TaxTMI 
TaxTMI 
2022 (12) TMI 732
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....ver, learned consultant for the Respondents specifically submitted that he was not pressing on the competence of the officers of DRI to issue the SCN as that issue is pending before the Supreme Court in a Review Petition filed by the Revenue. He prayed that the appeals may be decided on merits. 4. Officers of DRI received intelligence and suspected that the goods imported by the Respondent importers were mis-declared, undervalued, imported in violation of the restrictions on imports imposed by the Ministry of Electronics and Information Technology [MEITY] and initiated investigations and issued Show Cause Notices [SCN] proposing to: a) reject the declared values of the imported goods under Rules 12 of the Customs Valuation (Value of imported goods) 2007[Rules] and re-determine it under Rule 7; b) confiscate the goods under sections 111(d) and 111(m) for violation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 [IPR Rules] ; c) confiscate the goods under sections 111(d) and 111(m) for importing the goods without obtaining an NOC from Wireless Planning and Coordination wing of MEITY; and d) impose penalties under section 112(ii) and 114AA of th....
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....ppeal No. 51766 of 2021 of Wall Street Impex Bill of Entry where the transaction value was accepted by Commissioner (Appeals) S.No. Bill of Entry Number and date Original authority Commissioner (Appeals) 1 5369883 dated 26.2.2018 Accepted the transaction value Accepted the transaction value Bills of Entry where the transaction value was rejected and matter was remanded for determining the value based on contemporaneous imports by Commissioner (Appeals) S.No. Bill of Entry Number and date Original authority Commissioner (Appeals) 1 5186126 dated 13.2.2018 Re-determined value under Rule 7 Remanded with direction to re-determine duty on the basis of contemporaneous imports 2 5185599 dated 13.2.2018 Re-determined value under Rule 7 Remanded with direction to re-determine duty on the basis of contemporaneous imports Appeal No. 50065 of 2021 of Forever Exports Bills of Entry where the transaction value was accepted by Commissioner (Appeals) S.No. Bill of Entry Number and date Original authority Commissioner (Appeals) 1 5348229 dated 24.2.2018 ....
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....tion to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the ....
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.... the sole consideration for the sale; e) the manner of determination of value in respect of goods in any other case; and f) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section. 14. The Valuation Rules were framed as per the second proviso to sub-section 1 of section 14. It has 13 Rules in all of which Rules 1 and 2 are Preliminary rules. Rule 3 states that subject to Rule 12, the value shall be the transaction value adjusted according to Rule 10. Rule 10 provides for certain costs to be included in the transaction value. Rule 12 provides for the proper officer to reject the transaction value if he has reason to doubt its truth and accuracy. Thus, unless the proper officer rejects the transaction value under Rule 12, the valuation has to be based on transaction value as per Rule 3 with some additions, if necessary, as per Rule 10. 15. Rule 3 further provides that if the valuation cannot be done under that Rule, i.e., as per the transaction value with additions as per Rule 10, the....
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....lar goods and it is not possible to determine value following deductive method, then value must be determined through computation (Rule 8) g) If the importer so chooses, computational method may be adopted without examining the deductive method first (Rule 7). h) If the transaction value is rejected and there is no value of identical goods or similar goods and if it is also not possible to determine the value through deductive method or computational method, then value may be determined through the residual method by the officer following the above principles (Rule 9). 18. The next question which arises is when can the proper officer reject the transaction value. Rule 12 reads as follows: 12. Rejection of declared value. - (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in 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....
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....er can, in the first place call for information and evidence if he has reason to doubt, at the second stage, he should have not just some reason to doubt but a reasonable doubt. If he has such reasonable doubt, then the transaction value can be rejected. The grounds on which the proper officer may raise doubts about the truth and accuracy of the transaction value have been illustrated in explanation 1 (iii) to Rule 12. The list is inclusive and not exhaustive. 20. Thus, if the proper officer has reasonable doubt about the truth or accuracy of the value declared, it can be rejected. If this threshold is crossed or is undisputed, then we need to examine which of the Rules 4, 5, 7, 8 or 9 should be applied and if the sequence in which these Rules must be applied has been correctly followed. 21. In these two appeals, in respect of some Bills of Entry as indicated above, the original authority and the Commissioner (Appeals) have not rejected the transaction value under Rule 12. The case of the Revenue is that they should have rejected the transaction value in respect of these Bills of Entry as proposed in the SCN. The original authority found that none of the condition....
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....ds 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. 25. Both the lower authorities have found that the grounds for rejection of transaction values in respect of some Bills of Entry were absent in the case. We do not find anything in the appeal which convinces us that there was indeed not only a reason to doubt but also reasonable doubt which would warrant rejection of the transaction value under Rule 12. The fact that DRI officers had obtained a certificate from the Chartered Engineer is irrelevant to the case. The Chartered Engineer's certificate determines value through Deductive method (as per Rule 7). Valuation under Rule 7 becomes relevant only if the requirements for rejection of the transaction value under Rule 12 are first met and then it is also found that the value cannot be determined as per Rules 4 and 5. We, therefore, uphold the decision of the Commission....