TaxTMI 
TaxTMI 
2024 (11) TMI 1361
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....Mr. Krishnamohan Menon, Ms. Parul Sachdeva, Advs. for Intervenor. Mr. Harpreet Singh, SSC with Ms. Suhani Mathur, Mr. Jatin Kumar, Advs. CUSAA 26/2022 & CM APPL 22868/2022 (stay), CUSAA 27/2022 & CM APPL. 22870/2022 (stay), CUSAA 90/2022 & CM APPL. 34838/2022 (stay), CUSAA 91/2022 & CM APPL 34841/2022 (stay), CUSAA 92/2022 & CM APPL. 34911/2022 (stay), CUSAA 93/2022 & CM APPL. 34914/2022 (Interim Stay), CUSAA 94/2022 & CM APPL. 34917/2022 (Interim Stay), CUSAA 95/2022 & CM APPL. 34920/2022 (Interim Stay), CUSAA 96/2022 & CM APPL. 34923/2022 (Interim Stay), CUSAA 97/2022 & CM APPL. 34926/2022 (Interim Stay), CUSAA 98/2022 & CM APPL. 35014/2022 (Interim Stay), CUSAA 99/2022 & CM APPL. 35019/2022 (Interim Stay), CUSAA 100/2022 & CM APPL. 35028/2022 (Interim Stay), CUSAA 102/2022 & CM APPL. 35103/2022 (Interim Stay), CUSAA 103/2022 & CM APPL. 35108/2022 (Interim Stay), CUSAA 104/2022 & CM APPL. 35113/2022 (Interim Stay), CUSAA 105/2022 & CM APPL. 35679/2022 (Interim Stay), CUSAA 107/2022 & CM APPL. 35731/2022 (Interim Stay), CUSAA 108/2022 & CM APPL. 35734/2022 (Interim Stay), CUSAA 109/2022 & CM APPL. 35737/2022 (Interim Stay), CUSAA 110/2022 & CM APPL. 35897/2022 (Interim Stay), C....
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.... In the course of hearing this batch, we had also designated CUSAA 126/2022 as one of the appeals which would be examined and pursuant to which learned counsels for respective sides had also addressed elaborate submissions on the said appeal. We thus, for the purposes of disposal of this batch, deem it appropriate to notice the facts as they obtain in the aforenoted two appeals. 3. The appellant in CUSAA 27/2022 had imported polyester knitted fabrics of different weights during the period November 2018 to April 2019. Those imports were affected on the basis of 27 Bills of Entry [BoE] which were submitted. The respondents appear to have disputed the 'declared value' of the imported goods on the basis of contemporaneous import data obtained from the National Import Database [NIDB]. It is the case of the appellant that since the clearance of the goods was being inordinately delayed, it was compelled to pay differential customs duty on the enhanced value as computed by the proper officer. It is further alleged that the appellant was compelled and coerced into voluntarily relinquishing its right to receive a speaking order as contemplated under Section 17 (5) of the Act. 4. Post t....
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.... 1. 9990292 dated 08.02.2019 Lot of Polyester Knitted Fabric. 2. 9990355 dated 08.02.2019 Lot of Polyester Knitted Fabric. 3. 9990356 dated 08.02.2019 Lot of Polyester Knitted Fabric. 4. 9990359 dated 08.02.2019 Lot of Polyester Knitted Fabric. 5. 9990360 dated 08.02.2019 Lot of Polyester Knitted Fabric. The containers are incurring detention and demurrage on daily basis. In this regard we would like to request you if your goodself is going to enhance the value of goods, we have no objection for that we are ready to pay custom duty on enhance value under protest. We request you to clear our consignments at the earliest to save us financial losses of detention and demurrage. Yours truly, For Manavi Exim Pvt Ltd Auth. Signatory xxxx xxxx xxxx Date: 15.02.2019 To, The Assistant Commissioner of Customs lCD Palwal, Village Janouli-Baghola, Haryana-121102. Subject: Customs Clearance of goods imported vide 2 Bill of Entry Dear Sir, We would like to inform you that we have filed the following bills of entry for c....
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....ike to inform you that we have filed the following bills of entry for customs clearance, but the same has not been yet assessed. S.# Bill of Entry No. & Date Item 1. 9990350 dated 08.02.2019 Lot of Polyester Knitted Fabric 2. 9990356 dated 08.02.2019 Lot of Polyester Knitted Fabric 3. 9990292 dated 08.02.2019 Lot of Polyester Knitted Fabric 4. 9990360 dated 08.02.2019 Lot of Polyester Knitted Fabric 5. 9990355 dated 08.02.2019 Lot of Polyester Knitted Fabric The containers are incurring detention and demurrage on daily basis. In this regard we would like to request you if your goodself is going to enhance the value of goods, we have no objection for that we are ready to pay custom duty on enhance value under protest. If the assessment of goods are going to take time then we request you to clear our goods provisionally we are ready to submit PD Bond and Bank Guarantee for 30% of the differential customs duty. We request you to clear our consignments at the earliest to save us financial losses of detention and demurrage. Yours truly, For Manavi Exim Pvt Ltd Auth. Signatory ....
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....th Section 14 of the Customs Act, 1962. We have also gone through and understood the details of contemporaneous imports of similar/identical goods and we accept that the value declared by us is significantly lower than the value at which identical/similar goods imported at or about the same time in comparable quantities in comparable commercial transactions were assessed at other ports of the country. We fully agree that the value of goods declared by us is liable to be rejected by Customs Authorities under the provisions of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962. Thereafter, the value of the goods imported by us under the said Bill of Entry is liable to be re-determined from the declared value US$ 1.03 per kg. to US$1.94 per kg. on the basis of data of contemporaneous import of similar/identical goods in terms of Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 and the duty payable is liable to be enhanced accordingly under Section 17 (5) of the Customs Act, 1962. Accordingly, a....
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...., that in these decisions, there is no issue of passing an order under Section 17 (5) of the Act, after passing of Bills of entry within fifteen days, hence these decisions are distinguishable and not applicable." 11. It was this decision which came to be subjected to challenge before the CESTAT. The CESTAT in CUSAA 27/2022 as well as CUSAA 126/2022 had taken an identical view. It has principally held that once the importer concedes to the reassessment undertaken by the proper officer in terms of Section 17 (4) and gives up its right to question the same, the authority would be justified in finalizing the assessment based on the opinion so formed and that it would not be open for the importer thereafter to resile from the concession so made. This becomes evident from a reading of paragraph 23 of the order impugned in CUSAA 27/2022 which is extracted hereinbelow: "23. In the present case, as noticed above, the proper officer doubted the truth or accuracy of the value declared by the importer for the reason that contemporaneous data had a significantly higher value. It was open to the importers to require the proper officer to intimate the grounds in writing for doubting ....
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....fficer to determine the value in the manner provided for in rules 4 to 9 of the Valuation Rules sequentially." 13. The CESTAT has essentially followed its decisions rendered in Advanced Scan Support and Vikas Spinners as would be evident from a reading of paragraphs 31 and 32 of the judgment impugned before us: "31. In this connection, it would be useful to refer to a decision of this Tribunal in Advanced Scan Support Technologies vs Commissioner of Customs, Jodhpur, wherein the Tribunal, after making reference to the decisions of the Tribunal in Vikas Spinners vs Commissioner of Customs, Lucknow and Guardian Plasticote Ltd. v. CC (Port), Kolkotta, held that as the Appellant therein had expressly given consent to the value proposed by the Revenue and stated that it did not want any show cause notice or personal hearing, it was not necessary for the Revenue to establish the valuation any further as the consented value became the declared transaction value requiring no further investigation or justification. Paragraph 5 of the decision is reproduced below: "5. We have considered the contentions of both sides. We find that whatever may be the reasons, the appellan....
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.... goods on the back of the Bill of Entry dated 7-5-1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5-1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally estopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images, (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly." 14. The CESTAT h....
