2014 (5) TMI 866 - AT - Customs

Valuation of goods - Determination of transactional value - Enhancement in value - Demand of differential duty - Held that - The enhancement of the value has been done under Rule 5 of the Customs Valuation Rules, 1988. As per the said Rule, if more than one value is found, then the lowest of the such value shall be used to determine the value of the imported goods. In the present case as pointed out by the ld. Counsel, the department has assessed identical goods at lower values ranging from US 1070 to US 1090 PMT, whereas the value declared by the appellant is higher at US 1100 PMT. Further, the price adopted for comparison is not a declared value but an enhanced value by the Customs. The values declared in those transactions ranged from US 1050 to US 1090 PMT. In the case laws cited by the appellant, this Tribunal has already held that for the purpose of comparison of contemporaneous imports, the value to be adopted is not the value arrived at after loading by the department but the value that has been declared and accepted without any enhancement. Besides, we notice that no evidence has been led by the Revenue in the instant case to counter the appellant s contention that the transaction value declared by them, as evident from the documents is not the real transaction value. Transactional value declared by assessee accepted - Decided in favour of assessee.

Summary

Issues:
- Assessment of imported goods based on declared value versus enhanced value
- Application of Customs Valuation Rules, 1988 for determining the value of imported goods
- Comparison of contemporaneous imports and the relevance of declared values

Analysis:
1. Assessment based on declared value vs. enhanced value:
The appellant imported Beta Naphtol and declared a unit price of US $1100 PMT, which was later enhanced by the assessing officer to US $1225 PMT based on contemporaneous imports. The appellant contested this enhancement, arguing that their declared value was higher than the values noticed in the other imports. The lower appellate authority confirmed the enhanced value, leading to a differential duty demand. The appellant's appeal challenged this decision.

2. Application of Customs Valuation Rules, 1988:
The Tribunal examined the Customs Valuation Rules, specifically Rule 5, which states that the lowest value among contemporaneous imports should be used to determine the value of imported goods. The appellant pointed out that similar goods in other imports were assessed at lower values ranging from US $1070 to US $1090 PMT, making their declared value of US $1100 PMT higher. The Tribunal emphasized that for comparison, the declared value should be considered, not the enhanced value by the Customs.

3. Comparison of contemporaneous imports and declared values:
The appellant relied on previous Tribunal decisions stating that for comparing contemporaneous imports, the declared value should be used, not the enhanced value. They argued that the transaction value of US $1100 PMT was supported by documents like sales confirmation and letter of credit, with no evidence presented by the Revenue to refute this. The Tribunal agreed that the declared value of US $1100 PMT should be accepted as the transaction value, rendering the lower authorities' value enhancement unsustainable.

In conclusion, the Tribunal allowed the appeal, emphasizing that the appellant's declared value should be accepted as the transaction value, rejecting the value enhancement by the lower authorities. The decision was based on the application of Customs Valuation Rules and the importance of considering declared values for comparison in cases of contemporaneous imports.