2014 (11) TMI 164 - AT - Customs

Valuation of goods - enhancement of the value of the goods is primarily done on the ground of mis-declaration in the Bills of Entry and consequently based upon the market inquiry - Held that - Careful reading of the offer, acceptance of the ultimate sales, lead us to come to a conclusion that offer is for limited period and that the same was for the stock lot of goods of various sizes and various models. There is nothing in the said document to show that the goods were of prime quality goods or were of latest models. On the contrary, we find that the appellant had declared the correct quantity, the correct size and the correct brand in the bill of entry. The value of the stock lot goods has to be done on a contract basis entered into between the supplier and the importer - there is no mis-declaration of goods. Rejection of transaction value - Held that - Mere doubt, without any reason or rhyme cannot be made the basis for rejection of the transaction value, without any reasonable and justifiable evidence. This has been the subject matter of various decisions of the Tribunal as also of various High Courts. One such reference can be made to Radhey Shyam Ratanlal V/s. Commissioner of Customs Raigadh 2005 (7) TMI 196 - CESTAT, NEW DELHI . It stands held in the said decision that doubt of the proper officer about transanction value are irrelevant, which has to be accepted in terms of provisions of Section 14 of the Customs Act, 1962 unless exceptions under erstwhile valuation Rule 4(2) of the valuation rules are applicable-Reliance was again placed on Supreme Courts decision in the case of Eicher Tractors 2000 (11) TMI 139 - SUPREME COURT OF INDIA . Goods were stock lot goods of various models and were offered for sale on as is whereas basis and subject to the conditions that the importer books up the entire goods within the stipulated period up to December, 2010. Further on being queried by the AC, the appellant clearly wrote back that as the goods are of various models and various brands and were manufactured in various countries in terms of the agreement between the brand name owners, it is not possible to give the brands, country of original, the model numbers etc. of each and every LCD TVs. In such a scenario, reliance by the Commissioner (Appeals) on the provisions of Explanation (1) (iii) (d and e) of Rule 3(2) of the Customs Valuation Rules is not proper. The said provisions of law are invokable only when the proper officer has some doubt on the truth or accuracy of the value based on certain reason which may include the mis--declaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production. As already observed by us, the goods being stock lot, it was neither possible nor practical for the importer to declare the country of origin or year of manufacture of each and every piece. This non possibility already stand intimated to the AC, even prior to the import of goods. Otherwise there is no mis-declaration in respect of description, quantity or brand of goods - Decided in favour of assessee.

Issues Involved:
1. Enhancement of assessable value.
2. Imposition of redemption fine and penalty.
3. Alleged mis-declaration of goods.
4. Validity of transaction value under Customs Valuation Rules.

Issue-wise Detailed Analysis:

1. Enhancement of Assessable Value:
The appellate authority confirmed the enhancement of assessable value done in the bill of entry, which was contested by the appellant. The enhancement was based on market inquiries, Sony dealers' inquiries, and NIDB data. The Commissioner (Appeals) found that the declared value was lower than the market value, leading to the enhancement.

2. Imposition of Redemption Fine and Penalty:
The original adjudicating authority imposed redemption fine and penalty along with the enhanced assessable value. The appellant challenged this imposition, arguing that the transaction was for a stock lot of various models and sizes of LCD TVs, sold on an "as is, where is" basis, and thus the declared value was accurate.

3. Alleged Mis-declaration of Goods:
The Revenue alleged mis-declaration due to the appellant not specifying the brand, size, and model numbers of the imported LCD TVs. The Commissioner (Appeals) supported this view, stating that the appellant's failure to provide detailed information indicated a mis-declaration and malafide intention.

4. Validity of Transaction Value under Customs Valuation Rules:
The Commissioner (Appeals) referred to Section 14 of the Customs Act, 1962, and Rule 3(2) of the Customs Valuation Rules, which allow for the rejection of transaction value if there are doubts about its accuracy. The Commissioner concluded that the transaction value could be rejected based on the evidence collected, including market inquiries and NIDB data.

Judgment Analysis:

Enhancement of Assessable Value:
The Tribunal found that the enhancement of value was based on assumptions without concrete evidence. The appellant had provided all relevant details, including the nature of the stock lot and the terms of the sale. The Tribunal emphasized that the transaction value should be accepted unless there is strong evidence to prove otherwise, as held in the Supreme Court's decision in Eicher Tractors Ltd. vs. CCE Mumbai.

Imposition of Redemption Fine and Penalty:
The Tribunal noted that the imposition of redemption fine and penalty was unjustified as the transaction was legitimate and the declared value was accurate. The Tribunal set aside the orders imposing redemption fine and penalty, providing relief to the appellant.

Alleged Mis-declaration of Goods:
The Tribunal observed that the appellant had declared the correct quantity, size, and brand of the goods. The terms of the sale contract indicated that the goods were a stock lot of assorted models, making it impractical to provide detailed model numbers or country of origin for each piece. The Tribunal found no evidence of mis-declaration or malafide intention.

Validity of Transaction Value under Customs Valuation Rules:
The Tribunal held that the transaction value should be accepted unless there is substantial evidence to reject it. Mere doubts or assumptions are insufficient to reject the transaction value. The Tribunal cited various decisions, including Radhey Shyam Ratanlal vs. Commissioner of Customs Raigadh and Commissioner of Customs vs. Bureau Veritas, to support this view.

Conclusion:
The Tribunal set aside the orders of the Commissioner (Appeals), allowing the appeals of the assessee and rejecting the Revenue's appeal. The Tribunal concluded that the enhancement of assessable value, imposition of redemption fine and penalty, and allegations of mis-declaration were not justified based on the evidence presented. The transaction value declared by the appellant was found to be accurate and should be accepted.

Disposition:
All three appeals were disposed of in favor of the assessee, with consequential relief granted. The Revenue's appeal was rejected.

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