2001 (12) TMI 378 - AT - Customs

Summary

Issues:
1. Rejection of declared price of imported goods and enhancement of price by customs authorities.
2. Applicability of Customs Valuation Rules, 1988 and Section 14 of the Customs Act, 1962.
3. Justification for rejecting transaction value and application of Rule 10A.
4. Lack of reference to Rule 10A in the orders and absence of show cause notice and personal hearing.
5. Analysis of price variation and justification for setting aside the impugned orders.

Issue 1: Rejection of declared price and enhancement by customs authorities
The appeals were filed against the order of the Commissioner of Customs (Appeals) rejecting the declared price of synthetic Butyl rubber imported by the appellants and ordering an enhancement to US Dollar 1.75 per kg. The Assistant Commissioner of Customs had issued orders rejecting the declared price and enhancing it for the imported goods.

Issue 2: Applicability of Customs Valuation Rules and Customs Act
The appellant argued that the rejection of the transaction value was unjustified as none of the provisions under sub-rule (2) of Rule 4 of Customs Valuation Rules, 1988 applied to their case. They contended that the transaction value should have been accepted as the actual price paid for the goods sold in international trade under Section 14 of the Customs Act, 1962.

Issue 3: Justification for rejecting transaction value and Rule 10A
The appellant further contended that there was no justification for rejecting the transaction value as Rule 10A was not applicable to the first import on 29-1-98, and there was no indication that the authorities had taken recourse to Rule 10A. The Departmental Representative argued that Rule 10A was justified for the subsequent imports as the material provided by the appellant did not support their contention.

Issue 4: Lack of reference to Rule 10A and absence of show cause notice
The Departmental Representative argued that the absence of a reference to Rule 10A in the orders did not mean it was not applied, and there was no show cause notice or personal hearing as opted by the appellant, which was deemed justifiable in this case.

Issue 5: Price variation analysis and setting aside of orders
The Tribunal found that even if Rule 10A was applicable to the subsequent imports, there was insufficient evidence to doubt the accuracy of the declared value. The marginal difference in price did not create a reasonable doubt, and the variation was within the normal range. Therefore, the Tribunal set aside the impugned orders and allowed the appeals.

This detailed analysis of the judgment covers the issues related to the rejection of declared prices, applicability of Customs Valuation Rules and Section 14 of the Customs Act, justification for rejecting transaction values, application of Rule 10A, absence of references and notices, and the analysis of price variations leading to the decision to set aside the impugned orders.