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....ow cause notice to be issued to them or a personal hearing to be granted to them. The respondent is, therefore, not justified in asserting that the transaction value has been determined on the basis NIDB data. It was their acceptance of the value that formed the basis for determination of the value. The decisions relied upon by the respondent to support the contention sought to be raised are, therefore, of no benefit to them. 47. The general observations made the Commissioner (Appeals) in the impugned order that the value declared in the Bills of Entry were being enhanced uniformly by the Department for a considerable period of time was uncalled for. The Commissioner (Appeals) completely failed to advert to the crucial aspect that the importers had themselves accepted the enhanced value. The Commissioner (Appeals) in fact, proceeded to examine the matter as if the assessing officer had enhanced the declared value on the basis of other factors and not on the acceptance by the importers. This casual observation is not based on the factual position that emerges from the records of the case." 17. The appeals in the case of Manavi Exim, the appellant in CUSAA 126/2022, also ....
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....der 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." It is the correctness of the aforesaid view expressed by the CESTAT which is questioned before us in this batch of appeals. 18. On 02 August 2023, we had briefly taken note of the rival submissions in order to identify the principal questions which could be said to arise. That order is extracted hereinbelow: "1. This batch of appeals question the correctness of the view taken and expressed by the Customs Excise and Service Tax Appellate Tribunal [CESTAT] in the orders impugned and revolve upon the construction to be accorded to the concession which may be submitted by an importer as contemplated under Section 17 (5) of the Customs Act, 1962 [the Act]. 2. Section 17 of the Act reads as follows: - "17. Assessment of duty (1) An importer entering any imported goods under section 46, or an exporter enter....
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.... or otherwise harbors doubts with respect to the correctness of the declared transaction value and undertakes an exercise to reassess the duty leviable on such goods. 5. The scope of Section 17 (4) and the exercise which is liable to be undertaken by the proper officer must also be appreciated in the backdrop of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which reads as follows:- "RULE 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 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 tr....
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....ctional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on "certain reasons" raise doubts about the truth or accuracy of declared value. "Certain reasons" would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture or production, non-declaration of parameters such as brand and grade, etc. and fraudulent or manipulated documents. Grounds mentioned in (a) to (f) however are not exhaustive of "certain reasons" to raise doubt about the truth or accuracy of the declared value. Clause (ii) to Explanation states that the declared value shall be accepted where t....
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....easons in writing which have to be communicated when requested. 16.8. 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." 7. The instant batch of cases however pertain to eases where the importer had submitted its consent contemplated in terms of Section 17 (5). The Tribunal has taken the view that once the importer concedes to a re-assessment being undertaken by the Proper Officer in terms of sub-section (5), it loses the right to question the result of that assessment either by way of an appeal or to even question the quantification of additional duty that may be payable. 8. The appellants would contend that the concession which is spoken of in sub-section (5) essentially appears to stand restricted to a reassessment being undertaken by the proper officer and the formation of opinion contemplated under Section 17 (4) or Rule 12 not being questioned. However, that concession would not detract from the right of the importer to question the correctness of the assessment undertaken and which right otherwise stands protected under different provisio....
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....ods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made 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,....
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....ous additional components such as amounts paid or payable for costs and services, design work, royalties, license fees and others to be determined in the manner specified by statutory rules which may be made in that regard. The Second Proviso thereafter proceeds to identify some of the aspects which could be regulated by way of those rules. 21. Sections 15 and 16 of the Act deal with the date with reference to which the rate of duty and tariff evaluation of imported or exported goods is to be determined. Those provisions are extracted hereunder: "15. Date for determination of rate of duty and tariff valuation of imported goods.- (1) [The rate of duty [* * *] and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force,- (a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under Section 68, on the date on which [a bill of entry for home consumption in respect of such goods is presented under that section]; (c) in the case of any ot....
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....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 where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be. (6) [* * *] Explanation.-For the removal of doubts, it is hereby declared that in cases where an importer has entered any imported goods under Section 46 or an exporter has entered any export goods under Section 50 before the date on which the Finance Bill, 2011 receives the assent of the President, such imported goods or export goods shall continue to be governed by the provisions of Section 17 as it stood immediately before the date on which such assent is received.]" 23. By virtu....
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.... be; (b) in the case of warehoused goods, the proper officer may, where the duty [finally assessed or re-assessed, as the case may be] is in the excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty. [(3) The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order [or re-assessment order] under sub-section (2), at the rate fixed by the Central Government under Section [28-AA] from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. (4) Subject to sub-section (5), if any refundable amount referred to in clause (a) of sub-section (2) is not refunded under that sub-section within three months from the date of assessment of duty finally [or-re-assessment of duty, as the case may be], there shall be paid an interest on such unrefunded amount at such rate fixed by the Central Government under Section 27-A till the date of refund of such amount. (5) The amount of duty refundable under sub-section (2) and the interest ....
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.... Customs Act, 1962..." 25. The procedure for the determination and identification of an appropriate method of valuation is regulated by Rule 3 and which reads thus: "3. Determination of the method of valuation.- (1) Subject to Rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of Rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted: Provided that- (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) the sale or price is not subject to some 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 provi....
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.... Where no sale referred to in clause (b) of sub-rule (1), is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments, whether such adjustment leads to an increase or decrease in the value. (2) Where the costs and charges referred to in sub-rule (2) of Rule 10 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods. 5. Transaction value of similar goods.- (1) Subject to the provisions of Rule 3, the value of imp....
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....herwise to the provisions of sub-rule (1), be based on the unit price at which the imported goods or identical or similar imported goods are sold in India, at the earliest date after importation but before the expiry of ninety days after such importation. (3)(a) If neither the imported goods nor identical nor similar imported goods are sold in India in the condition as imported, then, the value shall be based on the unit price at which the imported goods, after further processing, are sold in the greatest aggregate quantity to persons who are not related to the seller in India. (b) In such determination, due allowance shall be made for the value added by processing and the deductions provided for in items (i) to (iii) of sub-rule (1). 8. Computed value.- Subject to the provisions of Rule 3, the value of imported goods shall be based on a computed value, which shall consist of the sum of:- (a) the cost or value of materials and fabrication or other processing employed in producing the imported goods; (b) an amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the go....
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....s shall be construed as restricting or calling into question the right of the proper officer of customs to satisfy himself as to the truth or accuracy of any statement, information, document or declaration presented for valuation purposes. (3) The provisions of the Customs Act, 1962 (52 of 1962) relating to confiscation, penalty and prosecution shall apply to cases where wrong declaration, information, statement or documents are furnished under these rules." 30. The power of the proper officer to reject 'declared value' and the circumstances in which that power may be wielded is then elaborately spelt out in Rule 12. The said provision is extracted hereinbelow: "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 that the tra....
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....e to be laid down by the Supreme Court in Century Metal Recycling and the enunciation of the legal position which appears therein. Mr. Gulati submitted that the facts as brought on our record in CUSAA 126/2022 would establish beyond a measure of doubt that the importer was compelled and constrained to submit concessions before the proper officer in order to expedite clearance of the imported goods and to avoid spiralling costs of warehousing and demurrage. 32. Mr. Gulati submitted that the appellant, Manavi Exim had ultimately, and left with no option, stated that it would be ready and willing to accept the enhanced value suggested by the proper officer and pay additional customs duty on the basis thereof in order to seek expedited clearance of goods. Those communications, according to Mr. Gulati, evidence the importer having chosen to proceed along those lines solely in light of the burgeoning detention and demurrage charges which it was facing as a consequence of the consignment having been illegally detained. Notwithstanding the above, Mr. Gulati submitted that Manavi Exim had throughout maintained the position that it had paid the customs duty under protest. According to lea....
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....ct on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs to be followed by the assessing officer. This principle of arriving at transaction value to be the assessable value applies. This is also the effect of Rule 3 (1) and Rule 4 (1) of the Customs Valuation Rules, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4 (2). As per that provision, the transaction value mentioned in the bills of entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it is incumbent upon the assessing officer to give reasons as to why the transaction value declared in the bills of entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which assessing officer arrives at his own assessable va....
