2011 (2) TMI 742 - AT - Customs

Value of imported goods - adjudicating authority enhanced the value - applicants contended that the transaction price can be rejected only if the exceptional circumstances stipulated in Rule 4(2) of the Valuation Rules are found to be attracted, as held by the Apex Court in Eicher Tractors Ltd. v. CC (2000 -TMI - 45536 - SUPREME COURT OF INDIA) - Held that - only basis for rejecting the transaction value was noticing of contemporaneous imports at higher prices, the transaction value was required to be accepted, order of rejection of transaction value set aside and loading of value, and allow the appeal.

Issues Involved:

1. Valuation of Imported Goods.
2. Rejection of Transaction Value.
3. Comparison with Contemporaneous Imports.
4. Application of Customs Valuation Rules.
5. Provisional Release and Detention of Goods.
6. Issuance of Detention Certificate.
7. Cross Objections by Revenue.

Detailed Analysis:

1. Valuation of Imported Goods:
The dispute centers on the valuation of imported betel nuts, where the importer declared the value at US $275 per MT. The adjudicating authority enhanced this value to Rs.34/- per kg, which was upheld by the Commissioner of Customs (Appeals). The tribunal had to decide whether the enhanced valuation was justified.

2. Rejection of Transaction Value:
The appellants argued that the rejection of the invoice price by the adjudicating authority under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (CVR, 2007) was unlawful. The tribunal noted that Rule 12 does not empower the assessing officer to reject the transaction value without establishing that it was not genuine. There were no allegations of mis-description, fake invoices, or any other considerations affecting the transaction value.

3. Comparison with Contemporaneous Imports:
The department relied on imports at Nhava Sheva and Chennai to justify the enhanced valuation. The appellants contended that these imports were not comparable in terms of quality, quantity, and commercial level. The tribunal agreed, noting that the description and quantity of the goods in the other imports were different and not comparable to the appellant's imports.

4. Application of Customs Valuation Rules:
The tribunal emphasized that the lower authorities did not find any exceptions under Rule 3(2) of CVR, 2007 that would justify rejecting the transaction value. The tribunal cited the Supreme Court's judgment in Eicher Tractors Ltd., which mandates accepting the transaction value unless specific exceptions apply. The tribunal held that the department failed to produce any material evidence to show that the goods were comparable to other imports, making the invocation of Rule 5 unsustainable.

5. Provisional Release and Detention of Goods:
The appellants sought provisional release of the goods due to heavy demurrages. The tribunal noted that the appellants had approached the Kerala High Court for provisional clearance and expedited hearing. The tribunal found no justification for the department's contention that the importer should first pay the duty and seek a refund later.

6. Issuance of Detention Certificate:
The tribunal directed the customs authorities to issue a detention certificate as per Regulation 6(1)(l) of the Handling of Cargo in the Customs Areas Regulation, 2009. This would enable the appellants to claim a waiver of demurrage and detention charges for the period the goods remained detained.

7. Cross Objections by Revenue:
The tribunal dismissed the cross objections filed by the revenue, noting that they were in support of the impugned order and did not present any new findings that could aggrieve the revenue.

Conclusion:
The tribunal set aside the impugned order, accepted the transaction value declared by the appellants, and directed the customs authorities to allow clearance of the goods within three days. The tribunal also directed the issuance of a detention certificate to the appellants for the period the goods remained detained.

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