2025 (10) TMI 1381 - AT - Customs

Customs valuation must follow statutory rules; DRI suggestions cannot replace the prescribed valuation sequence.

Customs valuation of imported goods cannot be re-determined merely on a DRI chart or suggested value; if doubt arises about the declared transaction ... Rejection of the declared value under Rule 12 of the Customs Valuation - Redetermination of the imported goods - valuation based on the DRI suggestion - imported Polyurethane coated fabrics in rolls and declared the transaction value in the Bills of Entry - Sequential application of valuation rules - reasonable doubt about the truth and accuracy of the transaction value. Rejection of declared value - HELD THAT: - The Tribunal held that once the proper officer had reason to doubt the declared transaction value, the course prescribed in law was to seek further information and, if doubt still persisted, reject the declared value under Rule 12. Thereafter, the value had to be redetermined by proceeding through the applicable valuation rules in the prescribed sequence. The adjudicating authority did not follow that statutory method and instead adopted a value suggested by DRI. Since the Act confers the power to fix tariff values by notification upon the CBIC under section 14(2), and does not confer any power on DRI to suggest or decide values for a particular ICD, reliance on the DRI chart was contrary to law. The appellate authority also erred in affirming such determination. [Paras 6, 7, 8, 9] The valuation adopted on the basis of the DRI chart was set aside, and the appeal was allowed with consequential relief. Final Conclusion: The Tribunal held that customs value could not be redetermined on the basis of a DRI valuation suggestion dehors the statutory scheme. As the authorities had failed to follow the prescribed valuation rules, the impugned order was set aside and the appeal was allowed with consequential relief. Issues: Whether the declared value of imported goods could be rejected and re-determined on the basis of a value suggested by the Directorate General of Revenue Intelligence instead of following the statutory valuation scheme.Analysis: The imported goods were found to differ in thickness and weight from the description declared in the Bills of Entry, which led the adjudicating authority to doubt the declared transaction value. Even assuming such doubt, the statutory scheme required recourse to Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for rejection of the declared value, followed by re-determination in the prescribed sequence under Rules 4, 5, 7, 8 and 9. The value was instead fixed solely on the basis of a chart prepared by the Directorate General of Revenue Intelligence for a particular ICD, but the Customs Act, 1962 does not confer any power on that authority to determine or suggest values. The power to fix tariff values by notification lies under section 14(2) of the Customs Act, 1962 with the competent statutory authority, not with the investigating agency.Conclusion: The valuation based on the DRI suggestion was unlawful and the impugned orders could not be sustained. The appeal was allowed and the order below was set aside with consequential relief to the appellant.