AI Drafter 
TaxTMI 
TaxTMI 
2006 (3) TMI 393
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....oods) Rules, 1988. Accordingly, the original authority determined the value on the basis of the Chartered Engineer's valuation. He stated that the Chartered Engineer's valuation is fair enough to be adopted for the purpose of calculation of duty. He has further stated that hence there is no reason for re-determination of correct assessable value in terms of the CEGAT order. The original authority confiscated the impugned goods under Section 111(m) of the Customs Act, 1962. He gave an option to the respondent to redeem the said goods on payment of a fine of Rs. 3 lakhs under Section 125 of the Customs Act, 1962. He imposed a penalty of Rs. 1,50,000/- under Section 112 of the Customs Act, 1962. The respondent approached the Commissioner (Appeals), who set aside the order of the original authority and allowed the appeal of the respondent. The order of the Commissioner (Appeals) is under challenge by the Revenue on the following grounds:- (i) The finding of the Commissioner (Appeals) that no Show Cause Notice was issued is not acceptable for the reason that the Show Cause Notice was dispensed with as per importer's request letter dated 19-10-2001, which....
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....declared. This mis-declaration lead to a corollary of suspecting the corresponding value declared in the Bill of Entry. (2) Show Cause Notice was not issued as requested by the importer vide their letter dated 19-10-2001. (3) The grounds for rejecting the transaction value were thoroughly discussed in the order-in-original after hearing the party during the personal hearing dt. 29-10-2001. The valuation was arrived at by referring the matter to the Chartered Engineer in terms of Para 39 of Chapter IV of Appraising Manual (Vol-I). The importer has already responded to the said certificate. (vi) The finding of the Commissioner (Appeals) that the original authority has not given any finding in terms of the Customs Act for rejecting the Transaction Value is not acceptable as the Adjudicating Authority, in para 27 of his order, discussed the reasons for rejecting the value under Rule 4 and the inapplicability of subsequent Rules 5 to 7A. Further, the order adduced the grounds for adopting the Chartered Engineer's Value, in terms of para 39 of Chapter IV of Appraiser's Manual Vol-I. When the Transactio....
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.... produced in India. The Chartered Engineer's certificate has been extracted in that order to show that he had arrived at the value based on the selling price in India. They have emphasised the point that the order of the Commissioner does not disclose how, after discarding the Transaction Value under Rule 4, the Rules 5, 6, 6(a), 7, 7(a) are not applicable to the facts of the case and whether the valuation has been arrived in all these rules or under Rule 8 thereof. It has also been observed that the order is silent about the reasons for discarding Rule 4 itself. The above infirmities in the Commissioner's order were pointed out by the CEGAT. In spite of that, the Original Authority, in the de novo order, says that there is no reason for re-determination of correct assessable value in terms of CEGAT order. This is a very clear example where the de novo order disregards the direction of the CEGAT and confirms the first order, which was set aside by the CEGAT. Further, this indicates the scant respect with which CEGAT's orders are treated by the Revenue authorities. The Commissioner (Appeals), by following the Apex Court's ruling in Eicher Tractor case, held that there is no ground f....
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.... produced in support of the declared values have been found to be manipulated. Hence, there was necessity to make a provision for rejection of Transaction Value even in the absence of situations particularised in Rule 4(2). Consequent to the WTO Valuation Committee decision 6.1, the Government of India introduced Rule 10A with effect from 19-2-1998. A careful reading of Rule 10A indicates that the proper officer should have reason to doubt the truth or accuracy or the value declared by the importer. He may ask the importer to furnish information including documents or other evidence. After receiving such information or in the absence of response from the importer, if the proper officer still has reasonable doubt, then, it shall be deemed that the value of such imported goods cannot be determined under the provisions of sub-rule (1) of Rule 4. To put it differently, Rule 10A enables the proper officer to reject the Transaction Value on reasonable grounds. It is not an arbitrary decision. Revenue has to do thorough investigation before rejecting the Transaction Value. Once the Transaction Value is rejected, the Customs Authorities have to necessarily go through sequentially Rules 5 t....
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....f exportation X. The unit prices of the identical goods in these lists varied from 80.00 c.u. to 140.00 c.u. (FOB), according to the quantity sold. The origin of all imported goods was country M, although the main suppliers of these goods to import country I were domiciled in country of exportation X. 5. The Customs administration of country I had not signed a mutual assistance agreement with the Customs administrations of countries X or M. The Customs administration wrote to supplier XCO and manufacturer MCO asking for information on the price of the goods. No answer was received. 6. The Customs administration searched for suppliers on the Internet and found many offers for the sale of identical goods, whose retail sale prices for export were between 123.99 c.u. and 148.00 c.u. 7. The Customs administration notified ICO, in writing, that it had reasons to doubt the truth of the declared transaction value based on the facts set out above, but primarily based on the low value. The administration asked the importer to present any further evidence, i.e., commercial correspondence and/or any other document confirming that the invoice price was the total price ac....
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....justed as necessary in accordance with Article 8; (ii) the audit did not disclose any new information and did not dispel Customs' doubts as to the truth or accuracy of the transaction value declared; Determination of Customs value: 13. The primary basis for Customs value is the transaction value, that is, the price actually paid or payable for the goods when sold for export to the country of importation, adjusted in accordance with the provisions of Article 8. 14. The price actually paid or payable should not be subject to any condition or consideration that could prevent the value from being determined on the basis of the provisions of Article 1. 15. This price may be represented by the invoice price, adjusted in accordance, with the provisions of the Valuation Agreement and, in this respect, the commercial invoice could constitute sufficient proof of the truth or accuracy of the declared value subject, of course, to Article 17 of the Agreement. 16. In accordance with Decision 6.1 of the Committee on Customs Valuation, where the Customs administration has reason to doubt the truth or accuracy of a declared value, it may....