AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 20
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....007 to order recovery of Rs. 2,28,22,168/- under section 28 of Customs Act, 1962, along with appropriate interest under section 28AA of Customs Act, 1962, besides imposing penalty of like amount under section 114A of Customs Act, 1962. 2. The primary contention of the appellant, as argued by Learned Counsel, is that the adjudication order is not only cryptic but also demonstrates absence of legal sanctity for enhancement which is evident in deployment of expressions in common use under the erstwhile rules and, probably, that which was commonplace in central excise. Setting out the background, Learned Counsel submitted that the appellant is a manufacturer of 'antenna' and 'cables' and that, in addition to production and assembly, they had been importing finished products for domestic supply which is the source of dispute over value for having been imported from an associate entity in China. He submitted that it is common ground that these did originate from manufacturing facilities of their own conglomerate but neither was this aspect concealed nor any statutory mandate breached inasmuch as the appropriate declaration of transactional engagement had been duly furnished. He pointed ....
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.... not been made available then. Reliance was placed on several decisions in valuation disputes to establish that the order was correct in all respects. 5. In view of the fundamental issues raised about the validity of re-determination of the assessable value, and the discarding of detailed submissions relating to 'transfer price policy', we need not, at this stage, detain ourselves with enlarging upon, or ascertainment from, precedent decisions relied upon by either side. 6. At the outset we take notice that the adjudication order lacks indication of any details of the imports having been considered; nor of the contemporaneity of the bills of entry adopted for benchmarking. There are also, as pointed out by Learned Counsel, liberally scattered references to 'normal price' and 'arms length' which, in the context of the specific and precise framework of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, has neither bearing on, nor contemporary relevance in, re-determination of assessable value. The claim of the appellant of declared value being in conformity with 'transfer price policy' of the conglomerate was disposed off with the finding that '24.2 Investi....
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....red for robustness beyond at this point unless followed by the stipulations in rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It was, therefore, necessary for the adjudicating authority to ascertain the assessable value of the goods, by recourse to rule 4 to 9 sequentially, with appropriate documentary and factual support. That is lacking in the impugned order and all that is perceptible is superficial reference to annexures to the show cause notice; the adoption of these, in toto and along with the derivational computation thereof, without any discussion on correctness of the formulation for adjustment of the transaction value of 'identical goods' to arrive at the applied value is not consistent with law or desired demarcation of investigation from adjudication which, increasingly so and of late, is hard put to find. 8. The issue in dispute are not on the narrated facts, nor on the discarded counters of appellant, in the impugned order but on the imperviousness of customs authorities to the rigour, prescribed by law for repudiating declared value, that is manifest in the evolution of formulations underlying the Rules framed, from time to ti....
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....sessable value through recourse to rule 3(4) therein, but without a diversion through rule 12, owing to proviso (d) below rule 3(1) and subject to rule 3(3) therein. The determination of assessable value in such circumstances of relationship, owing to operation of proviso, subordinates the operability of rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 11. The impugned order has erred in not distinguishing the intent to adopt one of the two available, but mutually exclusive, options for proceeding with 'substitute value', viz., relationship influencing price or reasons to doubt truth or accuracy of transacted price. Even that 'substitute value' which has been adopted appears to be drawn from rule 4/rule 9 evidencing uncertainty that is anathema to such re-determination. No reasons have been assigned for mixing the two either. It is also very clear from rule 3(3)(c) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 that the process of recourse to the proviso therein and determination of value should not flow from the same underlying provisions. There has, thus, been a re-determination which has no basis in law that suffi....
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....ms Valuation (Determination of Value of Imported Goods) Rules, 2007 on the basis of comparison with prices of similar or identical goods or otherwise. Instead, we find that the impugned order has referred to rule 4 and rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 in one breath without any indication of circumstances and the imports in which rule 4 would apply or those relating to rule 9 for adjustment of transaction value of identical goods should. 14. In view of the above, we find that the rejection of declared value as 'transaction value', for the purpose of assessment and for confiscation, is not in consonance with section 14 of Customs Act, 1962 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It would appear that the investigation had failed to take note of the altered paradigm of valuation and preferred to regress to an erstwhile regime that appeared more conducive to proceeding against imports; it could well be that the investigation was also undertaken far too soon after the change in rules for the evidence that had been marshaled to be fitted into the altered paradigm. We are constrained to observe so as s....