2015 (12) TMI 855 - AT - Customs

Valuation - Enhancement in value - Import of unbranded goods - Held that - If the value has to be loaded based on the contemporaneous value of the imports of identical/similar goods, one of the relevant facts for consideration is the quantum of imports involved in the transactions and also the nature of goods, in respect of the material particulars. It is a normal trade practice that if the quantity of goods purchased and sold is high/discounts are offered and the price of the transactions will be lower. Similarly, it is also a well-known fact that branded goods fetch a higher price than unbranded goods. In the present case, we observe that the quantum of imports was substantial and the goods were also unbranded. There is no evidence placed by the Revenue while undertaking the assessments for enhancing the value. There is no comparison done at all with respect of the quantum of imports involved in the transactions and whether the goods are branded or not. In the absence of such a comparison, loading cannot be done arbitrarily as the Customs Value Rules do not provide for arbitrary loading of values. In the present case, we notice that the loading done is arbitrary and without any basis. Therefore, such enhancement of value cannot be sustained in law. Accordingly, we set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
1. Appeal against the dismissal of appeal by the lower appellate authority regarding the enhancement of the value of imported toners.
2. Dispute over the loading of value based on contemporaneous imports and lack of details on the quantum of imports.
3. Argument regarding the unbranded nature of the goods and previous acceptance of lower transaction value.
4. Allegation of arbitrary enhancement of value without proper comparison or basis.

Analysis:

1. The appeal in question arose from the Order-in-Appeal passed by the Commissioner of Customs (Appeals), Mumbai, where the appellant, M/s. Buying Overseas, challenged the enhancement of the value of toners imported from US $ 4.25 per Kg to US $ 6.00 per Kg. The lower appellate authority had dismissed the appeal, leading to the appellant approaching the Tribunal.

2. The appellant's counsel argued that the loading of value was based on contemporaneous imports with varying declared values, but no details were available on the quantum of imports. The appellant imported 10.7 MT and 11 MT of goods, which were unbranded. They highlighted a previous instance where a lower transaction value was accepted by the department, emphasizing the lack of basis for the current value enhancement.

3. The Revenue, represented by the Deputy Commissioner, supported the lower authorities' findings. However, the Tribunal noted that loading values based on contemporaneous imports require consideration of the quantity and nature of goods. High quantities often lead to lower prices, and branded goods command higher prices. In this case, the substantial unbranded imports lacked proper comparison for value enhancement, rendering the loading arbitrary and baseless.

4. The Tribunal concluded that the lack of evidence and comparison for value enhancement rendered the decision arbitrary and unsustainable under Customs Value Rules. As a result, the impugned order was set aside, and the appeal was allowed with the possibility of consequential relief in accordance with the law. The judgment emphasized the importance of a reasoned and evidence-based approach in determining customs values to prevent arbitrary actions.