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of <h1>CESTAT upholds declared export transaction value, rejects value enhancement without evidence of additional consideration</h1> The CESTAT Hyderabad allowed the appeal, setting aside the order that rejected the transaction value declared by the appellant. The tribunal held that ... Rejection of transaction value - transaction value declared by the Appellant can be disregarded only on the basis that contemporaneous exports made by different exporters at or about same time, which is on a higher side or not - HELD THAT:- It is found that no case has been made out by the revenue of the receipt of any additional consideration/flow back of funds - In the absence of any case made out by the revenue of additional consideration or otherwise, rejecting transaction value merely on the basis of higher value declared by other exporters, is not correct. This issue has been considered by the CESTAT in the case of Sanjivani Non- Ferrous Trading Pvt Ltd. vs. CCE, Noida [2017 (3) TMI 359 - CESTAT ALLAHABAD] wherein it was held that 'Further, we find that as held in the case laws stated above and as provided by Section 14 of Customs Act, 1962, the assessable value has to be arrived at on the basis of the price which is actually paid and in a case the price is not sole consideration or if the buyers and sellers are related persons then after establishing that the price is not sole consideration the transaction value can be rejected and taking the other evidences into consideration the assessable value can be arrived at. Such exercise has not been done in these cases on hand. Therefore, we reject the enhancement of assessable value in respect of the Bills of Entry which are involved in all the appeals being decided and we restore the assessable value as declared by the appellant in said Bills of Entry.' It is found that in the present case, there is no dispute that the Appellant realized @ USD 89 per MT amounting to USD 4338857.97 from the buyer as per the BRC received basis, the invoice raised and has discharged export duty of Rs.2,49,18,709/- thereon, upon the said value. There is no dispute/allegation by the revenue that the Appellant has received any amount over and above the said declared value and hence following the above precedent decisions rejecting the transaction value only on the basis of higher value declared in case of contemporaneous exports, is not justified. The impugned order is set aside - appeal allowed. ISSUES: Whether the transaction value declared under Section 14 of the Customs Act can be rejected solely on the basis of contemporaneous exports by other exporters at a higher price.Whether the Customs authorities can disregard the declared export value without evidence of additional consideration, financial flow back, or related-party transactions.Whether the adoption of a higher unit price based on contemporaneous exports without verifying quantity and quality is legally valid.The extent and manner in which the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 apply to redetermination of export value. RULINGS / HOLDINGS: The transaction value declared under Section 14 of the Customs Act cannot be disregarded without 'cogent reasons' or evidence doubting the genuineness of the transaction, including additional consideration or related-party influence.Rejecting the declared transaction value merely on the ground that contemporaneous exports by other exporters are at a higher value is not correct in the absence of any proof of extra financial consideration or flow back.The adoption of a higher unit price based on contemporaneous exports without ascertaining the 'quantity and quality' of the goods exported is improper and cannot form the basis for rejection of declared value.In the absence of any allegation or evidence of related-party transactions or non-sole consideration, the declared transaction value as per the Sales Agreement and Bank Realisation Certificate (BRC) must be accepted.The impugned order rejecting the declared value and confirming differential duty on the basis of higher contemporaneous export prices is set aside. RATIONALE: The Court applied the statutory framework under Section 14 of the Customs Act, 1962, which defines 'transaction value' as the 'price actually paid or payable' when buyer and seller are unrelated and price is the sole consideration.The Customs Valuation (Determination of Value of Export Goods) Rules, 2007, particularly Rules 3(1), 4, 5, and 6, were examined to determine the conditions under which declared export value can be rejected or redetermined.Precedent decisions were relied upon, including rulings affirming that declared transaction value cannot be rejected without establishing that price is not the sole consideration, or that buyers and sellers are related, or that additional consideration exists.The Court emphasized the requirement for the Customs authorities to provide 'reasons supported by material' before rejecting declared transaction value, as per the proviso to Section 14(1) and Rule 4(2) of the Valuation Rules.The Court noted that mere comparison with contemporaneous exports at higher prices is insufficient without verifying similarity in 'quantity and quality' and without documentary evidence.The decision aligns with the Supreme Court's affirmation that the declared price is a 'deemed value' and must be accepted unless cogent reasons exist for rejection.
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