TaxTMI 
TaxTMI 
2022 (7) TMI 466
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....ation of the value of the assessed goods by the assessing authority that the eight appeals were filed by the respondent before the Commissioner (Appeals). 2. It is not in dispute that the respondent had declared a certain value for the goods in the eight Bills of Entry. In Customs Appeal No. 52793 of 2019, the declared value was USD 1.03 per kg. The proper officer doubted the value of the goods declared by the respondent since the contemporaneous data in respect of the goods imported was USD 1.94 per kg. On being confronted with this contemporaneous data, the respondent submitted letters specifically stating that it agreed for enhancement of the value of goods to USD 1.94 per kg and that it did not desire that a show cause notice should be issued to it or personal hearing be provided to it, which requirements are set out in section 124 of the Customs Act, 1962 [the Customs Act]. It also stated that it did not desire that a speaking order, as contemplated under section 17(5) of the Customs Act, should be passed on the Bills of Entry. Similar letters were written by the respondent in the other appeals. In view of the specific requests made in the letters that were submitted by the....
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....(Appeals) are reproduced below: "5.3 The appellant has contended that the acceptance of enhanced value proposed by the Revenue during assessment and clearance to save demurrages by the appellant does not preclude from challenging the enhancement by way of appeal. I find considerable force in the contention of the appellant. The issue as to whether an assessee can file an appeal against assessment made in respect of Bill of Entry has been settled by judicial pronouncements. It is settled legal proposition that there is no estoppel in taxation matters. The Hon'ble Supreme Court in the case of Dunlop India Limited Vs. UOI reported in 1983(13) ELT 1566(SC) has laid down that even assuming that there is an acceptance it does not preclude the assessee from challenging by way of appeal as there cannot be an estoppel against law. Similar view was held in [2015(329) ELT 307(T)] and 2016(343) ELT 963(T). 5.4 The appellant has assailed that the enhancement of assessable value is arbitrary and illegal as the practice of not making the assessment on the declared value in terms of the mandate of Section 14 of the Customs Act, 1962 read with Rule 3 of Customs Valuation (Determin....
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....'ble CESTAT vide Final Order No. C/A/51690-51694/2016-CU(DB) dated 27.04.2016 held that for rejecting the transaction value, first it has to be rejected as incorrect value and there being no evidence to show that the importer has paid over the above the transaction value to the seller of goods, there is virtually no reason to reject the transaction value. Similar view has been held by Tribunal in Final Orders C/A/52972/2016 dated 08.08.2016 and C/A/52685-86 dated 27.07.2016. 5.11 Hon'ble Supreme Court in the case of Noida Vs. M/s Sanjivani Non-Ferrous Trading Pvt. Ltd. (Civil Appeal No. 18300-18305/2017) held vide judgment dated 10.12.2018 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. That the declared price could be rejected only with cogent reasons by undertaking the exercise as to on what basis the assessing Authority could hold that the paid price was not the sole consideration of the transaction value. Since there is no such exercise done by the Assessing Authority to reject the declared in the Bills of Entry, Order-in-Original was therefore clearly er....
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....he provisions of section 14 of the Customs Act and rule 3 of the Valuation Rules; and (viii) Reliance has been placed upon the order passed by the Tribunal in Commissioner of Customs vs. Hanuman Prasad & Sons [MANU/CE/0151/2020], wherein similar orders passed by the same Commissioner (Appeals) were set aside and the appeals filed by the Department were allowed. 6. Shri Abhishek Jaju, learned counsel for the respondent made the following submissions: (i) The acceptance of the enhanced value proposed by the Department does not preclude the assessee from challenging the enhancement through an appeal as there cannot be an estopple against law in taxation matters. In support of this contention reliance has been placed upon the decision of the Supreme Court in Dunlop India Ltd. vs. Union of India [1983 (13) ELT 1566 (SC)]; (ii) Section 17(5) of the Customs Act requires the adjudicating authority, in cases of re-assessment under section 17(4) of the Customs Act, to pass a speaking order. In fact, by a letter dated 15.03.2019 the respondent had requested the adjudicating authority to pass speaking orders in respect of the eight Bills of Entry but speaking orde....
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....n the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule(1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of....
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....or section 50 and the self-assessment of goods referred to in sub-section (1) and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary. Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria. (3) For the purposes of verification under sub- section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessment done under sub- section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those ....
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....e value of the imported goods at a particular value, but on being shown contemporaneous data, they agreed that the value of the goods should be enhanced. The importers also specifically stated that they did not want to avail of the right conferred on them under section 124 of the Customs Act and, therefore, they did not want any show cause notice to be issued to them or personal hearing to be provided to them. The importers also specifically stated that they did not want a speaking order to be passed on the Bills of Entry. It needs to be noted that section 124 of the Customs Act provides for issuance of a show cause notice and personal hearing, and section 17(5) of the Customs Act requires a speaking order to be passed on the Bills of Entry, except in a case where the importers/exporters confirm the acceptance in writing. 16. It is no doubt true that the value of the imported goods shall be the transaction value of such goods when the buyer and the seller of goods are not related and the price is the sole consideration, but this is subject to such conditions as may be specified in the Rules to be made in this behalf. The Valuation Rules have been framed. A perusal of rule 12(1) ....
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....e proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 16. Proper officer can therefore reject the declared transactional value based on certain reasons to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression grounds for doubting the truth or accuracy of the value declared has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out some of the conditions when the reason to doubt exists. The instances mentioned in clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of th....
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....r the provisions of sub-rule (3) below: (3) ******** ******** ******** (4) If the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9." 22. The very fact that the importers had agreed for enhancement of the declared value in the letters submitted by them to the assessing authority, itself implies that the importers had not accepted the value declared by them in the Bills of Entry. The value declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the importers had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under rule 3(1) for the reason that the declared value has been rejected under sub rule 2, that the value of the imported goods is required to be determined by proceeding sequentially through rule 4 to 9. As noticed above, the importers had accepted the enhanced value and t....
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....eing available and valuation earlier having been consented, the onus will be on the appellant to establish that the valuation as per his consent suffered from fatal infirmity and such onus has not been discharged. Further, valuation of such goods requires their physical inspection and so re-assessment of value in the absence of goods will not be possible. The case of Eicher Tractors v. Union of India (supra) cited by the appellant is not relevant here as in that case there was no evidence that the assessee had consented to enhancement of value." (emphasis supplied) 24. In Vikas Spinners, the Tribunal dealing with a similar situation observed as under: "7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry d....
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....as follows: "2...............It is also to be noted that the importer had also agreed for enhancement of the price based on contemporaneous prices available with the Department. We, therefore, find no merit in the contention raised in the appeal challenging the valuation and seeking the refund of the differential duty paid by the appellants on enhancement." 27. The following position emerges from the aforesaid decisions of the Tribunal: (i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation; (ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and (iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted. 28. This is precisely what was held by this Bench of the Tribunal in Hanuman Prasad & Sons. 29. The decisions on which reliance has been placed by learned counsel for the respond....