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....ubt about the truth or accuracy of the declared value. Clause (ii) to Explanation states that the declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after enquiry in consultation with the importers. Clause (i) to the Explanation states that Rule 12 does not provide a method of determination of value but provides the procedure or mechanism in cases where declared value can be rejected when there is a reasonable doubt that the declared transaction value does not represent the actual transaction value. In such cases the transaction value is to be sequentially determined in accordance with Rules 4 to 9 of the 2007 Rules. 16. The requirements of Rule 12, therefore, can be summarised as under: 16.1. The proper officer should have reasonable doubt as to the transactional value on account of truth or accuracy of the value declared in relation to the imported goods. 16.2. Proper officer must ask the importer of such goods further information which may include documents or evidence. 16.3. On receiving such information or in the absence of response from the importer, the proper officer h....
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.... expression "reason to believe" which would have required the proper officer to refer to facts and figures to show existence of positive belief on the undervaluation or lower declaration of the transaction value. The expression "reason to doubt" as a sequitur would require a different threshold and examination. It cannot be equated with the requirements of positive reasons to believe, for the word "doubt" refers to uncertainty and irresolution reflecting suspicion and apprehension. However, this doubt must be reasonable i.e. have a degree of objectivity and basis/foundation for the suspicion must be based on "certain reasons". 19. The expression "proof beyond reasonable doubt" in criminal law requires the prosecution to establish guilt and secure conviction of the accused by proving the charge "beyond reasonable doubt". In Ramakant Rai v. Madan Rai [Ramakant Rai v. Madan Rai, (2003) 12 SCC 395 : 2004 SCC (Cri) Supp 445] referring to the expression "reasonable doubt" in criminal law it was held as under : (SCC p. 405, para 24) "24. Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than the....
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.... also drew our attention to the following observations rendered by the Supreme Court in Century Metal Recycling: "24. We would ex facie for the reasons recorded below reject the contention of the respondents predicated on the letter of the appellants dated 6-3-2017 that the appellants did not seek provisional assessment of the bill of entry and had accepted and paid duty on the valuation done by the Customs Authorities. This letter exposits the predicament faced by the appellants as it states that the appellants were in urgent requirement and wanted clearance of the goods. Pertinently, the appellants had earlier written several letters, including communications dated 22-12-2016 and 4-3-2017 requesting for clearance of the imported consignment of aluminium scrap on the declared transaction value pointing out therein that on account of delay in the clearance of the imported consignments, the appellants and its sister concern had been compelled to pay excess duty of over Rs 25 crores from August 2013 onwards. It is unfortunate and has to be accepted that the respondent authorities had compelled and forced the appellant to furnish the letter dated 6-3-2017 thereby waiving of i....
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....partment was ultra vires Section 18(1)(b) of the Customs Act." 41. Mr. Gulati then invited our attention to the decision rendered by a Division Bench of this Court in Commr. of Customs vs. CISCO Systems India (P) Ltd. 2023 SCC OnLine Del 509. CISCO Systems was principally concerned with the reckoning of the period of limitation for the purposes of refund. It was in that context also called upon to examine the correctness of the contention of the Revenue that since the assessee had initially paid the enhanced value as determined without protest, its claim for refund would be barred by virtue of Section 27 of the Act. Rejecting that contention, the Division Bench in CISCO Systems had held: "19. In the aforesaid context, the only issue to be addressed is whether filing of an appeal against the Order-in-Original dated 25/26.08.2004 while at the same time paying the duty on the enhanced value, would amount to paying the same under protest. 20. The respondent claims that it was obvious that the additional duty was paid under protest as the respondent had appealed the Order-in-Original dated 25/26.08.2004 enhancing the declared value of the goods resulting in the incr....
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....in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay the duty without protest even when he contests the levy of duty, its rate, classification or any other aspect. If one reads the second proviso to subsection (1) of Section 118 along with the definition of "relevant date", there is no room for any apprehension of the kind expressed by the learned Counsel." (emphasis supplied) 23. In view of the authoritative decision of the Supreme Court in Mafatlal Industries Ltd. v. Union of India (supra), the question whether payment of duty while appealing its imposition, is required to be construed as payment under protest, is no longer res integra. Although the said decision was rendered in the context of Section 11B of the Central Excise Act, 1944, the second proviso to Section 11B of the Central Excise Act, 1944 is pari materia to second proviso of Section 27(1) of the Customs Act. 24. We concur with the decision of the learned Tribunal that the duty paid by the respondent on the enhanced value of the goods is required to be accepted as duty paid under protest." 42. A l....
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.... "4. (2)(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) 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) below." 9. 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 excep....
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....he value is required to be determined under Rule 8 "using reasonable means consistent with the principles and general provisions of these Rules and sub-section (1) of Section 14 of the Customs Act, 1962 and on the basis of data available in India". If the phrase "the transaction value" used in Rule 4 were not limited to the particular transaction then the other rules which refer to other transactions and data would become redundant. 14. It is only when the transaction value under Rule 4 is rejected, that 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. 15. 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....
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....nts are uniformly available to all and based on logical commercial bases, they cannot be denied under Section 14. It appears from the judgment that a distinction was drawn between a discounted price special to a particular customer and discounts available to all customers. 21. As already noted, all these cases dealt with imports made prior to the coming into force of the Rules in 1988. Now the "special considerations" are detailed statutorily in Rule 4 (2). 22. In the case before us, it is not alleged that the appellant has mis-declared the price actually paid. Nor was there a misdescription of the goods imported as was the case in Padia Sales Corpn. [1993 Supp (4) SCC 57] 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 ....
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....ned Commissioner (Appeals) upheld the impugned reassessment. The Commissioner (Appeals) has observed in the impugned orders that the Appellant had given their written acceptance of the enhanced value and thereby has forgone his right to speaking order under Section 17 (5) of the Customs Act. We noticed that in view of such admission, no speaking order was issued as per requirements for Section 17 (5) of the Customs Act, 1962. 9. Section 14 of the Customs Act, 1962 read with Customs Valuation Rules makes it abundantly clear that transaction value in the ordinary course of commerce is to be taken as the assessable value. The Customs Valuation Rules outlines the step-by-step methodology to be adopted for re-determination of the assessable value in certain cases. The primary requirement for re-determination of the value is that the transaction value should be rejected for cogent reasons prescribed in the Customs Valuation Rules. If the transaction value is rejected, then the Customs Valuation Rules prescribes the sis for arriving at the assessable value. 10. Perusal of the records of the case indicates that the only reason cited for re-assessment of value is that the ....
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..... The contention of respondent is that to avoid demurrage charges, the respondent accepted the enhanced value and thereafter filed appeal. 3. Respondent relied upon the decision in the case of Laxmi Colour Lab v. Collector of Customs reported in 1992 62 E.L.T. 613 (Tribunal). 4. We find that in this case, value of the goods was enhanced by the Customs Authorities and goods were assessed at the enhanced value. Thereafter respondent filed appeal and the same was allowed. The only contention of Revenue is that value of goods was enhanced which was accepted by the respondent. We find that in the Tribunal's case Laxmi Colour Lab (supra) after relied upon the decision of the Hon'ble Supreme Court in the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India reported in 1983 13 E.L.T. 1566 (S.C.), held as under:- "There is no estoppel in law against a party in taxation matter. If a party, in order to clear the goods for customs, has given the classification in accordance with the wishes of the authorities or even under some misapprehension, and if the law allows it a right to ask for refund on proper appraisement and which is actually a....
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.... also stand disposed of accordingly." 47. A similar view was expressed by the Principal Bench of the CESTAT in ACC (Import), TKD vs. AAA Impex 2019 SCC OnLine CESTAT 2523. This emerges from the following paragraphs of that decision: "12. Perusal of the records of the case indicates that the only reason cited reason for re-assessment of value is that the respondent has accepted the enhanced value. No doubt acceptance of the enhanced value in writing waives the requirement of the issue of speaking order under Section 17 (5) ibid. However, the requirement of Section 14 and the Customs Valuation Rules need to be satisfied for enhancement of value. Nothing is forthcoming in the record of the case from which the basis for such re-assessment can be made out. 13. Revenue has vehemently argued that the Customs Authorities were justified in enhancement of value since the importer had accepted such enhancement. They have also relied upon the recent decision in which the Tribunal has taken the view that admitted facts need not be proved. In the case of Sodagar Network (supra), the Tribunal upheld the enhancement of value. The importer had specifically admitted the basis fo....
