2011 (5) TMI 439 - AT - Customs

Demand of duty - Valuation of the goods - Acrylic sheets imported - The importers filed bills of entry and declared value of US 500 per metric ton - The adjudicating authority did not accept the value and rejected the same and ordered loading of value and assessed the bills of entry at US 950 per metric ton - Held that - In case of any charge of mis-declaration the burden is on the department as held by Hon ble Supreme Court in the case of Union of India vs. Garware Nylons 1996 -TMI - 44318 - SUPREME COURT OF INDIA - In absence of any evidence indicating that the transaction value between the importer and the foreign supplier is not genuine and the goods having found to be as per the declaration in the invoice, the demand of duty cannot arise - Thus, decided in favour of assessee.

Summary

Issues: Valuation of imported goods - acrylic sheets (substandard, defective, old, used goods)

The judgment by the Appellate Tribunal CESTAT, New Delhi involved appeals by the revenue against impugned orders related to the valuation of imported goods, specifically acrylic sheets categorized as substandard, defective, old, and used goods. The importers declared a value of US $500 per metric ton, but the adjudicating authority rejected this value, ordering an assessment at US $950 per metric ton, leading to a duty demand. The Commissioner (Appeals) overturned this decision, stating that there was no valid reason for rejecting the declared value. The key issue revolved around whether the declared transaction value accurately reflected the goods' worth for customs duty assessment.

The Departmental Representative argued that the goods were remnants or by-products of prime goods and not produced for sale, emphasizing that market price was not the sole consideration for determining the value of imported goods. They contended that the transaction value of defective goods could not be accepted as the true value for customs duty purposes. On the other hand, the Counsel for the respondents supported the Commissioner (Appeals) decision, asserting that the goods were not mis-declared and were in accordance with the inspection report.

Upon reviewing the submissions from both sides, the Tribunal found that the issue at hand was the valuation of the imported acrylic sheets classified as defective, off-grade, second-hand, old, and substandard goods. The Tribunal highlighted the Commissioner (Appeals) findings, emphasizing that there was no evidence to suggest mis-declaration of goods or any special relationship between the importer and supplier influencing the transaction value. The Tribunal referenced legal precedents to support the importance of genuine invoice values in determining customs duty, stressing the lack of evidence provided by the revenue to challenge the authenticity of the declared transaction value.

Ultimately, the Tribunal concluded that the revenue failed to present any evidence to dispute the genuineness of the invoice price or demonstrate any additional consideration beyond the transaction value. As a result, the Tribunal upheld the Commissioner (Appeals) decision, deeming the impugned orders correct and rejecting the revenue's appeals as lacking merit. The judgment underscored the significance of genuine transaction values in customs valuation assessments and the burden of proof on the revenue to challenge such values effectively.