2014 (2) TMI 627 - AT - Customs

Valuation of goods - undervaluation of the goods - Determination of correct value of the PU belts with buckles of Chinese origin - Held that - As per the appellant, the supplier of the goods is the manufacturer of the same and the value declared by them in the Bill of Entry is the same value which is reflected in the invoice raised by the foreign supplier. The Revenue has not advanced any evidence to show that the said declared value is not correct value. In terms of the provision of 3 of the Customs Valuation Rules, 2007, the value of the imported goods shall be the transaction value and the same is required to be accepted unless there are strong reasons to reject the same. Revenue has not produced any evidence to show that there was any additional consideration flowing back from the appellant to the foreign supplier, in which case the Revenue is bound to accept the declared transaction value. Apart from that we note that the attention of the lower authorities was drawn to the fact of another import made by the appellant at Tuglagabad wherein the value of the identical goods declared by them @ US 1.50 per dozen were accepted and there is no appeal of the Revenue against the said assessment order. If that be so, we really fail to understand as to why the said imports at Tuglagabad, which is in respect of the same very goods and from the same supplier, would not constitute contemporaneous import so as to adopt the same for the purposes of assessment. There is nothing in the said market enquiry to reveal that the belts purchased by the officers were of the same type, which stands imported by the appellant except the fact that the brand name was Tuff Line . Further, the same would reflect the retail sale price in India and would have no bearing on the wholesale price of the manufacturer - in the absence of any evidence on record to reflect upon the undervaluation of the goods, we set aside the impugned order - Decided in favour of assessee.

Issues:
1. Correctness of the declared value of imported goods.
2. Rejection of declared value by Revenue.
3. Allegation of undervaluation by the authorities.
4. Contemporaneous value of imported goods.
5. Relevance of NIDB data and market enquiries in determining value.

Issue 1: Correctness of the declared value of imported goods:
The appellant filed a Bill of Entry for clearance of Chinese PU Belts with buckles, declaring a value of US$ 1.5 per dozen. The Commissioner doubted the correctness of the declared value, leading to a 100% examination. The appellant argued that the declared value was the transaction value from the manufacturer, supported by contemporaneous imports at the same value. The Tribunal emphasized that unless there are strong reasons to reject the transaction value, it should be accepted as the correct assessable value.

Issue 2: Rejection of declared value by Revenue:
The Revenue rejected the declared value based on internet research showing similar belts priced higher, NIDB data, and market enquiries. The appellant contended that the declared value was genuine, and no additional consideration was involved. The Tribunal noted that the Revenue failed to prove any additional consideration, and the contemporaneous import at a similar value supported the appellant's claim.

Issue 3: Allegation of undervaluation by the authorities:
The original adjudicating authority enhanced the value of the goods, which was upheld by the Commissioner (Appeals). However, the Tribunal found that the authorities did not provide concrete evidence to support the undervaluation allegation. The Tribunal highlighted the need for strong reasons to reject the transaction value, as per Customs Valuation Rules.

Issue 4: Contemporaneous value of imported goods:
The Tribunal considered the contemporaneous import of identical goods by the appellant at a similar value as a crucial factor. It questioned why the authorities did not accept the value of the goods imported at a different location from the same supplier. The Tribunal emphasized the importance of contemporaneous imports in determining the correct assessable value.

Issue 5: Relevance of NIDB data and market enquiries in determining value:
The Revenue relied on NIDB data and market enquiries to challenge the declared value. However, the Tribunal found these references inadequate as they lacked detailed information on the goods and did not consider the differences between PU belts and genuine leather belts. The Tribunal emphasized that NIDB data alone cannot justify value enhancement and rejected the market enquiries as inconclusive for determining wholesale prices.

In conclusion, the Tribunal set aside the order of value enhancement, ruling in favor of the appellant due to the lack of evidence supporting undervaluation. The judgment underscored the significance of transaction value, contemporaneous imports, and the necessity for concrete proof to reject declared values under the Customs Valuation Rules.

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