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....es are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared. The expression "reason to doubt" cannot be equated with the requirements of positive reasons to believe, for the word 'doubt' refers to un-certainty and irresolution reflecting suspicion and apprehension. However, this doubt must be reasonable i.e. have a degree of objectivity and basis/foundation for the suspicion must be based on 'certain reasons'. 12. The expression 'reasonable doubt' has been explained by Hon'ble Supreme Court in In Ramakant Rai v. Mad an Rai, (2003) 12 SCC 395 as under: "24. Doubts would be called reasonable if they are free from a zest for abstract speculation. Law cannot afford any favourite other than the truth. To constitute reasonable doubt, it must be free from an over emotional response. Doubts must be actual and substantial doubts as to the guilt of the accused persons arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an imaginary, trivial or a merely possible doubt; but a fair doubt based upon reason....
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....y procedure nor has produced the cogent evidence while confirming the allegations of under valuation and while confirming the differential duty. 21. It appears that the sole ground for the confirmation is the admission of the authorized representative of the appellant in his statement dated 20.01.2017. The said statement is perused vide which the said authorized representative has accepted the reassessed value and offered to pay differential duty along with the applicable fine and penalty. He also opted for not being served with any show cause notice or the opportunity of personal hearing with the request to dispose of the case at the earliest. However, we perused that the statement of said authorized representative was recorded a date prior also i.e. on 19.01.2017, wherein he had mentioned that the appellant's firm is engaged in the business of import of sanitary goods including the impugned goods, in bulk. The appellant provided the purchase order only when personally visited to China after due negotiations and the impugned goods are imported on piece basis. He also stated that assessment was done per piece based, hence, the weight found in excess than the declared w....
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.... lot of Polyester Knitted Fabrics. The revenue had sought to revise the assessable value by rejecting the declared assessable value. It is noticed that identical issue has been decided by Tribunal in the case of Sedna Impex India P. Ltd. -2023 (3) TMI 1080 (CESTAT-Ahmd), wherein Tribunal has observed as follows: "4.3 The dispute in the present case is regarding the valuation of the goods imported by the Appellants. The Assessing Authority re-assessed the imported goods at values higher than what was declared by the Appellants in the Bills of Entry. The revenue enhanced value as per NIDB data. We observed that the transaction value declared by the importer should form the basis of assessment unless the same is rejected, for the reasons set out in Rules of the Customs Valuation Rules. Section 14 of the Customs Act, 1962 read with Customs Valuation Rules makes it abundantly clear that transaction value in the ordinary course of commerce is to be taken as the assessable value. The Customs Valuation Rules outlines the step-by-step methodology to be adopted for re-determination of the assessable value in certain cases. The primary requirement for re-determination of the value is....
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....such evidence produced by the Revenue except reference to the NIDB data. In view of the discussions above, we hold that in the present case, the enhancement of value on the basis of NIDB data cannot be accepted." 50. The view taken by the CESTAT in the judgments impugned before us in this set of appeals, however, principally proceeds on the basis of its decisions in Advanced Scan Support and Vikas Spinners. In Advanced Scan Support, the CESTAT had taken note of the contention of the importer that there was no misdeclaration and that the entire case as set up by the customs authorities was based on material with which the importer had never been confronted with. While dealing with the aforesaid challenge, the CESTAT in Advanced Scan Support had held: "5. We have considered the contentions of both sides. We find that whatever may be the reasons, the appellant expressly gave its consent to the value proposed by the Revenue and expressly stated that it did not want any show-cause notice or personal hearing. Even the duty was paid without protest. By consenting to enhancement of value and thereby voluntarily foregoing the need for a show-cause notice, the appellant made it unneces....
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....he goods accordingly of Rs. 4,22,008 on May 19, 1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally estopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the apex court in Sounds N. Images (2000) 117 ELT 538 (SC), is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their representative/special attorney and paid the duty thereon accordingly." (emphasis added) Similarly, in the case of Guardian Plasticote Ltd. v. Commissioner of Customs (2008) 223 ELT 605 (Trib.-Kol), has held as un....
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....f the principles of natural justice and for that reason also they cannot be sustained." 51. Since the CESTAT in Advanced Scan Support has essentially followed the reasoning on which Vikas Spinners was based, this would constitute an appropriate juncture to examine that decision in some detail. It becomes pertinent to note that the importer in Vikas Spinners had, apart from questioning the valuation of the goods, also assailed the confiscation action and the imposition of penalties. Insofar as the issues pertaining to confiscation are concerned, the same came to be answered on facts against the importer. Proceeding then to the question of valuation of goods, the CESTAT in Vikas Spinners significantly found that the loading in the value as declared by the importer was undertaken in consultation and with due notice to that entity. It further found on facts that the Special Attorney of the importer had signed a document accepting the loaded value of the goods on the BoE itself. It was in the aforesaid backdrop that the CESTAT had observed as follows: "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....
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....aration of nature of goods and import of the same without specific licence." 52. Vikas Spinners was thus a case where the BoE as submitted by the importer had itself acknowledged the loading suggested by the customs authorities over and above the value of the importer goods as declared. It was this BoE which ultimately came to be accepted and formed the primary basis of the import itself. This becomes apparent from the CESTAT having categorically found that "There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods." It is thus evident that Vikas Spinners essentially proceeded and revolved upon its own special facts and in any case was one which was concerned with an actual assessment made in the course of examination of the self-assessed declarations made. The aforesaid decision thereafter appears to have been followed in Advanced Scan Support based on a perceived understanding of its implication and de hors what was found on the facts ....
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.... that such scrap is disposed of by concerned manufacturers to traders and that they have to necessarily buy such scrap only from the traders at the prevalent market rate. This assertion has not been disproved or proved incorrect by Customs. 6.4) Department has also not backed up their allegations that the manner of purchase of the impugned goods from the traders and not from manufacturers, is not as per practice normally followed in the course of international trade in the said item. This being the case, we are of the opinion that Department cannot reject the invoices issued by traders the declared import values only for the reason that the accompanying invoices have not been issued by the manufacturers themselves. In any case, in our view, it is not as if the manufacturers concerned have set out or conduct their activities with the sole intention of manufacturing such "shredded scrap". Obviously the impugned goods are but shreds and turnings which have emerge during the manufacture of goods by the concerned manufacturers. There can be no dispute that these metal shreds and turnings would not be in very huge quantities vis-'-vis the actual goods manufactured. It also a....
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.... Revenue has not advance any such evidences to support their case, inasmuch as, no evidence of rejection of transaction value stands produced by the authority, we find no reason to interfere with the impugned order of Commissioner (Appeals). Mere reference to Commissioner Mumbai guidelines to enhance the value of ball bearings, without first assessing the quality of the goods is not justified. It stands accepted that the ball bearings were mix and not of uniform sizes. As such, Revenue's appeal has no merits". 6.8) In the case of Topsia Estates Pvt. Ltd. v. CC (Import-Seaport) Chennai as reported at [2015 (330) E.L.T 799 (Tri.-Chennai)], the Tribunal held as under: "7. After hearing both sides and on perusal of the records, we find from the adjudication order that the adjudicating authority observed that the unit price declared appears to be very low compared to the contemporaneous import value available in NIDB data. The appellant imported PU Coated Fabrics of various thickness and different qualities from China. It is seen from the Table as reproduced in the adjudication order that the declared unit price varies from 0.90 MT to 1.60 MT and the value was enha....
