TaxTMI 
TaxTMI 
2003 (8) TMI 423
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....d inasmuch as the contracts were not registered prior to the imports. The other issue in all these three show cause notices, to invoke the consequences of confiscation under Section 111(m) was alleged misdeclaration in respect of value. The values declared were proposed to be enhanced to US $ 1200 PMT (CIF) from those as declared in the Bills of Entry and a penalty under Section 112(a) was proposed besides confiscations under provision to Section 111(d) and (m) as mentioned above. 2. (a) As regards the liability for confiscation under Section 111(d), the ld. Commissioner found that in terms of alleged condition of DGFT Notification, which prescribes that import contracts of poppy seeds shall compulsorily be registered with Narcotics Commissioner, Gwalior prior to import and while the importers interpret the word 'import' as given under Section 2(23) of the Customs Act relying upon the Supreme Court and High Court judgments stipulating that import would constitute and commence only when the goods cross the customs barriers and/or the territorial waters and therefore the date of import and in these cases, the contracts were registered with Narcotics Commissioner, Gwalior prio....
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....le, the 90 days stipulation could be dispensed with in view of Clause 3(c) of Interpretative Note to Rule 8. Thereafter relying upon a letter of Chief Commissioner of Customs, Mumbai, dated 24-1-2001, which refers to a study report furnished by the Commissioner of Customs, Nhava Sheva showing the date to be 12-1-2001, it was held that in terms of Rule 10A of Customs Valuation Rules, 1988, the Department could reject the transaction value, if there is reasonable doubt about the truth or accuracy of the value so declared. Since in the present case the value arrived in the study report by flexible application of deductive value method in terms of Rule 8 read with Rule 7A would provide sufficient ground to reject the transaction value under Rule 10A the show cause notice does not reveal any importation of identical or similar goods at a higher price so as to invoke Valuation Rules 5 or 6 and Rule 7 provides the deductive value method, and with that method the study report has applied and arrived at CIF value of US $ 1339 PMT (CIF) for white poppy seeds, by flexible application of deductive value method of Rule 7 by virtue of Rule 8 of Customs Valuation Rules, the contemporaneous import....
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....in Para 4.4 of this decision, as regards the application of Rule 10A and other rules especially the provisions of Rule 4, as follows : - "4.4 We further find that the adjudicating authority has grossly misunderstood the legal provisions relating to determination of the value of the goods. He has "invoked" Rule 10A, which is not a substantive provision governing determination of value in the sequential scheme laid down under the Valuation Rules. That rule is a procedural provision, which is meant to act as an aid to determining as to whether it is Clause (i) or Clause (ii) of Rule 3 that will be applicable to a given case. The sequential scheme for determination of value, under the Valuation Rules, comprises Rules 3 to 8. Rule 3 reads as under : - "Determination of the method of valuation - for the purpose of these rules, - (i) the value of imported goods shall be the transaction value; (ii) if the value cannot be determined by proceeding sequentially through Rules 5 to 8 of these rules." What has been broadly laid down under Clause (i) of Rule 3 appears in specific terms under Rule 4(1) which read....
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....f the goods cannot be determined under Rule 4(1). This deeming provision contained in Rule 10A has necessarily to be pressed into service at the very initial stage under the sequential scheme. It has no role after the scheme has worked itself out." Thereafter, the Tribunal held that what was open to the proper officer under Rule 10A was to question the accuracy of the price of the goods mentioned in the documents and without arriving at any good reason for doubting the truth or accuracy of the same, not to reject the transaction value under Rule 4(1). It was not open to the Customs authorities to rely on general quotations and mere production of price list to discharge the onus cast on them to prove the existence of circumstances indicated in Section 14(1) of the Customs Act and provisions in Rule 4(2) of the Valuation Rules, resorted to rejection of the transaction value and/or the provisions of Rule 10A. Following this decision of the Tribunal, in this case also, when the 'Spice Market Weekly Bulletin and Public Ledger, UK are not found to be inapplicable, there was no reason for the Commissioner to have resorted to Rule 10A or/and rejection of the transaction value in the fac....