2016 (1) TMI 191 - AT - Customs

Valuation of goods - Rejection of loading in value of Cloves imported, said to be of Brazil Origin, from US 1475 PMT to US 3100 PMT - Held that - As per A.O., a Certificate of Origin has been produced which is signed by the Singapore India Chamber of Commerce. Although, this certificate is not available with either side, we find from the records that the authenticity of the certificate has not been verified or challenged by the department. Therefore, we find no reason to doubt this certificate. We also see that although the adjudicating authority appears to doubt the certificate, at the same time he says that import of identical and similar goods of Brazil Origin were not noticed. In such circumstances the obvious logical step to take is to see the prices of contemporaneous imports from Madagaskar/Sri Lankan Origin whose prices are published in the Public Ledger . Instead, he straightaway proceeds to Rule 8 of the Customs Valuation Rules. In our view, he has not proceeded through the Rules sequentially and properly as per law. The Commissioner has stated that evidence of importation available in the Directorate of Valuation show a much lower price. In the grounds of appeal, this fact has not been challenged by the department. The department should have first discarded evidence of contemporaneous imports. - no enquiries were made as to the origin of the goods. It is a fact that the prices of agricultural produce can vary significantly due to various factors such as quality, size and country of origin. