TaxTMI 
TaxTMI 
2023 (8) TMI 66
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....titive prices, a query was raised from the importer to provide material/evidence to justify the declared value in terms of Section 17(3) of the Customs Act, 1962. In response, the importer submitted his reply, however, the same was not accepted. The assessing officer vide Order-in-original dated 17.02.2021 rejected the declared value under Rule 12(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred as CVR, 2007) on the ground that the declared value of impugned goods, i.e., Rs. 107/- per kg. was lower than the value of similar goods being cleared at Rs. 157/- to Rs. 169/- per kg. as per the details of bills of entry given in Table 'B'. 3. Being aggrieved, by the said order, the importer filed appeal which find favour with the Commissioner (Appeals). Referring to the provisions of Section 14 and 17 of the Customs Act, 1962 and Rule 12 of CVR Rules, 2007 and also various decisions on the subject, he concluded that the assessing officer failed to elaborate as to how the bills of entries referred for enhancement are comparable with the goods imported through disputed bills of entries and in view thereof held that the rejection of ....
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.... in this behalf: Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation 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 rat....
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.... related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods: Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurred by the seller in sales in which he and the buyer are....
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....rity, which is quoted below:- BE Number Bill of Entry date Description Custom House Quantity Unit quantity code Unit Ass. Value in Rs. 9941210 14.12.20 Zinc scrap as per ISRI saves/Scope/Shelf/Score (previous BOE vide IRN No. 2020121400019524 UPLOADED) INBFR6 17156 KGS 156.78 9637838 20.11.20 Zinc scrap Saves/Scope/Scabs/Score as per ISRI (FRA reference No. KL-2020-AI-21-011482) INSTT6 24206 KGS 159.12 9981563 16.12.20 Zinc scrap Saves/Scope/Scribe/Shelf as per ISRI INAPL6 19528 KGS 159.47 9842033 05.12.20 Shredded zinc Scrap Saves/Scope as per ISRI INKKU6 25082 KGS 168.78 2054387 21.12.20 Zinc Scrap Saves/ Scope as per ISRI INKKU6 26318 KGS 169.08 Perusal of the above chart do not show that the imports are of identical goods on same commercial level and transaction. Relying on the decision of this Tribunal in the case of SPL Enterprises vs. Commissioner of Customs, New Delhi -2018 (363) ELT 881 (Tri. Del.), it is not clear from the aforesaid details given in the table as to how the said bill of entries were compared with the present bill of entries. As n....
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.... (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; (g) "transaction value" means the value referred to in sub-section (1) of section 14 of the Customs Act, 1962;" The said two provisions have been considered in a recent decision of the Tribunal in the case of Haripriya Traders vs. Commissioner of Customs, Cochin (2023) 5 CENTEX 209, where the test of 'quality assessment' was referred for ascertaining the nature of goods under comparison. The observations made in para 4.7 are as under:- "4.7 A plain reading of the definition of the term "similar goods" makes it clear that the goods being compared must have like characteristics and like component material, which enable them to perform the same functions and to be commercially interchangeable with the go....
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....alues between Rs. 83.26 to Rs. 120.97 per kg. The said portion of the order refers to at least four bills of entries declaring assessable value of less than Rs. 85 per kg. Interestingly, the order in original also records that the imported goods being aluminium scrap was not a homogeneous commodity and therefore, cannot be evaluated on the basis of the samples or lab testing. Further, the order holds that it was very difficult to find any identical/similar goods imported in India having same chemical and physical composition and that the values of aluminium scrap identical/similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import w....
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....les, 1988. The rules came into force on 16th August, 1988. Under Rule 3(i) "the value of imported goods shall be the transaction value". "Transaction value"' has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1) in turn states : "The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules." 8. Reading Rule 3(i) and Rule 4(1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4(2) namely : (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b)....
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....endment with effect from 10th October 2007, 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" is clarified in the Section itself, 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...". According to Section 14(1A) price of imported goods is to be determined in accordance with the Rules framed in this behalf. Under Rule 3(i) of the 1988 Rules, the value of the imported goods shall be the "transaction value". Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1), in turn, states that "the transaction value of the imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these Rules." It is clear from a conjoint reading of Rule 3(i) and Rule 4(1) that the adjudicating authority is bound to accept the price actually paid or payable for the go....
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....ct that the declared value represents the total amount actually paid or payable for the imported goods. Needless to add that 'reason to doubt' does not mean 'reason to suspect'. A mere suspicion upon the correctness of the invoice produced by an importer is not sufficient to reject it as evidence of the value of imported goods. The doubt held by the officer concerned has to be based on some material evidence and is not to be formed on a mere suspicion or speculation. We may hasten to add that although strict rules of evidence do not apply to adjudication proceedings under the Act, yet the Adjudicating Authority has to examine the probative value of the documents on which reliance is sought to be placed by the revenue. It is well settled that the onus to prove undervaluation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct. 12. It is a settled principle of law that the onus of proving charge of undervaluation lies on the Revenue which needs to be proved by way of producing necess....