2009 (1) TMI 708 - AT - Customs

Valuation - Enhancement of - Held that - Once the price was enhanced the revenue is supposed to make all the enquiries as it may consider necessary before increasing the price. The second show cause notice cannot be issued on the same subject when the declared price was not accepted initially and already stands enhanced. Besides we further note that the price has been enhanced on the basis of some quotations etc. and no direct evidence is available. In view of this the subsequent enhancement cannot be upheld - appeal dismissed.

Summary

Issues:

1. Validity of the show cause notice issued by the revenue proposing enhancement of imported goods' value and recovery of differential duty.
2. Adjudication by the Commissioner holding the show cause notice time-barred and dropping the proceedings.
3. Revenue's appeal contending that the show cause notice was not time-barred due to new facts revealed during investigations.
4. Consideration of price quotations and retracted statements in determining the value of imported goods.
5. Decision on the appeal based on the acceptance of declared price, necessity of further enquiries, and lack of direct evidence.

Analysis:

1. The revenue issued a show cause notice proposing the enhancement of the value of imported air-conditioners based on investigations revealing discrepancies in the declared price. The Commissioner adjudicated the matter, holding the notice time-barred and dropping the proceedings due to lack of corroborating evidence for the proposed enhancements.

2. The Commissioner's decision was based on the grounds that the quotations obtained were not directly linked to the importer, lacked authenticity, and the show cause notice was issued after the assessment had attained finality, rendering it time-barred.

3. In the revenue's appeal, it was contended that the show cause notice was not time-barred as new facts emerged during investigations, which were allegedly suppressed by the importer during the initial filing. Reference was made to legal precedents supporting the issuance of show cause notices based on revised valuations and the use of price quotations to determine discrepancies.

4. The revenue argued that the enhanced price was justified based on the quotations obtained through diplomatic channels, which indicated a significant difference from the declared price. Additionally, retracted statements were reconfirmed and supported by prevailing market prices and statements from other importers.

5. The appellate tribunal rejected the revenue's appeal, emphasizing that once the price was enhanced, further enquiries were necessary before issuing a second show cause notice on the same subject. The lack of direct evidence supporting the price enhancements led to the dismissal of the appeal, as the initial price enhancement was not upheld.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the tribunal's decision, providing a comprehensive understanding of the case.