Home Case Index All Cases Customs Customs + AT Customs - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 109 - AT - CustomsDetermination of valuation of imported goods - related party transaction - differential customs duty - held that - DC (SVB) has finalized the valuation under Rule 2 (2) (i) (ii) ofo CVR and rejected their invoice value and ordered for 39% loading - LAA has held in the impugned order that rejection of the transaction by the adjudicating authority was right and further held that loading of 39% of the invoice value by the adjudicating authority is not correct and the correct loading should be 65.125%. We find the appellant s main contention before LAA is to set aside the loading of 39% ordered by adjudicating authority whereas the LAA before enhancing the percentage of loading from 30% to 65.125% ought to have given an opportunity to the appellant to put for their defence. Further, the appellants have submitted entire records of third party invoice which has not been taken into consideration - If the LAA wants to enhance the penalty, fine or demand any duty such order shall be passed only after the appellant is given notice. In the present case even though there is no demand of customs duty but by enhancing the value of loading from 39% to 65.125% which has extra duty liability on the appellants and the enhancement had direct bearing on the increase of duty. It is mandatory on the LAA to follow principles of natural justice before proposing for enhancement of value from 39% to 65.125% which the LAA has not followed in this case and the case needs to be remanded to LAA. Accordingly, impugned order is set aside and the matter is remanded to Commissioner (Appeals) with a direction to decide the issue on merits after giving sufficient opportunity to the appellant. The appellant is directed to co-operate with the proceedings and produce all the relevant documents before LAA. - Decided in favour of assessee.
Issues:
Valuation of imported goods on related party transaction, determination of differential customs duty, application of Customs Valuation Rules, violation of natural justice in enhancing value without notice. Analysis: The appeal pertains to the valuation of imported goods in a related party transaction and the consequent differential customs duty. The appellant, a subsidiary of a UK company, imported spares for laboratory gas generators. The Special Valuation Branch ordered provisional assessment due to the related party nature of the transaction. The Deputy Commissioner rejected the declared value, ordered enhancement to 39%, and directed finalization of the assessment. The Commissioner (Appeals) upheld the order, increased the loading percentage to 65.125%, and rejected the appeal. During the hearing, the appellant argued against the enhancement, citing lack of notice and awareness of the proposed increase. They contended that the loading percentage was incorrectly calculated and submitted third-party invoices for verification. The appellant's live consignments were affected by the enhanced value, impacting subsequent imports. They requested setting aside the order and remanding the case, referencing relevant case laws. The respondent argued that the enhancement was justified, as no fresh demand was made, and the appellant failed to provide evidence to support their claim. The Commissioner (Appeals) upheld the order, stating the increase was an arithmetical calculation and not a violation of Section 128A. Upon review, the Tribunal found that the appellant was not given a proper opportunity to defend against the increased loading percentage. The failure to consider the submitted third-party invoices and the direct impact of the enhancement on duty liability were noted. The Tribunal emphasized the importance of following principles of natural justice before proposing value enhancements. Consequently, the impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for a fresh decision with proper opportunity for the appellant to present their case. The Commissioner was directed to decide the issue on merit within six months, emphasizing cooperation from the appellant. In conclusion, the Tribunal highlighted the necessity of adherence to natural justice principles in valuation matters involving related party transactions and directed a fair reconsideration of the case by the Commissioner (Appeals).
|