1995 (2) TMI 206 - AT - Customs

Customs Valuation Rules upheld in appeal, highlighting flaws in assessable value determination and need for transaction value adherence.

SURYA PRODUCTS Versus COLLECTOR OF CUSTOMS, COCHIN

SURYA PRODUCTS Versus COLLECTOR OF CUSTOMS, COCHIN - 1995 (78) E.L.T. 249 (Tribunal) Issues:1. Determination of assessable value based on quotation from Taiwan suppliers.2. Application of Customs Valuation Rules in fixing assessable value.3. Consideration of past import invoices and local market prices in valuation process.4. Relevance of relationship between buyer and seller in determining transaction value.Analysis:Issue 1: The Collector relied on a quotation from Taiwan suppliers to determine the assessable value of imported goods. The appellants argued that the quotation should not be considered as representing contemporaneous importation under Section 14(1)(a) of the Customs Act, 1962. Despite the allegation of undervaluation based on the quotation, the Collector discarded it and decided the value under Section 14(1)(b) without specifying the rule adopted. The appellants cited case law to support their stance.Issue 2: The respondents contended that the Collector rightfully adopted the quotation from the same country of origin and cited case law to support the validity of using quotations for valuation purposes. The Collector's adjustments in arriving at the assessable value were deemed appropriate, considering relevant factors affecting the price of goods.Issue 3: The Collector's method of determining assessable value by considering the selling price of umbrellas in the local market and deducting the value of components was found to be inconsistent with the Customs Valuation Rules. The Collector failed to follow the sequential steps for value determination as outlined in the Rules and did not specify the rule under which the assessable value was fixed. Additionally, there was a lack of evidence of contemporaneous imports at the prices in the quotation.Issue 4: The relationship between buyer and seller was considered in the context of determining transaction value. The appellants provided sales confirmations from Taiwan, which predated the quotation relied upon by the Department. The Collector's observation that prices of umbrella frames vary due to style and finish emphasized the need for a firmer basis for determining assessable value as per the Valuation Rules.In conclusion, the rejection of the invoice value as not representing the transaction value of the goods was deemed unfounded. The appeals were allowed, granting relief to the appellants based on the inconsistencies in the valuation process and the failure to adhere to the Customs Valuation Rules.