2009 (2) TMI 563 - AT - Customs

Summary

Issues involved: Whether the value declared by the appellant shall be regarded as transaction value under Section 14 of the Customs Act, 1962 read with Rule 4(1) of Customs Valuation Rules, 1988.

The appellant argued that all facts and figures were made available to the proper officer at the time of import, and the officer was satisfied after testing the goods through a Chartered Engineer's observations and certificates. The appellant faced proceedings due to audit objection and interpretation of a Board's Circular. The appellant's counsel relied on the judgment in Eicher Tractors Ltd. v. CC and Tolin Rubbers case, emphasizing that unless circumstances exist to bring the transaction beyond Rule 4(2), the declared value should be accepted under Rule 4(1) without invoking Rule 10 mechanically.

The respondent contended that the Board's circular allows for depreciation of assets, and the value after depreciation is acceptable as the transaction value. The respondent relied on the judgment in Gajra Bevel Gears v. CC and stated that the authorities invoked Rule 12A of the Valuation Rules based on reasons provided. The Chartered Engineer's certificate disclosing the year of manufacture supported the application of the circular for depreciation of imported assets.

Upon hearing both sides, the Tribunal found that the show-cause notice did not provide reasons to discard the transaction value declared by the appellant. Without cogent reasons satisfying Rule 4(2), the notice could not proceed for adjudication. The Tribunal questioned why the depreciated value should be considered the transaction value without proper justification. As the appellant was not given an opportunity to rebut with cogent reasons, the proceeding was deemed unsustainable. Consequently, the Tribunal directed that the value declared by the appellant should be accepted as the transaction value, leading to the appellant's success in the case.