TaxTMI 
TaxTMI 
2019 (4) TMI 1444
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....port consignments were of brand names 'Diyas' and 'mAntra', and the enquiry proceeded to ascertain whether the goods had been correctly valued for the purposes of customs duty. On completion of the enquiry, proceedings were initiated for revaluing the current import consignment, as well as past consignments within the aforesaid window, apart from the proposal for confiscation of goods and imposition of penalties under the provisions of the Customs Act, 1962 (hereinafter referred to as the 'said Act'). A show cause notice was issued under Section 28 of the said Act, providing for recovery of duties not levied or short-levied or erroneously refunded, for any reason other than collusion or any wilful mis-statement or suppression of facts. In substance, there were really two grounds for the show cause notice: (a) that the appellant, knowingly, did not declare the brand of imported goods, and undervalued the same with the intent of evading customs duty; (b) that the appellant had imported the branded goods from its related party, and had undervalued the same to evade customs duty. 3. The aforesaid proceedings, as noticed, resulted in an adverse order against the app....
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....and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality, reputation and the existence of trade mark; (ii) produced in the country in which the goods being valued were produced; and (iii) produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods;" 5. Rule 3 provides for the value of imported goods to be the transaction value adjusted in accordance with the provisions of Rule 10. In cases where buyers and sellers are related, as alleged in the present case, the transaction value can be accepted if the relationship did not influence the price. We reproduce the relevant extracts as under: "3. Determination of the method of valuation.- ....
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....d at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments, whether such adjustment leads to an increase or decrease in the value. (2) Where the costs and charges referred to in sub-rule (2) of rule 10 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods." 8. The aforesaid Rule envisages that the transaction value of identical goods imported at the same time as the goods valued, can be applied. It is, of course, clarified that they should be substantially of the same quantity....
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....mportation of the goods being valued, the value of imported goods shall, subject otherwise to the provisions of sub-rule (1), be based on the unit price at which the imported goods or identical or similar imported goods are sold in India, at the earliest date after importation but before the expiry of ninety days after such importation. (3) (a) If neither the imported goods nor identical nor similar imported goods are sold in India in the condition as imported, then, the value shall be based on the unit price at which the imported goods, after further processing, are sold in the greatest aggregate quantity to persons who are not related to the seller in India. (b) In such determination, due allowance shall be made for the value added by processing and the deductions provided for in items (i) to (iii) of sub-rule (1)." "8. Computed value.- Subject to the provisions of rule 3, the value of imported goods shall be based on a computed value, which shall consist of the sum of:- (a) the cost or value of materials and fabrication or other processing employed in producing the imported goods; (b) an amount for profit and general expenses....
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.... assuming that to be correct, it was contended that there were imports available from two other sources, from China and Spain. These suppliers are not found to be related parties. Thus, the pricing from these two sources, with requisite adjustments for the distance or any other parameter, could always be taken as the transactional value for all the goods forming part of the twenty one consignments. 13. A further explanation offered on behalf of the appellants, in respect of the second aspect, i.e., non-declaration of the brand 'Diyas' and 'mAntra', pertaining to the consignments in question, was that the brands were not so well-known as to make a difference to the value. In fact, for the import from China, the brand 'Diyas' had been clearly mentioned. The consignments had been cleared after physical verification. In effect, the plea was that the two brands really do not attract any intrinsic market value. 14. It is a submission that the sequential application of Rules, thus, required the valuation to be done in accordance with Rules 3 to 5, before proceeding to the subsequent Rules, and it is not a case where valuation was not possible under Rules 3 to 5. 15. As an alterna....
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....has to be a sequential implementation of the Rules, i.e., that Rules 3 to 5 would have to be exhausted first, and only in the eventuality of an inability to apply the Rules would the assessing authority proceed to impose Rules 7 to 9. 20. Learned counsel for the respondent did endeavour to persuade us that since there were concurrent findings, this Court ought not to interfere, given the scope of appeal before this Court under Section 130E(b) of the said Act, and referred to the judgment in Collector of Customs, Bombay v. Swastic Woollens (P) Ltd. & Others 1988 Suppl. SCC 796, where it was observed as under: "9. ...... The decision of such a question of fact must be arrived at without ignoring the material and relevant facts and bearing in mind the correct legal principles. Judged by these yardsticks the finding of the Tribunal in this case is unassailable. We are, however, of the view that if a fact finding authority comes to a conclusion within the above parameters honestly and bona fide, the fact that another authority be it the Supreme Court or the High Court may have a different perspective of that question, in our opinion, is no ground to interfere with that findi....