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Assessable value for customs duty on imported polypropylene sheets. Analysis: The dispute revolved around the assessable value for customs duty concerning two imports of polypropylene sheets. The appellants imported goods from Taiwan and declared a transaction value of US $450 per metric ton, which was rejected by customs authorities, who assessed it at US $750 per metric ton without serving any show cause notice or providing material for the higher valuation. An appeal to the Commissioner (Appeals) was also dismissed based on the assessment done at the loaded value of US $750 per metric ton. The appellant argued that the burden of proof for undervaluation lies with the department, and the rejection of their declared value lacked a valid basis. However, the department presented evidence of contemporaneous imports at higher prices to justify the valuation, shifting the onus to the importer to prove the validity of the invoice value. The appellant failed to substantiate their claim adequately, leading to the rejection of their appeal against the assessment. The appellant contended that they had a contract with the supplier at US $450 per metric ton, emphasizing the requirement of transaction value as the basis for customs valuation under Rule 4 of Customs Valuation Rules. They highlighted that none of the exceptions in the rule applied to their case. The appellant also raised concerns about not receiving reasons for the rejection of their transaction value, hindering their ability to defend against the Revenue's decision effectively. The assessment process was deemed flawed as it lacked transparency and justification for rejecting the transaction value in favor of a higher valuation. The failure to provide a show cause notice or alternative valuation basis to the appellant rendered them unable to comprehend the reasons behind the assessment decision. The arbitrary nature of the assessment, coupled with the absence of evidence supporting oral notice to the clearing agent, further weakened the department's position. The Commissioner's reliance on import values at Rs. 278 per kg to justify the assessment at Rs. 34 per kg was deemed unsubstantiated and lacking in factual basis. The vast variation in prices required a detailed explanation based on quality, grade, and specifications, which was absent in the assessment process. The Commissioner's reasoning for enhancing the value based on prices from other imports was found to be inadequate and not grounded in factual analysis. The presentation of NIDB data by the department during the hearing, showcasing import values of polypropylene sheets, was deemed insufficient for a comprehensive analysis. The varying unit prices and the timing of the imports in question, which occurred after the appellant's imports, raised doubts about the applicability and relevance of the data. The lack of disclosure to the importer and the necessity for a detailed adjudication proceeding to analyze the data properly highlighted the inadequacy of the department's evidence. Ultimately, the Tribunal set aside the impugned order, allowing the appeals with consequential relief to the appellant due to the deficiencies in the assessment process and the lack of substantive evidence supporting the valuation decision.
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