2011 (5) TMI 532 - AT - Customs

Enhancement of Assessable value - MRP declared by the appellants based upon the enhanced assessable value - Held that - Commissioner has not dealt with the basic stand of the appellant that there being no dispute about the transaction value, being the correct value paid by them to the foreign suppler, there is no need to go through the other provisions of the Customs Valuation Rules. The only reason for rejecting the transaction value by the Commissioner is that the same appears to be on lower side when compared with the other contemporaneous records. However, the appellants strongly contended that they have purchased the electronics items from Dubai, in stock lot having different country of origin. Further, it is also seen that the bills of entry relied upon by the Revenue are not matching with the present bill of entry either in time or in quantity or in model numbers. As rightly contended by the learned advocate, the market of electronic items moves very fast on account of introduction of new models in the field and with new technology. As such, even a gap of 5-6 months can be considered as huge gap. As admittedly the Revenue has not produced any evidence on record to reflect upon the fact that the transaction value made by the importers to the foreign sellers was not correct or there was any financial flow back from the importers to the foreign supplier, the enhancement of the assessable value based upon the other bills of entry, which cannot be held to be contemporaneous on account of different time, different quantity and different models, cannot be held to be justified. Thus enhancement of the MRP declared by the appellants based upon the enhanced assessable value, cannot be upheld. In favour of assessee.

Summary

Issues:
Enhancement of assessable value based on contemporaneous imports and web-site prices, justification of MRP declared in bill of entry.

Analysis:
1. Enhancement of Assessable Value:
The Revenue initiated proceedings against the appellant for enhancement of assessable value of imported goods based on the belief that the declared value was much lower. The appellant argued that the transaction value should be accepted as correct, as they had imported assorted electronics items as stock lot, unlike uniform consignments. They highlighted the fast-moving nature of the electronics market, where a gap of 5-6 months could significantly affect prices. The Tribunal noted that the Revenue failed to provide evidence that the transaction value was incorrect or involved financial discrepancies. As the contemporaneous imports used as a basis for enhancement were not matching in time, quantity, or model numbers, the Tribunal held the enhancement unjustified.

2. Justification of MRP Declared:
The Commissioner enhanced the MRP based on the means and parameters adopted by the assessee, without proper documentary evidence or market survey. The Tribunal found this approach lacking a legal basis. The appellants argued that there was no evidence to show they sold goods at a higher MRP than declared. The Tribunal agreed that raising the MRP based on information from a third party was not justified. They emphasized that the enhancement of MRP based on enhanced assessable value could not be upheld. Therefore, the Tribunal set aside the impugned order and allowed both appeals in favor of the appellants, providing consequential relief.

In conclusion, the Tribunal found that the Revenue's attempt to enhance the assessable value and MRP declared by the appellants lacked proper justification and evidence. The Tribunal emphasized the importance of transaction value and the specific circumstances of the imports in question. The decision highlights the need for substantive evidence and contemporaneous relevance in determining the assessable value and MRP of imported goods.