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....orted items has to be invariably arrived at applying Section 14 read with Customs Valuation Rules, 2007. 7. We also note that the reliance placed by the appellant on the decision of the Tribunal in the case of Topsia Estates Pvt. Ltd. v. CC, Chennai, 2015 (330) ELT 799 (Tribunal-Chennai) is appropriate to the facts of the present case. The observation of the Tribunal is as below:- "We find that in the present case, the adjudicating authority enhanced the value as the declared value appears to be very low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on the basis of NIDB data. It is noticed that the value of impugned goods varies widely on the basis of quality, size, quantity, etc., and it is contended by the appellant before the lower appellate authority that the declared value of the same goods were accepted by the 6 Customs Appeals Nos. 50503 50504/2017 and 50519-50520/2017 Department at Kolkata Port. We also find force in the submission of the learned Advocate that in this particular situation, Rule 9 of the Valuation Rules would not be in....
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....nt and consent of any sort cannot condone deviation from the law. 4.9 This issue was also decided by a principal bench of this Tribunal at Delhi in the case of Ankit Electronics wherein the following order was passed: Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. We propose to dispose of the stay petition as also appeal by a common order as a short issue is involved. 2. As per facts on record, the respondents filed thirteen Bills of Entry on various dates for the clearance of Ferrite magnet & Ferrite magnet rings declaring the value based upon the invoices raised by the supplier. The assessing authority did not agree with the declared value and enhanced the same. The Bill of Entry was accordingly assessed. 3. The said assessment was challenged by the respondents before Commissioner (Appeals), who observed that inasmuch as the assessing authority has not passed a speaking order giving reasons for rejection of the declared price, he set aside the assessment order and directed the assessing authority to pass speaking order within a period of 15 days. 4. Being aggrieved with the said o....
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....ed Services P. Ltd. clearly held that DGOV circular cannot override the provisions of Valuation Rules. Invoice price is not sacrosanct but before rejecting the invoice price the department has to give cogent reasons for such rejection. Assessing Authority has to examine each and every case on merit for deciding its validity. He could not form the view to reject all transaction only on the basis of same general criteria based on DGOV circular. It was, however, held that if contemporaneous import were not noticed, Rules 5 and 6 of Customs Valuation Rules, 1988 could not be applied, the question of rejecting the transaction valued under the Rule 10(A) does not arise at all. 4.11 In the case of Modern Manufacturers (supra) this Tribunal dealing with identical issue held that enhancement of value of imported goods based on NIDB data and circular issued by DGOV without rejecting declared value under Rule 12 of Customs Valuation Rules, 2007. Redetermination of value based on NIDB data and DGOV circular is not sustainable. In the present case, no exercise of rejecting the declared value under Rule 12 and process of applying valuation rules sequentially were followed. Therefore, th....
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....ld be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/ Special Attorney and paid the duty thereon according." * Reliance was also placed on the decision of Tribunal in the case of M/s. Gandian Plasticote Ltd.- 2008 (223) ELT 605 (tri.-Kol.) wherein following has been observed: "The learned Advocate also cited the decision of the Tribunal in the case of M/s Vikas Spinners V. CC., Lucknow 2001 (128) ELT. 143 (Tri-Del) in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is stopped from challenging the same subsequently. It also hold that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden the department to establish declared value to be incorrect. In view of the fact that the Appellants in this case have not established that they had loaded any protest and as per systems report clearly points to acceptance of ....
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.... be leviable. This obliges the importer to comply with the prescriptions set out in Section 46 of the Act. As that provision stands in its present avatar, the importer of any goods is required to electronically present on the customs automated system, the BoE for the consideration of the proper officer. The BoE is to include all particulars required in terms of the provisions made in the Act and corresponding rules. In addition to the presentation of a BoE, the importer is also statutorily obliged to submit a declaration as to the truthfulness of the contents of such BoE and in support thereof produce before the proper officer the invoice and other documents relating to the imported goods as may be prescribed. In terms of sub-section (4A) of Section 46, the importer who presents a BoE is to ensure that the said document is accurate and complete in respect of the information disclosed therein, the authenticity and validity of documents filed in support thereof and the import itself being compliant with any restriction or prohibition imposed in relation to those goods by law. 59. Upon the proper officer being satisfied that the goods entered for home consumption are not prohibited....
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....information furnished under sub-section (3); but if it was found subsequently on examination or testing of the goods or otherwise that any statement in such bill of entry or document or any information so furnished was not true, he could have proceeded to reassess the duty. Where the assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of the goods, classification, exemption or concession, speaking order shall be passed within 15 days from the date of assessment of the bill of entry or the shipping bill as the case may be as provided in Section 17 (5). 33. Under the provisions of Section 17 as amended by the Finance Act of 2011, Section 17 (1) has provided to self-assess the duty, if any, leviable on such goods by importer or exporter, as the case may be. Self-assessment is an assessment as per the amended definition of Section 2 (2). It is further provided that proper officer may verify the self-assessment of such goods, and for this purpose, examine or test any imported goods or exported goods or such part thereof as may be necessary. The power to verify self-assessment lies with the proper officer and for that pu....
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....nce of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, reassessment is not permitted nor conditions of exemption can be adjudicated. Reassessment is permitted only under Sections 17 (3), (4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or reassessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provi....
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....itical significance are sub-sections (4) and (5) of Section 17 and which we propose to notice hereinafter. 63. As we read sub-section (4), it is manifest that before the proper officer commences the process of reassessment, it must come to form an opinion that basis the verification, examination or testing of goods mentioned in the self-assessed declarations as submitted by the importer, are incorrect. It is only on the formation of that opinion that it proceeds to reassess the duty leviable on the imported goods. It is thus evident that before the procedure as contemplated under sub-section (5) is undergone, the proper officer would have come to form a prima facie opinion that the self-assessed declaration is incorrect. It is this preliminary formation of opinion that forms the basis for the process of reassessment being commenced. The reasons for reassessment as well as the opinion formed under sub-section (4) thus constitutes the foundation for further action that may be taken by the proper officer under sub-section (5). The formation of opinion contemplated under Section 17 (4), however, is neither unguided nor left totally unregulated. 64. That formation of opinion is gu....
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....oper officer having reasonable doubt as to the truthfulness or accuracy of the value as declared in relation to the imported goods. The sine qua non for commencement of reassessment, therefore, is the existence of reasonable doubt as to the declaration as made by the importer. What we seek to emphasise is that it is the formation of this opinion that forms the bedrock for the proper officer treading down the path constructed by Section 17 (4) of the Act. 67. In terms of Rule 12, upon the proper officer having formed a reasonable doubt with respect to the truthfulness and accuracy of the declarations made, it would call upon the importer to furnish such further information, documentation and evidence in support of the declaration as made. It is only if, after receipt of such information, the proper officer still harbours a reasonable doubt about the truthfulness or accuracy of the value declarations made that it would come to hold that the transaction value cannot be determined in terms envisaged by Rule 3. The doubt which lingers and clouds the declaration made by the importer even after the submission of further documentation and evidence and consideration thereof triggers a de....
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....e shall be accepted and a final decision in respect of assessment taken only after the completion of an inquiry undertaken by the proper officer in consultation with the importer. Clause (iii) thereafter spells out the factors which would be pertinent and germane for the customs authority raising a doubt with respect to the truthfulness and accuracy of the declarations made. Those factors are the following: "(a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves 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." 71. On an overall consideration of the statutory scheme governing the valuation of i....
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....on to supply the reasons and to provide a reasonable opportunity of representation to the importer is clearly mandatory in light of the language employed by Rule 12 (2) and which uses the phrase "...before taking a final decision under sub-rule (1)". If the doubt persists even after consideration of the response as submitted by the importer or where it fails to respond to the notice issued, the proper officer would proceed to record its decision that the value of the goods cannot be determined in accordance with Rule 3 (1). This constitutes the second tier of the adjudicatory process. Thus, it is evident that it is only after the response of the importer has been considered and the proper officer finds no justification to deviate from the initial opinion which was formed that the process of determination of the true transactional value would commence. This is in light of Rule 12(1) providing that if the proper officer "still has reasonable doubt about the truth or accuracy of the value so declared" and the deeming fiction of valuation under Rule 3 (1) coming into play. 74. Both Section 17 as well as Rule 12, in our considered opinion, are liable to be interpreted as mandatorily ....
