2015 (11) TMI 1151 - AT - Customs

Valuation - determination of transaction value - related person - Held that - when import of identical cars have been made at lower values which are comparable to the value declared at the time of filing Bill of Entry for sale of the cars imported under Carnet, there is no justification to take the higher value mentioned in the Carnet. The appellant gave specific Bills of Entry Nos. 543752, 544155, 510318 under which contemporaneous imports were made. Even though the contemporaneous imports were assessed to duty on provisional basis as the valuation of the cars was being examined by Special Valuation Branch (SVB), Mumbai, the lower authorities ignored this aspect and did not allow the provisional assessment on similar basis in the case of the cars imported under Carnet. In any case it is shown by the Ld. Advocate that the SVB order did not establish that the value between appellant and their Principal had influenced the price and had consequently accepted the declared prices. Therefore, we find no reason to differentiate between the cars imported under Carnet and the cars imported otherwise. - Valuation under Section 14 clearly provides that the value shall be the transaction value where the buyer and seller are not related. In the present case even though buyer and seller are related it is established by the SVB order that the price has not influenced the relationship. Therefore, the transaction value cannot be rejected - Decided in favour of assessee.

Summary

Issues: Valuation of imported cars under ATA Carnet for duty assessment.

In this case, the appellant imported three cars under an ATA Carnet for exhibition at an Auto Expo. After the exhibition, they obtained permission to sell the cars from the government. The value declared on the Bills of Entry for these cars was lower than the value on the Carnet document. The adjudicating authority calculated the assessable value by adding Carnet price, insurance, freight, and landing charges. The appellant argued that since their case was under investigation by the Special Valuation Branch (SVB) Mumbai for other imported cars, provisional clearance should have been allowed with a 1% revenue deposit. However, their plea was rejected by the Commissioner (Appeals), who upheld the adjudicating authority's decision. The appellant contended that the values declared in the Bills of Entry for the cars imported under Carnet were comparable to values in regular imports of the same models around the same time. The SVB order in the appellant's case confirmed that the relationship between the importer and their principal did not influence the price, and the declared prices were accepted.

The main issue was the valuation of the imported cars for duty assessment. The appellant argued that the value declared in the Carnet was the commercial value in the country of issue, which was Germany. They pointed out that the values declared in the Bills of Entry for the Carnet-imported cars were similar to values in regular imports of the same models. The appellant emphasized that the SVB order confirmed that the relationship between the importer and their principal did not affect the price, supporting the acceptance of declared prices. The Revenue insisted on accepting the value declared in the Carnet for duty assessment, but the Tribunal found no justification for this approach. The Tribunal noted that the Carnet value did not constitute the assessable value under Section 14 of the Customs Act, as it was the commercial value in the country of issue. Additionally, the Tribunal highlighted Rule 8(2)(iii) of the Valuation Rules, which prohibits determining value based on domestic market prices. Therefore, the Tribunal set aside the impugned order and allowed the appeal.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the value declared in the Carnet did not represent the assessable value for duty assessment. The Tribunal considered the commercial value in the country of issue as the relevant valuation, especially when comparable values were declared in regular imports of the same models. The Tribunal also highlighted the importance of the SVB order, which confirmed that the relationship between the importer and their principal did not influence the price. The Tribunal's decision was based on the valuation rules and principles under the Customs Act, ultimately setting aside the previous order and allowing the appeal.