2025 (7) TMI 1786 - AT - Customs

Reassessment of Imported Goods Value Must Follow Valuation Rules, NIDB Data Alone Insufficient for Enhancement

M/s. Raj Match Products Versus Commissioner of Customs, Tuticorin

The CESTAT Chennai held that reassessment of imported goods' value without following the prescribed Valuation Rules procedure was improper. The Customs ... Enhancement of value of imported goods - Slack Wax - reassessment of the impugned Bills of Entry was conducted without adhering to the prescribed procedure under the Valuation Rules - invoice value may be disregarded and duty assessed according to NIDB data without specific evidence indicating that the invoice values do not represent the actual transaction value or not - HELD THAT:- The Customs National Import Database (NIDB) is a comprehensive database maintained by the Customs Department, which has import data captured from the BE at all Customs stations on a daily basis. It provides near real-time access to data on imported goods, allowing for comparisons with contemporaneous import prices and current international prices. While this data by itself would not be determinative of the transaction value, it can be used to verify whether the values declared by the importer were commensurate with contemporaneous import prices as well as current international prices of identical and similar goods, giving room to doubt the value declared. While the NIDB data may serve as a guide for customs officers, however it cannot be directly applied without referring to specific Bills of Entry, data of which is given to the importer to defend his case. The specific rule of the Valuation Rules as per which the value is sought to be reassessed should also be disclosed. The impugned order is set aside - appeal allowed. ISSUES: Whether the invoice value declared by the importer can be disregarded and replaced by an enhanced value based on Customs National Import Database (NIDB) data without specific evidence that the declared value does not represent the true transaction value under Section 14 of the Customs Act, 1962.Whether the reassessment of value under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 was conducted in accordance with the prescribed procedure, including providing the importer with relevant data and an opportunity to defend the declared value.Whether the burden of proof lies on the importer to establish the correctness of the declared value or on the revenue to justify enhancement of value.Whether the concept of 'deemed price' under Section 14 of the Customs Act, 1962 applies post-amendment w.e.f. 10-10-2007.Whether reliance on DRI Alert Circulars and NIDB data alone is sufficient to reject declared transaction value without corroborative evidence. RULINGS / HOLDINGS: The invoice value declared by the importer cannot be disregarded and replaced solely on the basis of NIDB data without specific evidence indicating that the invoice values do not represent the actual transaction value; the NIDB data 'would not be determinative of the transaction value' but may be used to 'verify whether the values declared by the importer were commensurate with contemporaneous import prices.'The reassessment of value must follow the prescribed procedure under the Valuation Rules, including providing the importer with the specific Bills of Entry data and the rule under which reassessment is sought, which was not done; hence, the reassessment was flawed.The burden of proof lies on the revenue to establish the necessity and veracity of the alternate value adopted; there should not be a reverse burden on the importer to prove the negative.The concept of 'deemed price' under Section 14 of the Customs Act, 1962 'had been given up subsequent to the amendment made to section 14... w.e.f. 10-10-2007,' and thus the value declared is to be the 'transaction value' or 'price actually paid or payable' without deeming it to be the price at which like goods are ordinarily sold.Reliance solely on DRI Alert Circulars and NIDB data without tangible material or specific evidence is insufficient to reject the declared transaction value; mere suspicion, conjectures or perceptions cannot constitute substantial evidence under Section 14 of the Customs Act, 1962.The impugned order is set aside due to the flawed valuation process and violation of the principles of natural justice and statutory procedure, and the appeal is allowed with consequential relief to the importer. RATIONALE: The Court applied the statutory framework under Section 14 of the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, emphasizing that 'the value of the imported goods... shall be the transaction value,' defined as 'the price actually paid or payable.'The Court relied on precedent that the transaction value must be determined based on concrete evidence, not on 'mere suspicion, conjectures or perceptions,' and that the burden of proof rests on the revenue to justify any value enhancement.The Court noted the amendment to Section 14 of the Customs Act, 1962 effective from 10-10-2007, which eliminated the concept of 'deemed price,' thereby requiring strict adherence to the transaction value principle.The Court highlighted procedural defects, including failure to share NIDB data and relevant Bills of Entry with the importer before reassessment and failure to provide an opportunity to rebut, violating principles of natural justice and the prescribed valuation procedure.The Court distinguished the reliance on DRI Alert Circulars and NIDB data as mere guides rather than determinative evidence, underscoring that reassessment must be supported by tangible material and proper procedural compliance.There was no dissenting or concurring opinion recorded.