2010 (9) TMI 375 - SC - Customs

Valuation rejection of transaction value under valuation of imported computer importer and supplier were related - price of similar goods imported by the appellant was even higher Held that - similar goods imported by the appellant itself for identical specifications were higher than those declared - deemed value as is found by the Commissioner of Customs and upheld by the Tribunal being higher than the transaction value - appeal is dismissed

Summary

Issues:
1. Allegation of undervaluation of imported goods.
2. Dispute over the declared value of imported computers.
3. Challenge to the Commissioner's findings on transactional value.
4. Applicability of deemed value over transactional value.
5. Interpretation of Section 14 in relation to transactional value.

Analysis:
The case involved an appeal against an order by the CESTAT upholding the Commissioner of Customs' decision regarding the imported computers. The Customs Department alleged undervaluation of goods imported by the appellant from Hong Kong. The Department claimed that the goods were actually manufactured by a different company, leading to provisional assessment and subsequent finalization of the assessment by the Department itself. The Commissioner's order against the appellant was based on these allegations.

The appellant challenged this order by filing a statutory appeal before the CESTAT, which was also dismissed. The appellant argued that the declared values were fair and based on manufacturer prices to capture the market. However, the respondent contended that prices for similar goods of identical specifications were higher than those declared by the appellant. The Customs Department's findings, upheld by the CESTAT, supported this contention.

Upon review, the Supreme Court found that the supplier was not the manufacturer, and the appellant and supplier were related. The Commissioner held that the declared prices were not the true transactional value and were aimed at evading customs duty. The Tribunal upheld these findings, emphasizing the prices of similar goods. The Court noted that the appellant did not produce the manufacturers' invoice, and the declared prices were lower than the actual transactional value, as evidenced by higher prices of similar goods imported by the appellant.

Referring to the decision in Radhey Shyam Ratanlal & Anr. v. Commissioner of Customs, Mumbai, the Court determined that deemed value would prevail over transactional value when Rule 4 did not reflect actual selling prices. As the deemed value was higher than the transactional value in this case, the Court concluded that the deemed value took precedence. Therefore, the Court dismissed the appeal, finding no merit in the appellant's arguments.