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.... with a somewhat similar situation of an appellant who alleged that they had been coerced and intimidated into submitting a letter of consent conceding to the assessment and valuation exercise undertaken by the customs authorities compelled by the delay being caused in the clearance of imported articles and the continued levy of demurrage, warehousing charges and other liabilities. After noticing the language in which Rule 12 stood couched, the Supreme Court in Century Metal Recycling observed that while the expression "reason to doubt" may not be akin to a "reason to believe" or a subjective satisfaction being arrived at, it would clearly have to be reasonable and thus the doubt formed would have to be informed by a degree of objectivity. 76. The Supreme Court held that reasonable doubt on the basis of the factors enumerated in the Explanation to Rule 12 (2) and sub-clauses (a) to (f) thereof, though not exhaustive, would shed light on the factors which the statute considers to be pertinent for the formation of a doubt with respect to the declared value. It then proceeded to observe that in terms of Rule 12 (2), it would be incumbent upon the proper officer to intimate the impo....
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....reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on "certain reasons" raise doubts about the truth or accuracy of declared value. "Certain reasons" would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture or production, non-declaration of parameters such as brand and grade, etc. and fraudulent or manipulated documents. Grounds mentioned in (a) to (f) however are not exhaustive of "certain reasons" to raise doubt about the truth or accuracy of the declared value. Clause (ii) to Explanation states that the declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value afte....
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....orter 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. 17. 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 the Explanation appended to Rule 12 which sets out some of the conditions when the "reason to doubt" exists. The instances mentioned in sub-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 the value declared. 18. The choice of words deployed in Rule 12 of the 2007 Rules are significant and of much consequence. The legislature, we must agree, has not used the expression "reason to believe" or "satisfaction" or such other positive terms as a precondition on the part of the proper officer. The expressi....
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.... possesses even after the importer has been asked to furnish further information including documents and evidence during the preliminary enquiry to clear his doubt about the truth and accuracy of the value declared. Therefore, there has to be a preliminary enquiry by the proper officer in which the importer must be given an opportunity for clarification of the doubts of the officer by furnishing of documents and evidence as to the accuracy or truth of the value declared. It is only in case where the doubt of the proper officer persists after conducting examination of information including documents or on account of non-furnishing of information that the procedure for further investigation and determination of value in terms of Rules 4 to 9 would come into operation and would be applicable. Reasonable doubt will exist if the doubt is reasonable and for "certain reasons" and not fanciful and absurd. A doubt to justify detailed enquiry under the proviso to Section 14 read with Rule 12 should not be based on initial apprehension, be imaginary or a mere perception not founded on reasonable and "certain" material. It should be based and predicated on grounds and material in the form of "....
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....ng 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 Sanjivani Non-Ferrous Trading (P) Ltd. [CCE v. Sanjivani Non-Ferrous Trading (P) Ltd., (2019) 2 SCC 378] 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 which would justify rejection of the declared value and enhancement of the price declared in the bill of entry. We have also elaborated and explained the legal position with reference to Rule 12 of ....
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..... Although the procedure for verification and ascertainment of the correctness of the declared value has been lucidly explained by the Supreme Court in Century Metal Recycling, we would for purposes of clarity break down that process in order to highlight the sequential steps which are contemplated thereunder. Undisputedly, Section 17 (2) empowers the proper officer to verify the entries made in the self-assessed declarations. For the purposes of undertaking that verification exercise, the proper officer by virtue of sub-section (3) of Section 17 stands statutorily enabled to require the importer or any other person to produce documents and information so as to ascertain the correctness of the declarations made. It is only after the completion of that verification process and when the proper officer comes to conclude that the self-assessment has not been done correctly that it would proceed to reassess the duty leviable on the imported goods. This clearly flows from a perusal of Section 17 (4) of the Act. 80. The provisions contained in Rule 12(1) are in essence an amalgam of the procedure prescribed and stipulated in sub-sections (3) and (4) of Section 17. Rule 12(1) amplifies ....
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....e. When we examine this aspect on the anvil of Section 17 (5), it becomes apparent that the statute speaks of the concession being with reference to the reassessment made under Section 17 (4). It thus proceeds to provide that in a case where the importer confirms his acceptance of the reassessment in writing, the proper officer would stand relieved of the obligation of passing a speaking order in respect of such reassessment. In all other cases and where the reassessment is not acceded to, the proper officer is obliged to pass a speaking order. Thus, the waiver or concession is at best confined to the speaking order which the proper officer is obliged to frame in affirmation of the provisional opinion that it may have formed under Section 17 (4). 84. We find ourselves unable to construe Rule 12 (2) as contemplating any concession or waiver at least in explicit terms. All that Rule 12 (2) stipulates is that the proper officer would intimate to the importer the grounds for doubting the declared value at its request. It is in the aforesaid context that we would thus have to adjudge whether the CESTAT was correct in holding that the exchange of communications amounted to a waiver or....
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....Jones v. North Vancouver Land & Improvement Co. [Jones v. North Vancouver Land & Improvement Co., 1910 AC 317 (PC)] A perusal of the relevant facts set out in the several reports and the respective judgments in the above cases will clearly indicate that apart from the fact that some of them related to collieries which were treated on a special footing, those cases were really cases relating to waiver or acquiescence or estoppel. Indeed in Clarke case [Clarke & Chapman v. Hart, (1858) 6 HL Cas 633 : 10 ER 1443] while Lord Chelmsford referred to the decision in Prendergast case [Prendergast v. Turton, (1841) 1 Y & C Ch Cas 98 : 62 ER 807] as a case of abandonment of right, Lord Wensleydale read it as an instance of acquiescence and estoppel. Unilateral act or conduct of a person, that is to say act or conduct of one person which is not relied upon by another person to his detriment, is nothing more than mere waiver, acquiescence or laches, while act or conduct of a person amounting to an abandonment of his right and inducing another person to change his position to his detriment certainly raises the bar of estoppel. Therefore, it is not intelligible how, having held that no plea of w....
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....of mere laches, that Prendergast v. Turton [Prendergast v. Turton, (1841) 1 Y & C Ch Cas 98 : 62 ER 807] was decided." 13. Two things are thus clear, namely, (1) that abandonment of right is much more than mere waiver, acquiescence or laches and is something akin to estoppel if not estoppel itself; and (2) that mere waiver, acquiescence or laches which is short of abandonment of right or estoppel does not disentitle the holder of shares who has a vested interest in the shares from challenging the validity of the purported forfeiture of those shares. In view of the decision of the courts below that no case of waiver, acquiescence, laches or estoppel has been established in this case it is impossible to hold that the principles deducible from the judicial decisions relied upon by the appeal court have disentitled the Company to relief in this case. The matter does not rest even here. Assuming, but not conceding, that the principle of piercing the veil of corporate personality referred to in Smith, Stone & Knight Ltd. v. Birmingham Corpn. [Smith, Stone & Knight Ltd. v. Birmingham Corpn., (1939) 4 All ER 116 (KB)] can at all be applied to the facts of the present case so as to....
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.... falls clearly within the decision in Clarke case [Clarke & Chapman v. Hart, (1858) 6 HL Cas 633 : 10 ER 1443] relied upon by the appeal court. The only other conduct of Sundara Ayyar relied on by the learned advocate for the Mills in support of the appeal court's decision on this point is that Sundara Ayyar proceeded with his suit against Palaniappa Chettiar even after his suit as well as his appeal had been dismissed as against the Mills. In that suit Sundara Ayyar sued the Mills as well as Govindaraju Chettiar and the Official Receiver of Salem representing the latter's estate and Palaniappa Chettiar. In the plaint itself the validity of the forfeiture was challenged. The claim against Palaniappa Chettiar was in the alternative and it was founded on the agreement of 30-6-1939. The suit was dismissed as against the Mills only on the technical ground that Sundara Ayyar had no locus standi to maintain the suit. The contention of the Company that the forfeiture was invalid and the claim for rectification of the share register of the Mills by restoring the name of the Company cannot possibly have been affected by this decision. Sundara Ayyar's claim against Palaniappa Che....
