at all filed and what was filed was per se tainted with false documents. There is nothing that prevented the department from calling for these particulars and examine the genuineness of the documents. Appeal of the revenue rejected - Decided against the revenue. Issues:1. Rejection of declared value of imported goods by Special Valuation Branch (SVB).2. Addition of fees towards design, validation, and machine installation to assessable value under Customs Valuation Rules.3. Appeal against the order of lower appellate authority by both appellant-revenue and respondent-importer.4. Contention regarding remanding the case back to Lower Adjudicating Authority.5. Examination of the case on merit by the Appellate Authority.6. Verification of agreements and documents by the department before the Commissioner (Appeals).7. Furnishing of bill of material containing components and assemblies for projects.Analysis:1. The judgment involves the case of M/s.YAPP India Automotive Systems P.Ltd., an importer, importing goods for manufacturing custom-designed plastic fuel tanks. The Special Valuation Branch (SVB) rejected the declared value of the imported goods and ordered the addition of fees towards design, validation, and machine installation to the assessable value under Customs Valuation Rules.2. Both the appellant-revenue and respondent-importer filed appeals against the SVB order. The lower appellate authority set aside the addition of value on the goods and rejected the Revenue's appeal, leading to further appeals by the Revenue.3. The Revenue contended that the Appellate Authority should have remanded the case back to the Lower Adjudicating Authority instead of deciding the appeal on merit in favor of the respondent-importer. The department argued that the departmental appeal's concern would be addressed by the assessment group, and there was no need for the lower authority to revisit the matter.4. The Commissioner (Appeals) extensively analyzed the issue and found that the SVB needed to investigate whether the parameters for addition of fees existed. The department's reliance on the importer's reply to the questionnaire for adding fees to the transaction value was deemed unacceptable and unsustainable.5. The Commissioner (Appeals) highlighted that the department could have verified the genuineness of agreements and documents filed by the respondent before him. The failure to do so, coupled with the absence of any illegal allegations against the documents, led to the rejection of the department's submission.6. Regarding the design and validation fees, the department raised concerns about the late submission of bill of material and components before the Appellate Authority. However, it was clarified that there was no indication of the documents being false, and the department could have requested these details earlier.7. Ultimately, the judgment upheld the decision of the Appellate Authority, rejecting the Revenue's appeals and emphasizing the importance of thorough examination and verification of documents in such cases.This detailed analysis of the judgment provides insights into the issues raised, the arguments presented by both parties, and the reasoning behind the final decision, ensuring a comprehensive understanding of the legal aspects involved.