2008 (10) TMI 423 - AT - Customs

Summary

Issues involved: Appeal against setting aside enhanced value of imported goods by Commissioner (Appeals) based on contract details and market comparisons.

Details of the judgment:

1. Issue 1 - Enhanced value of imported goods set aside by Commissioner (Appeals):
- The appeal was filed by Revenue against the impugned order setting aside the enhanced value of the imported goods.
- The respondents imported "Fully drawn yarn 75 Deniers/72F" and declared the value at 0.71 USD/kg.
- Revenue relied on NIDB data and market prices to enhance the value of the goods.
- Commissioner (Appeals) set aside the enhanced value citing various grounds:
- Direct contract with the manufacturer, not a trader.
- Large quantity contract without contemporaneous export available.
- Discounts by shipping line due to the huge quantity.
- Contract for uneven grade FDY leading to high wastage and stoppages during production.
- 100% down payment made with no agent or commission involved.
- Penalty for not lifting agreed quantity within the specified period.

2. Issue 2 - Revenue's appeal for enhancing the value of imported goods:
- Revenue contended that the value of raw material was higher than the imported yarn.
- NIDB data showed identical goods imported at a higher value.
- Revenue compared imported goods with local market prices and found a significant profit margin.
- Revenue sought to enhance the value based on these comparisons.

3. Decision and rationale:
- The contract was for 300 tonnes of uneven yarn with potential wastage during production.
- Revenue's comparison data was for smaller quantities imported by others, not relevant to the large quantity under dispute.
- The Tribunal found no merit in the appeal and dismissed it.
- The judgment was dictated and pronounced in open court by S.S. Kang, Vice-President.