2006 (2) TMI 532 - AT - Customs

Summary

Issues:
1. Enhancement of assessable value of imported aluminium scrap without show cause notice.
2. Reliance on prices from external sources for value determination.
3. Admissibility of transaction value and contemporaneous import evidence.

Issue 1: Enhancement of assessable value without show cause notice
The case involved the appellants importing aluminium scrap and declaring the assessable value at US $350 per Metric Tonne, which was later enhanced to US $400 per Metric Tonne by the Original Authority. Subsequently, the Department appealed for a further increase to US $800 per Metric Tonne without issuing a show cause notice. The appellants argued that this new enhancement was unjustified as it was done without any evidence of contemporaneous import and without prior notice. The Tribunal held that the sudden request for a higher assessable value after the Original Authority's decision, without giving the appellants an opportunity to respond, was not legally sound. The Tribunal emphasized the importance of due process and set aside the enhancement to US $800 per Metric Tonne.

Issue 2: Reliance on external sources for value determination
The Department sought to justify the enhancement of the assessable value to US $800 per Metric Tonne by relying on prices published in 'The Economic Times' and the 'Mineral and Metal Bulletin.' However, the Tribunal noted that these sources were not contemporaneous in nature and had not been accepted in similar cases. The Tribunal referenced precedents where such external sources were not considered sufficient evidence for determining the value of imported goods. Ultimately, the Tribunal found the reliance on these external sources to be inadequate and not in line with legal standards.

Issue 3: Admissibility of transaction value and contemporaneous import evidence
The appellants argued that the transaction value of US $400 per Metric Tonne, accepted by the Original Authority based on the appellants' previous imports, should not have been further increased to US $800 per Metric Tonne. They contended that the transaction value cannot be rejected without evidence of contemporaneous import at a higher rate. The Tribunal referred to the Apex Court judgment in the Eicher Tractors case, emphasizing that transaction value should not be enhanced in the absence of supporting evidence. The Tribunal found that the Department failed to provide such evidence and, therefore, concluded that the further enhancement to US $800 per Metric Tonne was not justified. The Tribunal upheld the transaction value of US $400 per Metric Tonne and set aside the higher enhancement.

In conclusion, the Appellate Tribunal CESTAT, Bangalore, in a detailed analysis of the issues involved, set aside the enhancement of the assessable value of imported aluminium scrap to US $800 per Metric Tonne. The Tribunal emphasized the importance of due process, the admissibility of transaction value, and the insufficiency of relying on external sources for value determination. The decision highlighted the need for evidence of contemporaneous import to support any increase in the declared value of imported goods.