2014 (5) TMI 366 - AT - Customs

Determination of assessable value - Valuation of imported goods Enhancement of selling price - Price in Bill of Entry - What should be the correct value of the imported goods Held that - While determining the price in the case of Tixosil 38AB the adjudicating authority has re-determined the assessable value as Rs. 82,304 - If the calculation sheet produced by assesse is taken the cost comes to Rs. 83,321 which is appropriate considering that the customs duty, local clearance, logistic cost, insurance are to be includible in the cost price of assesses - Therefore, both the lower authorities have erred in determining the assessable at Rs. 82,304/- - In fact, they had to determine what is the cost at the hand of assessee and at which price the goods are being sold by them - Assessees have been able to prove that after importing the goods, they have incurred certain expenses which have been shown by the appellants before the lower authorities as here with documentary evidences - Therefore, those expenses are necessary to arrive at cost price of the impugned goods - Thus, the basis of determining the assessable value on the basis of sale price giving margin of 20% of profit on the sale price is to be ignored when we are having the cost price including the expenses incurred by assesse - Therefore, the declared price is to be accepted - The impugned order is set aside Decided in favour of assesse.

Summary

Issues:
- Enhanced value of imported goods based on selling price
- Consideration of expenses in determining the assessable value

Enhanced value of imported goods based on selling price:
The appellants imported two consignments, Tixosil 38 AB and Wollastonite Nyad 325, declaring values significantly lower than the actual selling prices. The adjudicating authority noted abnormally high selling prices, leading to an enhancement of the goods' value. The Commissioner (Appeals) upheld this decision, prompting the appellants to appeal. The appellants argued that the declared value did not consider all relevant expenses, presenting a breakdown of costs to justify the selling prices. They contended that the profit margins were within acceptable limits based on cost prices. The authorities, however, considered the selling prices exorbitant and justified the profit margins applied.

Consideration of expenses in determining the assessable value:
The Tribunal examined the appellants' cost breakdown and found that the assessable value should align with the actual costs incurred, including customs duty, local clearance, logistics, and insurance. The Tribunal concluded that the lower authorities erred in determining the assessable value based solely on selling prices without considering the expenses borne by the appellants. By accepting the appellants' documented expenses, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of including all relevant costs in determining the assessable value of imported goods.