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of <h1>Customs Tribunal Upholds Invoice Price as Assessable Value, Burden of Proof on Revenue</h1> <h3>VIKING POWER PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CHENNAI</h3> VIKING POWER PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, CHENNAI - 2000 (115) E.L.T. 100 (Tribunal) Issues Involved:1. Valuation of imported goods.2. Applicability of Rule 7 of the Customs Valuation Rules, 1988.3. Justification for rejecting the transaction value.4. Allowance of discounts on the price list.5. Burden of proof for undervaluation.Detailed Analysis:1. Valuation of Imported Goods:The appellants imported a consignment of 760 KVA gensets from Singapore and declared a value of US $ 92,117.34 FOB. The Customs department at Chennai believed this value to be lower than a previous consignment and enhanced the value to US $ 88,235. The Commissioner also imposed a redemption fine and a penalty under Section 112(a) of the Customs Act, 1962, for undervaluation.2. Applicability of Rule 7 of the Customs Valuation Rules, 1988:The appellants argued that the valuation should be determined under Rule 7 of the Customs Valuation Rules, 1988, which involves deductive value. The Commissioner rejected this argument, stating that identical or similar imported goods were not available in India for comparison. The appellants contended that the Commissioner erred by not considering 'the goods being valued' sold in India.3. Justification for Rejecting the Transaction Value:The Commissioner disallowed the 40% discount claimed by the appellants, arguing that it was not available to an ordinary buyer and enhanced the value based on a price list dated 10-8-1998. The appellants argued that the transaction value should be accepted as there was no special relationship between the supplier and the importer, and other distributors received the same discount.4. Allowance of Discounts on the Price List:The Commissioner disallowed the 40% discount, stating that it was not available to ordinary buyers. The appellants countered that the discount was standard for all distributors in India and supported their argument with a letter from the supplier and various judicial decisions, including a Supreme Court ruling that higher discounts negotiated by an importer do not necessarily indicate undervaluation.5. Burden of Proof for Undervaluation:The Tribunal emphasized that the burden of proving undervaluation lies with the Revenue. The Commissioner failed to provide sufficient evidence to reject the transaction value. The Tribunal noted that suspicion alone, without corroborative evidence, is insufficient to prove undervaluation. The Tribunal concluded that the declared transaction value should be accepted as the assessable value under Section 14(1) of the Customs Act, 1962.Conclusion:The Tribunal allowed the appeal, holding that the price shown in the invoice shall be deemed the assessable value in terms of Section 14(1) of the Customs Act, 1962. The Tribunal found no justification for rejecting the transaction value or disallowing the claimed discount. The appeal was allowed with consequential relief, if any.
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