2004 (11) TMI 455 - AT - Customs

Summary

Issues:
Enhancement of value of imported goods based on imports from other countries, lack of evidence to discard contract value, quality comparison of goods from different origins.

Analysis:

The judgment pertains to the enhancement of the value of prime cold rolled grain oriented electrical steel sheets imported by the appellants from Russia. The authorities had increased the value from the declared US $1180 per metric ton to US $1350 per metric ton, citing importations from the USA and goods of Poland origin as the basis for enhancement. The appellant argued that goods of Russian origin were of inferior quality and that there was no evidence for the revenue to reject the contract value.

Upon review, the Commissioner (Appeals) did not accept the appellant's argument, stating that there was no evidence provided to demonstrate the inferior quality of Russian goods compared to those from the USA or Poland. However, the Tribunal found this reasoning flawed as it was the revenue's responsibility to demonstrate contemporaneous imports at a higher value. The reliance on bills of entry showing imports at a higher rate from different countries was deemed insufficient as it lacked contemporaneous evidence. Additionally, the Tribunal noted that the contract value was negotiated with foreign suppliers, and there was no evidence to suggest that it did not reflect the correct value of the goods.

Ultimately, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants, providing them with consequential relief. The decision was based on the lack of sufficient evidence to support the enhanced value of the imported goods and the failure of the revenue to establish that the contract value was inaccurate.

This judgment underscores the importance of providing concrete evidence to justify any enhancements to the declared value of imported goods and highlights the burden on the revenue to demonstrate contemporaneous imports at a higher value when challenging contract values negotiated with foreign suppliers.