2013 (4) TMI 86 - AT - Customs

Reimport of goods Valuation - Claim of benefit Notification No. 158/95-Cus - return of the goods, was beyond the period of one year, as contained in the said notification, the benefit was not extended- Valuation demanded by the department - Held that - Revenue is assessing the re-imported rejected and defective goods in terms of the Valuation Rules meant for first time import of the goods but the present goods are re-import of already exported goods. The same are defective and rejected by the customers and as such we do not agree with the Revenue to apply Valuation Rules for adopting the original transaction value between the buyer and the seller in terms of provisions of Rule 4. - Decided against the revenue.

Summary

Issues:
1. Interpretation of Notification No. 158/95-Cus. regarding benefit extension for re-imported goods beyond the stipulated period.
2. Determination of assessable value for re-imported defective goods.
3. Application of Valuation Rules for re-imported goods rejected by customers.

Analysis:
1. The case involved the export and subsequent re-import of rubber bladders by the respondents to Pakistan. The initial export declaration valued the goods at Rs. 25.56 per piece. Upon re-import due to rejection by the buyer, the declared value was Rs. 2.06 per piece. The respondents sought the benefit of Notification No. 158/95-Cus., but the lower authority denied it due to exceeding the one-year return period specified in the notification.

2. The Revenue argued for adopting the original declared value at the time of export for customs duty payment on re-import. However, the respondents contended that the defective nature of the goods rendered them practically valueless. The Commissioner (Appeals) sided with the respondents, setting the total assessable value at Rs. 7,224 and confirming a demand of Rs. 3,670. The Tribunal upheld this decision, rejecting the Revenue's plea to apply Valuation Rules for first-time imports to the re-imported defective goods.

3. The Tribunal emphasized that the re-imported goods were already exported, defective, and rejected by customers, differing from first-time imports subject to Valuation Rules. The Tribunal found no fault in the Commissioner's decision and dismissed the Revenue's appeal. It noted the absence of evidence supporting a higher value than the Rs. 2.06 per piece declared by the respondents, reinforcing the acceptance of the lower declared value for customs duty calculation.

This judgment clarifies the application of valuation principles to re-imported rejected goods and highlights the distinction between first-time imports and re-imports of defective items. The decision underscores the importance of considering the specific circumstances of re-imported goods in determining their assessable value for customs duty purposes.