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....le in a case of tenancy, be to the landlord's interest to keep the tenancy alive; and so also in the case of shares of a company. It may be to the interests of the company and the general body of shareholders to refrain from forfeiture if, for example, the value of unpaid calls exceeds the market value of the shares. Such a position was envisaged in Garden Gully United Quartz Mining Co. v. McLister [Garden Gully United Quartz Mining Co. v. McLister, (1875) 1 AC 39 at p. 57 (PC)]. So also with waiver. A long catena of illustrative cases will be found collected in B.B. Mitra's Indian Limitation Act, 13th Edn., pp. 447 and 448." 89. The question of abandonment arose for consideration again before a Constitution Bench of the Supreme Court in Bhau Ram vs. Baij Nath Singh 1961 SCC OnLine SC 292. The issue itself arose in light of the stand of the respondents that the appellants upon withdrawing the pre-emption price would be deemed to have accepted the decree and thus being deprived of the right to assail or question the same. While answering that question, the Supreme Court pertinently observed as follows: "4. The view taken in the other cases proceeds on similar rea....
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.... presumed to have come to an end because the appellant has in the meantime abided by or taken advantage of something done by the opponent under the decree and there is no justification for extending the rule in Tinkler case [154 English Reports, 1176 : 4 Exch 187] to cases like the present. In our judgment it must be limited only to those cases where a person has elected to take a benefit otherwise than on the merits of the claim in the lis under an order to which benefit he could not have been entitled except for the order. Here the appellant, by withdrawing the pre-emption price has not taken a benefit de hors the merits. Besides, this is not a case where restitution is impossible or inequitable. Further, it seems to us that the existence of a choice between two rights is also one of the conditions necessary for the applicability of the doctrine of approbate and reprobate. In the case before us there was no such choice before the appellant, and, therefore, his act in withdrawing the pre-emption price cannot preclude him for continuing his appeal. We, therefore, overrule the preliminary objection. The appeal will now be set down for hearing on merits. The costs of this hearing wil....
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....n appeal against the decree. Mr Nariman argues that it cannot be said that in the instant case the defendant-appellant has elected to exercise one of two alternative remedies and by virtue of such election he has deprived himself from exercising the other right, as the defendant-appellant has both the remedies open to him and no question of election on his part arises. Mr Nariman submits that in the facts and circumstances of this case it cannot legitimately be held that the appellant waived his statutory right to file an appeal against the decree and otherwise became estopped from exercising his right. In this connection Mr Nariman has referred to Halsbury's Laws of England, 4th Edn., Vol. 16, paras 1471, 1472, 1473 and 1474 at pp. 992 to 996 which read as follows: "1471. Waiver.-Waiver is the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct. It may sometimes resemble a form of election, and sometimes be based on ordinary principles of estoppel, although, unlike estoppel, waiver must always be an intentiona....
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....igh Court is not waived by appeal to a higher tribunal whose decision is expressed by Parliament to be final. 1472. Knowledge of rights essential.- For a release or waiver to be effectual it is essential that the person granting it should be fully informed as to his rights. Similarly, a confirmation of an invalid transaction is inoperative unless the person confirming knows of its invalidity. 1473. Estoppel and acquiescence.- The term 'acquiescence' is used where a person refrains from seeking redress when there is brought to his notice a violation of his rights of which he did not know at the time, and in that sense acquiescence is an element in laches. Subject to this, a person whose rights have been infringed without any knowledge or assent on his part has vested in him a right or action which, as a general rule, cannot be delivered without accord and satisfaction or release under seal. The term, is, however, properly used where a person having a right, and seeing another person about to commit it in the course of committing an act infringing upon the right, stands by in such a manner as really to induce the person committing the act, and who might oth....
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....roceed against a trustee."" 91. It proceeded further on facts to hold as under: "28. It is not in dispute that the defendant-appellant had filed an affidavit asking for postponement of payment of any money decree that may be passed and also for payment of the amount in instalments. The filing of an affidavit on the conclusion of hearing and before pronouncement of judgment cannot in the facts and circumstances of this case be considered to amount to such conduct on the part of the defendant-appellant as to disentitle him to file an appeal against any decree that may ultimately be passed against him. In view of the provisions contained in Order 20 Rule 11 (1) of the Code, the prayer for instalment has necessarily to be made before the pronouncement of the judgment and the passing of a decree, as the court after the passing of the decree can grant instalments only with the consent of the decree-holder in terms of the provisions contained in Order 20 Rule 11 (2) of the Code. Till the very last stage of the hearing of the suit the defendant-appellant had seriously contested the claim of the plaintiff-respondent and had in fact pressed for a counter-claim against the plainti....
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....depriving the defendant-appellant of his valuable statutory right of preferring an appeal against the decree. We have already held that the earlier Appeal No. 36 of 1981 against the provision regarding instalments was incompetent and the filing of an incompetent appeal or the withdrawal of the same does not entail any legal consequences, prejudicing the right of the defendant-appellant to file a proper appeal against the decree. The question which still remains to be considered is whether the act of filing an appeal against the order regarding instalments and not filing an appeal against the decree, when it was open to the defendant-appellant to do so, can be regarded to constitute such conduct on the part of the defendant-appellant as to disentitle him to maintain the present appeal. The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant-appellant. An appeal which is not competent is necessarily bound to fail, and in such a case the proper course for an appellant would be to file a valid and competent appeal. The filing of an incompetent appeal and the withdrawal of the same do not prejud....
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.... decree. The earlier Appeal No. 36 of 1981 which was filed on January 20, 1981 and was withdrawn on January 21, 1981 at the time of admission, could not possibly have caused any prejudice to the plaintiff-respondent. The promptitude with which the present appeal was filed just after a week on January 29, 1981 indicates that the defendant-appellant had never intended to give up their right of appeal against the decree and they have acted with all promptness and earnestness on being properly advised as to the legal position and as to their legal rights. The filing of the earlier Appeal No. 36 of 1981 in the facts and circumstances of this case does not amount to any representation or promise on the part of the defendant-appellant to accept the decree on merits and not to prefer an appeal from the same. There is also no question of election on the part of the defendant-appellant in preferring an appeal against the order regarding the instalment and not against the decree on merits. It is not a case where a party is called upon to elect one of two alternative remedies, when by election of one of two alternative remedies he loses his right to pursue the other. In the instant case, the d....
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.... appellants had registered their protest on more than one occasion and had also sought expeditious clearance of goods subject to an exercise of provisional reassessment being undertaken. These facts and circumstances clearly detract from the argument of a conscious abandonment of the right to question the reassessment or to accept the re-evaluation exercise undertaken without reservation of a right to challenge. C. Rejection of declared values: Assessing its validity 96. On an overall conspectus of the facts of the present case viewed alongside the material which has been placed for our consideration, we find that there was an abject failure on the part of the proper officer to disclose or communicate the reasons on the basis of which a reasonable doubt came to be raised with respect to declared value. We were informed that the formation of reasonable doubt was based on the contemporaneous import data with which the importer was confronted. However, and before us, it was conceded that the contemporaneous data which is spoken of was merely the data as appearing on the NIDB portal. We had an occasion to notice the host of precedents which had consistently held that the NIDB dat....
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....sequently proceeding to reassess the value. While the said reassessment may not be framed in elaborate terms, it would necessarily have to be reflective of the reasons which weighed upon the respondent to form the opinion that the declared value was not liable to be accepted. 99. Significantly in Commissioner of Customs vs. South India Television (P) Ltd. (2007) 6 SCC 373, the Supreme Court had underscored the fact that the burden of proving incorrect valuation lies on the Department. It held that before rejecting the transaction value declared in an invoice, the Department must provide cogent reasons and evidence. This includes identifying imports of identical or similar goods at higher prices around the same time. The Court emphasized that an invoice serves as evidence of the transaction value and mere suspicion or allegations of undervaluation are insufficient for rejection. The Department must, it held, conduct detailed inquiries, gather material evidence, or present information on comparable imports to substantiate its claim. If relying on declarations from the exporting country, the Department must explain how such declarations were obtained and establish their probative v....
