2011 (8) TMI 936 - AT - Customs

Provisional assessment - enhancement of transaction value is based on three invoices without relevant bills of entry and, therefore, it cannot be concluded that these invoices pertain to actual imports - Rule 5 of the Customs Valuation Rules, 1988 - adjudicating authority proceeded to determine the value under Rule 8 of the Customs Valuation Rules, 1988 - if the value is determined under Rule 8, which is the residual method of valuation, the basis for determination of value has to be clearly spelt out - If one goes by the three invoices relied upon by the department, it is noticed that the invoices are not in respect of contemporaneous imports - the goods mentioned in the invoices relied upon by the department has been shipped from different places such as Singapore, Hong Kong etc. and the quantities are also varying - Decided in favor of the assessee

Summary

Issues:
1. Determination of assessable value under Customs Valuation Rules.
2. Application of Rule 5 vs. Rule 8 of the Customs Valuation Rules.
3. Prima facie case for complete waiver of pre-deposit.

Analysis:
1. The case involves a dispute over the determination of the assessable value of imported goods under the Customs Valuation Rules. The appellant imported integrated circuits at declared values, which the department found to be lower compared to contemporaneous imports. A show cause notice was issued proposing to load the values of the goods based on contemporaneous imports, leading to the assessment of a differential duty.

2. The main contention in the appeal was that the enhancement of transaction value was based on three invoices without relevant bills of entry, making it uncertain if these invoices pertained to actual imports. Additionally, while the show cause notice proposed to determine the value under Rule 5 of the Valuation Rules, the order-in-original determined the value under Rule 8. The appellate authority upheld the determination under Rule 8, which the appellant challenged.

3. The Tribunal noted that the adjudicating authority had exceeded the scope of the show cause notice by determining the value under Rule 8 instead of Rule 5, without providing a clear basis for the valuation. The invoices relied upon were not for contemporaneous imports, and the basis for adopting those values was unclear. Consequently, the Tribunal found that the appellant had established a prima facie case for a complete waiver of the dues adjudged in the impugned order. As a result, the Tribunal granted a complete waiver of the dues and stayed the recovery during the appeal process.