2011 (2) TMI 583 - AT - Central Excise

Demand - Additional duty - Board s Circular No. 91/2003-Cus., dated 14-10-2003 - Misdeclaration - After rejecting the transaction value PLATT prices were adopted - Merely taking the value of PLATT s prices rate is depend on the facts of each case i.e. quality, description and payment condition, etc. to arrive at the correct valuation, both the lower authorities have not applied the correct Customs Valuation Rules, hence the loading of value in this matters are unjustified - Appeal is allowed

Summary

Issues:
1. Loading of value on transaction value of imported goods without proper justification.
2. Compliance with Customs Valuation Rules in assessing the value of imported goods.
3. Rejection of transaction value and reliance on PLATT's prices rate for loading additional value.
4. Adherence to principles of natural justice in valuation of imported goods.

Analysis:
1. The appellants challenged the loading of value on the transaction value of imported goods without sufficient reasoning. The department enhanced the value of polyethylene Polymer LD Grade DF 810 imported from Singapore without a speaking order, leading to additional customs duty demand. The lower appellate authority upheld this decision, prompting the appeal. The appellants argued that the authorities' actions were arbitrary as they failed to provide reasons for rejecting the transaction value and resorting to PLATT's prices, violating Customs Valuation Rules.

2. The learned Advocate contended that the loading of value without rejecting the transaction value and the reliance on PLATT's prices by customs authorities were unjustified. The Commissioner (Appeals) did not explain the basis for rejecting the transaction value, especially in the absence of contemporaneous imports of similar items. The loading of value based on PLATT's prices was deemed arbitrary and in violation of Customs Valuation Rules, necessitating the reversal of the impugned order.

3. The Respondent, represented by the SDR, supported the lower appellate authority's decision to reject the transaction value and load additional value based on PLATT's prices. Citing the Varsha Plastics Pvt. Ltd. case, the Respondent argued that the rejection of transaction value due to discrepancies justified resorting to alternative valuation methods. However, the lack of explanation for rejecting the transaction value in the present case indicated a departure from established valuation principles.

4. Upon careful consideration, the Tribunal found that the loading of value without the appellants' consent violated Circular No. 91/2003-Cus. and the principle of natural justice. The authorities failed to follow the Customs Valuation Rules by not exploring contemporaneous imports or providing a valid reason for rejecting the transaction value. The reliance on PLATT's prices rate was deemed unjustified, as it did not align with the valuation methodology prescribed by law. The Tribunal set aside the impugned orders, allowing the appeals and granting consequential relief to the appellants.

In conclusion, the judgment highlighted the importance of adhering to Customs Valuation Rules, providing justifications for valuation decisions, and ensuring compliance with principles of natural justice in assessing imported goods' value. The Tribunal emphasized the need for authorities to follow prescribed valuation methods and consider contemporaneous imports before resorting to alternative pricing references.