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.... to establish that the invoice relied on by him is valid. Therefore, the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods." D. Value enhancement on the basis of NIDB data 100. Insofar as the aspect of whether the enhancement or re-evaluation of the 'declared value' can be based solely on the data available in the NIDB, in Agarwal Foundries, the Hyderabad Bench of the CESTAT had held that the customs authorities would be unjustified in enhancing the declared import values solely on the basis of NIDB data. It emphasized that transaction values cannot be rejected arbitrarily and that the authenticity of importer-issued invoices must be accepted unless discredited on the basis of cogent evidence. The CESTAT observed: "6.2) In all these cases, the imported goods are MS Steel (turning shredded scrap). The Customs Department has taken the view that the declared import values cannot be relied upon since they are based on invoices issued by traders and not at the manufacturers of such scrap. Based on this premise, the declared import values have been rejected and enhanced to higher level on the basis of purpo....
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....B data cannot be made the basis for enhancement of declared import values. The case laws relied upon by the appellant fully exemplify this ratio. 6.7) For example, the Tribunal in the case of Commissioner of Customs, New Delhi v. Nath International as reported at [2013 (289) ELT 305 (Tri.-Del.)] has laid down the following ratio: "7. We find that there is no dispute that the customs has power to reject the transaction value and enhance the assessable value in terms of Customs Valuation Rules. However, such rejection of transaction value and enhancement of assessable value has to be on the basis of some evidences on record. Contemporaneous imports have to be considered in reference to quality, quantity and country of origin with the imports under consideration. It has been held in a number of decisions that NIDB data cannot be made the basis for enhancement of value. Commissioner (Appeals) has relied upon various decisions of the Tribunal for holding any enhancement in assessment value, the transaction value to be first rejected based on legal permissible ground as indicated in the valuation Rules. He has also referred to Hon'ble Supreme Court decision in the c....
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....ctness of the declared assessable value. In the present case, the appellants did submit the invoice, purchase order and supporting contract documents with reference to the impugned consignments. Nothing more is required with the importer to further substantiate the value. In such situation, it is for the assessing officer to discount the documents with valid reasons in order to reject the declared value and thereafter to proceed with the re-assessment, after due enhancement. Explanation (1)(i)(iii)(a) in Rule 12 appears to be applicable 5 Customs Appeals Nos. 50503-50504/2017 and 50519-50520/2017 to the present case. In other words, the assessing officer having noticed higher value of contemporaneous import raised the doubt regarding the correctness of declared value. The legal provisions mentioned in the Explanation clearly stipulates that the contemporaneous value should be significantly higher for identical or similar goods at or about the same time, in a comparable commercial transaction. We find in the present case due examination about this crucial aspect has not been done by the assessing officer and comparison based on the contemporaneous import is not proper. Further, the ....
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....The Supreme Court in Commissioner vs. Agarwal Foundries (P) Ltd. 2020 (371) ELT A 295 (SC) dismissed the appeal of the customs authority holding that it found no reason to interfere. 101. Similarly, the Ahmedabad Bench of the CESTAT in Sedna Impex ruled that it would be impermissible in law to make a value enhancement solely on the basis of NIDB data. The case involved the rejection of declared values for imported polyester fabrics from China, with the adjudicating authority re-determining the values based on NIDB data. Both the Commissioner (Appeals) and the original authority upheld the enhanced valuation, prompting the appellants to challenge those decisions. The CESTAT concluded that NIDB data alone, without supporting evidence or clarity on relevant parameters, could not form the basis for for re-determining values and set aside the enhancement. On a consideration of the principles articulated by the Supreme Court in Eicher Tractors, the CESTAT had held: "4.3 The dispute in the present case is regarding the valuation of the goods imported by the Appellants. The Assessing Authority re-assessed the imported goods at values higher than what was declared by the Appella....
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.... place and absence of special circumstances, the price of imported goods is to be determined under Section 14(1A) in accordance with the rules framed in this behalf 7. The rules which have been framed are the Customs, Valuation (Determination of Price of Imported Goods) Rules, 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 o....
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....he context of the language of Rule 4 (1) must, therefore, be read as referring to "the particular transaction" and payability in respect of the transaction envisages a situation where payment of price may be deferred. 13. That Rule 4 is limited to the transaction in question is also supported by the provisions of the other Rules each of which provide for alternate modes of valuation and allow evidence of value of goods other than those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7A. When value of the imported goods cannot be determined under any of these provisions, the value is required to be determined under Rule 8 "using reasonable means consistent with the principles....
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....icy. It was found that there was justification, in the circumstances, for rejecting the price shown in the invoice. The transaction value having been rejected, assessment of value was made on the basis of the price list of the foreign vendor. 19. Both the decisions Padia Sales Corporation and Sharp Business Machines Pvt. Ltd. were distinguished subsequently in Mirah Exports Pvt. Ltd. v. Collector of Customs - 1998 (98) E.L.T. 3. As the facts of this case are somewhat similar to the case before us, it is dealt with in some detail. 20. Mirah Exports Pvt. Ltd. along with other importers had imported bearings at high rates of discount. The declared value was rejected by the Customs authorities, on the basis of the price list of the vendors. This Court set aside the decision of the respondent authorities accepting the argument that a discount is a recognised feature of international trade practice and that as long as those discounts are uniformly available to all and based on logical commercial bases, they cannot be denied under Section 14. It appears from the judgment that a distinction was drawn between a discounted price special to a particular customer and discount....
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....ircumstances warranting the rejection of the declared transaction value by the appellant on Bills of Entry. Further, Rule 12 of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 reads as below: xxxx xxxx xxxx From plain reading of the Rule 12 it is quite evident that the word "doubt" used in the rule has to be based on cogent reasons and evidences. No cogent evidence or reason has been put forth in the present case to justify the "doubt" of the assessing officer. Clearly, for rejection of the transaction value under Rule 12, there has to be a reasonable ground and it cannot be rejected merely on the ground that similar goods have been imported at higher value without examining the applicability of Rule 5 of Customs Valuation Rules, 2007. 4.5 The enhancement of the value done by the Customs department is only on the basis of value of contemporaneous imports. In this context we find that the relevant provisions for valuation under Customs Act are as below: Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Rule 12 - Explanation 1(iii) The Proper Officer shall have the powers to raise d....
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....ppressed the value. 4.7 We find that in the present case, the adjudicating authority enhanced the value as the declared value appears to be low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on the basis of NIDB data. Tribunal in the case of Neha Intercontinental Pvt. Ltd. v. Commissioner of Customs, Goa [2006 (202) E.L.T. 530 (Tri.-Mum.)] has held in the absence of rejection of transaction value, invoice value requires acceptance and when the contemporaneous import of similar goods is not established, value cannot be enhanced. In the case of Commissioner of Customs v. Modern Overseas [2005 (184) E.L.T. 65 (Tri.-Del.)] NIDB data was held to be insuffient, in the absence of clarity about various parameters. List of such decisions is unending and it is sufficient to say that NIDB data has been held to be insufficient for enhancement of value, in the absence of any other independent evidence. Admittedly in the present cases, there is no such evidence produced by the Revenue except reference to the NIDB data. In view of the discussions above, we hold that ....
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....toms Valuation Rules 2007 has been applied to arrive at the redetermined value and there is also no sequential application of Rules. We find that it is trite law that there has to be sequential application of rules to re-determine the value as has been held by the Hon'ble Apex Court in Eicher Tractors Pvt Ltd vs Commissioner of Customs Mumbai 2000 (122) ELT 321. Merely based on some emails, the transaction value cannot be disputed and negated without any cogent material." 103. The Chennai Bench of the Tribunal in M/s Gypsie Impex vs. Commissioner of Customs Final Order No. 40131/2024 dated 05 February 2024 addressed the limitations besetting the usage of NIDB data as the sole basis for re-determining transaction values. It is pertinent to note that Rule 10A of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 [1988 Rules], as analysed by the CESTAT in this decision, was similar to Rule 12 of the 2007 Rules. The CESTAT ruled in favour of the appellant, holding that NIDB data alone would be insufficient for value reassessment without corroborative evidence or contemporaneous import comparisons. This decision underscored the importance of comprehensive ev....