2011 (2) TMI 485 - AT - Customs

Enhancement of value - Imported goods - A bill of entry declaring the price of the goods as US 810 per MT - As the value in the other contemporaneous imports of similar/identical goods was found to be as US 1040 per MT, Revenue initiated proceedings for enhancement of value and vide adjudication order passed by the original adjudicating authority, enhanced the same to US 1035 per MT - From the order of Commissioner (Appeals) find that the value stands enhanced by him on the basis of doubt about the correctness of the transaction value. There is otherwise no concrete evidence to show that the invoice value of the contract produced on record by the respondent reflected in correct value - In such a scenario the enhancement of value was not justified - Decided in favour of assessee.

Summary

Issues:
1. Enhancement of declared value of imported goods
2. Contemporaneous imports and determination of assessable value
3. Justification of enhancement by the Revenue

Analysis:
1. Enhancement of declared value of imported goods:
The case involved the import of Polyester Chips Semi Dull Three Gun Brand No.SP-1912 with a declared value of US $810 per MT. The Revenue initiated proceedings for enhancement of value, leading to an adjudication order setting the value at US $1035 per MT. Despite the importer's submissions and production of a certificate from the supplier, the value was again enhanced to US $1035 per MT during re-adjudication.

2. Contemporaneous imports and determination of assessable value:
The appellate authority emphasized the need to demonstrate abnormal/special discounts or reductions from the ordinary competitive price to reject the transaction value. While the importer presented a contract invoice, its credibility was questioned due to lack of reference to the contract. The authority considered other contemporaneous imports at US $680 and US $720.74 per MT, which were enhanced to US $885 and US $960 per MT, respectively. Ultimately, the assessable value was determined at US $885 per MT.

3. Justification of enhancement by the Revenue:
The Revenue contended that another bill of entry dated 07.06.05 assessed the identical goods at US $1050 per MT, suggesting a higher value compared to the importer's declared value. However, the Commissioner (Appeals) based the enhancement on doubts about the transaction value's correctness, lacking concrete evidence to support the increase. Despite the Revenue's appeal for further enhancement, the tribunal found no grounds to interfere with the Commissioner's decision as the importer did not appeal, resulting in the rejection of the Revenue's appeal.

This judgment highlights the importance of substantiating declared values with evidence of competitive pricing and contemporaneous imports. It also underscores the need for concrete evidence to justify value enhancements, balancing the interests of both the Revenue and importers in customs valuation disputes.