2014 (10) TMI 753 - AT - Customs

Valuation of goods - Undervaluation of goods - Determination of transaction value - Held that - As per the Public Notice, all the importers are required to furnish the details like nature, type, quality, grade of constituent materials used for the frame, filling and upholstery of the furniture. Moreover, size, capacity, brand, model or article number is also required to be furnished. The weight of the item in kilograms irrespective of the unit quantity code and the Maximum Retail Price is also required to be declared by the importers to determine the value on the basis of contemporaneous import/similar or comparable goods is to be seen in receipt of the declaration made by the importers on the basis of consequent material only. More over furniture is an item which in normal course is sold and bought in the market on the basis of real price. We further find that particularly furniture with material filling and upholstery cannot be comparable with details of descriptions on the same with the comparable goods. Further size, capacity, brand, model are also required to be considered at the time of valuation of the goods. As both the lower authorities have failed to exercise in the absence of any similar or comparable goods available, the rejection of the transfer value is not correct. We further find that it is not the case of the department that transaction value declared by the appellant is not genuine. Accordingly, the rejection of transaction value is set aside - Decided in favour of assessee.

Summary

Issues:
1. Re-determination of declared transaction value to the value of goods which are commercially interchangeable.
2. Comparison of imported goods by the appellant with goods imported by another entity.
3. Interpretation of Customs (Valuation) Rules, 2007 regarding determination of transaction value.
4. Consideration of Public Notice requirements for importers in determining value.
5. Assessment of comparability of goods for valuation purposes.

Analysis:
1. The appellants contested the re-determination of the value of imported furniture based on goods imported by another entity. The Commissioner (Appeals) considered the submissions and held that the value should be re-determined on commercially interchangeable goods. The appellants argued that the transaction value cannot be rejected based on goods imported by the other entity as they are not comparable. They emphasized compliance with Public Notice requirements and the need for detailed comparisons to determine value accurately.

2. The Addl. Commissioner (A.R.) countered the appellants' arguments, citing Customs (Valuation) Rules, 2007, which define similar goods as those with like characteristics and component materials enabling them to perform the same functions. The Addl. Commissioner argued that goods like sofa and table can be compared, supporting the rejection of the transaction value based on weight proportionality between the imported goods of the appellant and the other entity.

3. The Tribunal analyzed the submissions and Public Notice requirements for importers, emphasizing the need for detailed information on the nature, quality, and characteristics of imported goods for accurate valuation. It was noted that furniture is typically sold based on design, size, and material, making detailed comparisons crucial for determining comparable goods. The Tribunal found that the lower authorities failed to identify similar or comparable goods, leading to the rejection of the transaction value being deemed incorrect.

4. Ultimately, the Tribunal set aside the impugned order, allowing the appeals with consequential relief. The Tribunal concluded that the transaction value declared by the appellants was acceptable, as there was no evidence to suggest that it was not genuine. The decision highlighted the importance of accurate valuation based on detailed comparisons of goods to ensure fairness in the assessment process.