TaxTMI 
TaxTMI 
2020 (6) TMI 68
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....ent letter it was stated that the appellant have gone through the contemporaneous data of import of similar/identical goods and the appellant has agreed to enhance the assessable value from the declared value of USD 990/- PMT to enhanced value of USD 1587/- PMT. The appellant challenged the assessment of Bills of Entry before the Commissioner (Appeals) who has dismissed the appeal. Shri Deepak Kumar, Learned Consultant appearing for the appellants submits that the enhancement was made on the basis of DGOV circular dated 01/12/2016. Therefore, though it is mentioned in the consent letter that the appellant have gone through the contemporaneous import data but the price is not on the basis of any contemporaneous import but in fact it is on the basis of DGOV Circular. As regard the application of price arrived at on the basis of DGOV Circular, this Tribunal in various cases held that the notional value on the basis of DGOV circular is not correct and legal. He further submits that since the enhancement is solely based on DGOV circular and no contemporaneous data was relied upon the enhancement is illegal and on this ground itself the appeal needs to be allowed. He further submits that....
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....ant have given consent letter wherein they have mentioned that they have gone through contemporaneous import data and agreed the enhancement of the value. We find that as per the submission made by Learned Consultant on behalf of the appellant, in one particular case, i.e. Bill of Entry no. 8487132 dated 16/10/2018 of Appeal No. C/12377/2019 of Guru Rajendra Metalloys Pvt Ltd.. It is for import of 21.50 MT of Taint/Tabor aluminium scrap. The appellant showed the invoice valued at USD 990 PMT. Assessing Officer has enhanced value to USD 1587/- PMT. This enhancement of the value as explained by the learned consultant in their additional submission filed on 16/03/2020 is as under. The value of Taint/Tabor as per DGOV alert/circular comes to $2035-(22% of $2035)+ $1587/- PMT. 4.1 This clearly shows that the enhanced value is exactly the value arrived at on the basis of LME price of prime metal minus discount given in DGOV circular. This clearly shows that the enhancement of value is not on the basis of contemporaneous import data but it is based on DGOV circular irrespective of the mention made in the consent letter that the appellant have gone through the contemporaneous import ....
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.... value may be fixed by the Central Government under Section 14(2). Where the value is not so fixed, the value has to be determined under Section 14(1). The value, according to Section 14(1), shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course of international trade. The word "ordinarily" necessarily implies the exclusion of "extraordinary" or "special" circumstances. This is clarified by the last phrase in Section 14 which describes an "ordinary" sale as one "where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale ...". Subject to these three conditions laid down in Section 14(1) of time, place and absence of special circumstances, the price of imported goods is to be determined under Section 14(1A) in accordance with the Rules framed in this behalf. xxx xxx xxx 9. These exceptions are in expansion and explicatory of the special circumstances in Section 14(1) quoted earlier. It follows that unless the price actually paid for the particular transaction falls within the exceptio....
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.... the Assistant Collector for rejecting the transaction value under Rule 4(1) except the price list of vendor. In doing so, the Assistant Collector not only ignored Rule 4(2) but also acted on the basis of the vendor's price list as if a price list is invariably proof of the transaction value. This was erroneous and could not be a reason by itself to reject the transaction value. A discount is a commercially-acceptable measure which may be resorted to by a vendor for a variety of reasons including stock clearance. A price list is really no more than a general quotation. It does not preclude discounts on the listed price. In fact, a discount is calculated with reference to the price list. Admittedly in this case a discount up to 30% was allowable in ordinary circumstances by the Indian agent itself. There was the additional factor that the stock in question was old and it was a one-time sale of 5-year-old stock. When a discount is permissible commercially, and there is nothing to show that the same would not have been offered to anyone else wishing to buy the old stock, there is no reason why the declared value in question was not accepted under Rule 4(1)." 9. To the same ef....
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....nceptual meaning of value. Under Section 2(41), "value" is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is the sole repository of law governing valuation of goods. The Customs Valuation Rules, 1988 have been framed only in respect of imported goods. There are no rules governing the valuation of export goods. That must be done based on Section 14 itself. In the present case, the Department has charged the respondent importer alleging misdeclaration regarding the price. There is no allegation of misdeclaration in the context of the description of the goods. In the present case, the allegation is of underinvoicing. The charge of underinvoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is for the Department to prove that the apparent is not the real. Under Section 2(41) of the Customs Act, the word "value" is defined in relation to any goods to mean the value determined in accordance with the provisions of Section 14(1). The value to be declared in the bill of entry is the value referred to above and not merely the invoice price. xxx xxx xxx 12. However, b....
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....ble value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion." 12. The observations of the Tribunal made in the impugned judgment are to be appreciated in the light of the principles of law specified in the aforesaid judgment, inasmuch as the Tribunal has categorically remarked that the normal rule is that assessable value has to be arrived at on the basis of the price which is actually paid, as provided by Section 14 of the Customs Act and the case law referred to by it (In paragraph 5, the Tribunal referred to its own judgments which follow the aforesaid principle laid down by this Court). 13. It is, therefore, rightly contended by Mr. Dushyant A. Dave, Learned Senior Counsel appearing for the respondent that the reason given for setting aside the order that the normal rule was that the assessable value has to be arrived at on the basis of the price which was actually paid, and that was mentioned in the Bills of Entry. The Tribunal has clearly mentioned that this declared price could be re....
