2024 (5) TMI 428 - AT - Customs

Department fails to prove undervaluation of float glass imports due to flawed price comparison methodology

M/s Bothra International Versus Commissioner of Customs (Prev.), Shillong

CESTAT Kolkata set aside the lower authority's order rejecting the department's upward revision of declared import price for float glass sheets. The ... Valuation of imported goods (Float Glass Sheets) - Transaction value - Compliance with directions of the Tribunal in Remand Proceedings - Penalty - revision for assessment purpose - Whether the evidence relied upon by the department for upward revision in the declared import price can be accepted as contemporaneous and is in accordance with Rule 5 of the CVR - Prescriptions of the principles of natural justice - HELD THAT:- We note that the appellant has imported more than double the quantity of float glass sheets vide three Bills of Entry against the one offered for comparison with the case at Sl.No.3 ; whereas as regards the other case offered for purpose of comparison, the imported quantity is much less than even 25%. Therefore, it cannot be said that the appellant’s imports of float glass sheets were at comparative commercial levels with that of the two impugned Bills of Entry. We also find no exercise of conversion of prices from dollars to rupees, in the order, which is so necessitated for rendering a meaningful comparison as the two tables Sl.No. (ii) & (iii) above indicate the rate/sqm in rupees, while that of for the importer, the appellant importer mentions the same in US$. Elsewhere in the adjudication order in Para 3.9 the price for 2 mm, 3mm of clear float glass for imports by Jain International in March, 2007, upon finalization is indicated as 1.15 US$ / sqm. & 1.72 US$ per sqm. However, with no quantity indicated, mere mention of the unit price is inconsequential. Therefore, that statistics too is rendered meaningless and offer no valued comparison. Further, it is too well known that the price of float glass sheets would vary as per its dimension and quality (i.e. the level of impurities present). We find no discussion on these aspects in the adjudication order, though the imports indeed as stated earlier have been made directly from a manufacturer-exporter. We also note that the importer has also doubted the department’s ascertainment of the price of float glass sheet adopted @ Rs.29 per mm, per sqm, as there is no such float glass in trade of 1 mm thickness and there is no counter thereto from the side of the department. Hence, we are not convinced with the adoption of the revised transaction value based on comparisons as offered, and note that the Department’s case cannot be sustained on the basis of evidences as relied upon for the aforesaid reasons and discussions. Thus, we set aside the impugned order of the lower authority under challenge and allow the appeal with consequential relief, if any, as per law. Issues involved:The valuation of imported goods (Float Glass Sheets) and revision of declared transaction value for assessment purpose.Valuation of Imported Goods:The Tribunal noted that in the denovo adjudication proceedings, there was no specific mention of the direction given in the 1st round of litigation to furnish import details to the importer. However, it was found that the relied upon documents were provided to the appellant, and there was no protest from the appellant. The Tribunal considered this as substantial compliance with the directives.Revision of Declared Transaction Value:The department rejected the declared value of the imported goods and re-assessed the goods based on allegedly contemporaneous evidences, which the appellant vehemently disputed as comparable. The department sought to re-workout the transaction value by adopting values from allegedly identical imports of Float Glass Sheets. The question for determination was whether the evidence relied upon by the department for upward revision in the declared import price can be accepted as contemporaneous and in accordance with the Customs Valuation Rules.The Tribunal analyzed the evidence presented by the department for comparison and found discrepancies in the comparison offered. The imports used for comparison were not entirely relevant as they were not of the same dimensions and quantities as the appellant's imports. Additionally, there was no conversion of prices from dollars to rupees for a meaningful comparison. The Tribunal also noted that the price of float glass sheets varies based on dimensions and quality, which was not discussed in the adjudication order.Based on the above analysis, the Tribunal was not convinced with the adoption of the revised transaction value for the imported goods. Citing relevant case laws, the Tribunal set aside the impugned order of the lower authority and allowed the appeal with consequential relief, if any, as per law.