TaxTMI 
TaxTMI 
2024 (2) TMI 682
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....undertaken by the said importer. That based on a comparison of the value of imported Flash memory cards at various other Customs station it was alleged that the value declared by the Appellant was grossly undervalued. 1.1 The original adjudicating authority rejected the value declared by the appellant and re-determined the value of goods as per NIDB data under Rules of Customs Valuation Rules, 2007 and assessed bills of entry. Therefore, the Appellant challenged the assessment before the Commissioner (Appeals). However, the Learned Commissioner (Appeals) vide impugned Order-In- Appeal No. (AHD/CUSTM/000/APP/372 - 15 -16) dated 29.02.1026 has upheld the order of original adjudicating authority. Aggrieved by the said Order in Appeal, the Appellant has filed this appeal. 2. Shri Vikas Mehta, Learned Counsel appearing on behalf of the Appellant submits that the lower authorities have erred in invoking the provisions of Rule 5 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The Learned Adjudicating authority without any ground for rejection of declared value have directly invoked Rule 5 of the Customs Valuation Rules, 2007. 2.1 Without prejudice to the ab....
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....nation without any objection so being raised in terms of mis-declaration in the first place. He has placed reliance on the following decisions:- Metro Tyre vs. Collector - 1994 (74) ELT 964 West Cost Papers Mills Ltd. vs Commissioner - 2001 (130) ELT 259 Liladhar Pasoo Forwarders P. Ltd vs Commissioner of Customs - 2000 (122) ELT 737 (T). Hindustan Steel Ltd. vs State of Orissa AIR 1970 SC (253) Akbar Badruddin Jiwani vs Collector of Customs 1990 (47) ELT 161 (SC) Hari Impex vs. Collector of Customs 1999 (105) ELT 503 Amba Exports vs. Commissioner of Customs 2006 (199) ELT 734 Asha Enterprises vs. Collector of Customs 1998 (100) ELT 441 Eicher Motors Ltd. vs Union of India 1999 (106) ELT 3 (SC) 3. Shri Prashanth Tripathi, Superintendent (AR) appearing on behalf of the Revenue has reiterated the findings of the impugned order. 4. Heard both the sides and perused the records. 4.1 The dispute in the present case is regarding the valuation of goods that were imported by the Appellant. The Assessing Authority re - assessed the imported goods at values that were higher than that declared by the Appellant in the Bills of Entry. The Revenue has enhanced the value of th....
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....the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not 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 di....
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....lves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents." From a cursory reading of the above provisions, it is evident that Rule 5 is to be read subject to Rule 3 which should be read with Rule 12 of the Customs Valuation Rules, 2007 which brings us down to the very essence of the Valuation Rules that in order to re-determine assessed value, transaction value should be rejected based on cogent reasons and evidence. The transaction value of the appellant has been rejected merely on the ground that similar goods have been imported at higher value at various other custom stations without providing any evidence in support of their claim and failing to examine the applicability of Rule 12 of Customs Valuation Rules in the present case. Reference has been made to the judgement laid down by the ....
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.... area in which the goods may be resold; or iii. do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3)." 7. 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 exceptions, the Customs authorities are bound to assess the duty on the transaction value. 8. The respondent's submission is that the phrase "the transaction value" read in conjunction with the word "payable" in Rule 4(1) allows determination of the ordinary international value of the goods ....
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....r transaction, then the other Rules which refer to other transactions and data would become redundant. 12. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules. 13. The Assistant Collector in this case determined the value of the imported goods under Rule 8. The question is whether he should have determined the transaction value under Rule 4 at the price actually paid by the appellant for the 1989 bearings. Naturally, if Rule 4 applies to the facts of this case, the Assistant Collector's reasoning under Rule 8 must, by virtue of language of Rule 3(ii), be set aside. 14. The Assistant Collector appears to have proceeded on the law as it was prior to the 1988 Rules when 'special considerations' on the basis of which a transaction was held not to be an ordinary sale in the course of international trade within the meaning of Section 14(1), had not been statu....
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....t has mis- declared the price actually paid. Nor was there a misdescription of the goods imported as was the case in Padia Sales Corporation. It is also not the respondent's case that the particular import fell within any of the situations enumerated in Rule 4(2). No reason has been given by 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 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 y....
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....o establish goods of contemporaneous imports are similar to the goods of the assessee. We observe that in the present case no effort was made by the adjudicating authority to ascertain quality, quantity and characteristics of the goods of the contemporaneous import, the authorities have failed to carry out any test to ascertain that the goods of contemporaneous import are similar under what circumstances. Only reports of NIDB have been relied upon. No assessment with regards to comparable quantity and quality of the goods have been established by the Department when re-assessing the value of the said goods. Based on the facts we note that the data relied upon by the department does not wholly correspond to the time at which the investigation was conducted and different parameters ought to have been considered while adjudicating upon such serious allegations. 4.5 We note that this was erroneous on the part of the Department as they have not carried out proper analysis towards the nature, characteristics, and quantity of the goods before re - assessment under Rule 5.We find that identical issue has been considered by this tribunal in the case of Sedna Impex India P Ltd v CC - Mundra....
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....artment. What has been decided by settled law is woefully lacking in the present proceeding, while rejecting transaction value. Rejection is therefore improper. 11. Above failure of the department in the instant case makes the impugned order fit for setting aside, we therefore order accordingly." Therefore, since no other material has been relied upon to enhance value of the said goods other than the NIDB data, and department was unable to adduce evidence in support of their claim as regards undervaluation, the same is insufficient to establish that the assessee have suppressed the value. 4.6 As regards the alleged violation of Section 111(m) of the Customs Act, the said provision has been produced below: - "SECTION 111. Confiscation of improperly imported goods, etc . - The following goods brought from a place outside India shall be liable to confiscation:- (m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to ....