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....l. In that view of the matter no fault can be found with the order passed by the Tribunal setting aside the additional demand created against the assessee." 15. We, thus, do not find any merit in these appeals and dismiss the same. 4.3 In the above case, the facts were narrated in the judgment of Allahabad High Court in the same case of Sanjivani Non Ferrous Trading Pvt. Ltd. 2017 (7) GSTL 82 (Tri-All.) which is reproduced below: "2.The brief facts of Appeal No. C/70332/2016 are that during the period from 27-8-2013 to 29-12-2014 the appellant imported 843 consignments of 'Aluminium Waste & Scrap' such as "Twitch, Tense, Taint, Tabor, Troma, Tally & Zorba, etc." falling under Customs Tariff Item No. 7602 00 10. The appellant filed Bills of Entry for each consignment along with copy of purchase order and invoice. The appellant self-assess the goods in the said Bills of Entry on the basis of transaction value. The Assessing Officer rejected the self-assessment of duty made by the appellant and re-assessed the duty by increasing assessable value and levying Customs duty aggregating to Rs. 10,88,10,346/- more than duty self-assessed by the appellant put together in....
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....the consent letter, Hon'ble Supreme Court dealing with the same facts in the case of Century Metal Recycling Pvt. Ltd. (supra) passed the following order: 3. The appellant Company is stated to be engaged in the manufacture of aluminium alloys, for which they regularly import aluminium waste as a raw material for self-consumption. Imported scrap, it is accepted, falls under different code names as per specifications of the Institute of Recycling Industry. The grievance raised by the appellants is that the 2nd respondent i.e. the Principal Commissioner of Customs, Noida Customs Commissionerate and its Officers almost uniformly do not clear the consignments as per the declared transaction value in the bill of entry but insist that the appellants write a letter agreeing to pay Customs duty as per the valuation by the Customs authorities and compel them to forego their right to provisional assessment under Section 18 of the Customs Act, 1962 ('the Act', for short). The appellants, coerced and intimated, have no option but to give in and issue a letter of consent agreeing to assessment/valuation by the Customs authorities to avoid delay in clearance, levy of demurrage, ground re....
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....cord reasons at the second stage of enquiry is not expressly stipulated, albeit it has been read by us by implication in Rule 12. Being conscious that this mandate if applied to past cases would possibly lead to complications and difficulties, we would invoke the doctrine of prospective application with the direction that the past cases will be decided on a case to case basis, depending upon the factual matrix and considerations like whether the importer has asked for 'certain reasons', whether the reasons were not communicated, whether 'certain reasons' can be deciphered from the assessment/valuation order, whether misdescription or false declaration was apparent, etc. 22. In Commissioner of Customs v. Prabhu Dayal Prem Chand, [2010 (13) SCC 535 = 2010 (253) E.L.T. 353 (S.C.)] this Court had rejected the plea that the Revenue was justified in redetermining the value of brass and copper scrap on the basis of information received from London Metal Exchange on the price of the said metals on the ground that the importer was not confronted with any contemporaneous material for enhancing the transaction value. This Court affirmed the order of the Tribunal in Prabhu Dayal Prem ....
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....ssistant Collector has rejected the transaction value as declared in the bill of entry which, as noticed above, is clearly and fundamentally erroneous besides being contradictory. In the aforesaid circumstances, we do not think that the order in assessment dated 7th April, 2017 can be sustained and upheld. It is set aside and quashed. 25. Before closing, we would observe that the Valuation Alerts, as also stated by the respondents, are issued by the Director General of Valuation based on the monitoring of valuation trends of sensitive commodities with a view to take corrective measures. They provide guidance to the field formation in valuation matters. They help ensure uniform practice, smooth functioning and prevent evasion and short payment of duty. However, they should not be construed as interfering with the discretion of the assessment authority who is required to pass an Assessment Order in the given factual matrix. Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of 'certain reasons'. Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges, etc. to find out the co....
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.... "6. ............However, before rejecting the invoice price the Department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. Therefore, before rejecting the transaction value as incorrect or unacceptable, the Department has to find out whether there are any imports of identical goods or similar goods at a higher price at around the same time. Unless the evidence is gathered in that regard, the question of importing Section 14(1A) does not arise. In the absence of such evidence, invoice price has to be accepted as the transaction value. Invoice is the evidence of value. Casting suspicion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Under-valuation has to be proved. If the charge of under-valuation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege under-valuation, it must make detailed inquiries, collect material and also adequate evidence. When under-valuation is alleged, the Department has to prove it by evidence or information about....
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....ght of an explanation offered and not disputed is not in accordance with Section 14 of Customs Act, 1962. Consent at gun-point is no consent and consent of any sort cannot condone deviation from the law. 4.9 This issue was also decided by a principal bench of this Tribunal at Delhi in the case of Ankit Electronics wherein the following order was passed: Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. We propose to dispose of the stay petition as also appeal by a common order as a short issue is involved. 2. As per facts on record, the respondents filed thirteen Bills of Entry on various dates for the clearance of Ferrite magnet & Ferrite magnet rings declaring the value based upon the invoices raised by the supplier. The assessing authority did not agree with the declared value and enhanced the same. The Bill of Entry was accordingly assessed. 3. The said assessment was challenged by the respondents before Commissioner (Appeals), who observed that inasmuch as the assessing authority has not passed a speaking order giving reasons for rejection of the declared price, he set aside the assessment order....