2006 (3) TMI 515 - AT - Customs

Valuation - Enhancement of value - transaction value under Rule 4 - declared value - HELD THAT - We are of the considered view that the apex Court s ruling in Eicher Tractors 2000 (11) TMI 139 - SUPREME COURT was rightly followed by ld Commissioner (Appeals) in the present case. The subject goods were imported in terms of a contract indicating USD 13.50 as the unit price agreed between the contracting parties. The import was made within the contracted period. The department has no case that any amount over and above the contracted price was paid by the importer to the supplier nor is it their case that the importer was related to the supplier or that the price paid was influenced by any extra-commercial considerations. In the circumstance there is no valid reason to reject the transaction value of the goods under Rule 4(1) read with Section 14. This is particularly so as the appellant has not established that any of the special circumstances particularised under Rule 4(2) existed in this case. Declared value - What was declared in the Bill of Entry was USD 13.5 per kg. But subsequently the assessee agreed to a marginal enhancement to USD 13.94 per kg. Thus the declared value stood modified as USD 13.94 per kg. on account of the assessee s voluntary acquiescence. It was this value (USD 13.94 per kg.) which has been accepted by the lower appellate authority as the basis of the assessable value of the goods. In view of the apex Court s ruling in Eicher Tractors 2000 (11) TMI 139 - SUPREME COURT and the Tribunal s decision in Andhra Sugars 2005 (6) TMI 185 - CESTAT BANGALORE and Agarwal Industries 2005 (8) TMI 225 - CESTAT BANGALORE we have to sustain the order of learned Commissioner (Appeals). In the result the Revenue s appeal gets dismissed.

Summary

Issues:
1. Determination of assessable value of imported goods based on declared price versus contemporaneous price.
2. Application of Customs (Valuation) Rules, 1988 and relevant case laws.
3. Consideration of amendments to Rule 4 and implications on transaction value.
4. Distinction between declared value, transaction value, and contemporaneous price.
5. Impact of voluntary enhancement of declared value on assessable value determination.

Issue 1: Determination of Assessable Value

The case involved the import of mulberry raw silk at a declared unit price of USD 13.5 per kg. The department sought to reject this price based on higher contemporaneous prices of identical goods from the same country. The original authority enhanced the unit price to USD 22.36 per kg., invoking Rule 8 of the Customs (Valuation) Rules, 1988. However, the appellate authority accepted the declared price of USD 13.94 per kg. as the basis for assessable value, considering the absence of specific circumstances under Rule 4(2) justifying rejection of the declared price.

Issue 2: Application of Customs (Valuation) Rules and Case Laws

The original authority's reliance on the Hon'ble Supreme Court's judgment in Rajkumar Knitting Mills Pvt. Ltd. v. Collector was challenged in appeal. The appellate authority distinguished this case and applied the ruling in Eicher Tractors Ltd. v. Commissioner, emphasizing the acceptance of the transaction value unless specific circumstances under Rule 4(2) existed. The Tribunal upheld this approach, emphasizing the importance of the amended rule and the absence of justifiable reasons to reject the declared value.

Issue 3: Amendments to Rule 4 and Transaction Value

The Tribunal highlighted the amendment to Rule 4, which shifted the focus to transaction value and commercial considerations. The apex Court's decision in Eicher Tractors case was deemed applicable due to the amended rule, emphasizing the significance of the transaction value agreed upon by the contracting parties.

Issue 4: Distinction Between Declared Value and Contemporaneous Price

The Tribunal distinguished cases such as Andhra Sugars Ltd. and Agarwal Industries, where the transaction value was accepted over contemporaneous prices of identical goods. The rejection of contemporaneous prices in favor of the declared value was justified based on commercial agreements and lack of influencing factors beyond normal commercial considerations.

Issue 5: Impact of Voluntary Enhancement of Declared Value

The voluntary enhancement of the declared value by the importer to USD 13.94 per kg. was considered, leading to the acceptance of this modified value as the basis for assessable value determination. The Tribunal aligned with the rulings in Eicher Tractors and previous cases, emphasizing the importance of commercial agreements and lack of justifiable reasons to reject declared values.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the acceptance of the declared value as the basis for determining the assessable value of the imported goods, in accordance with relevant Customs (Valuation) Rules and established case laws.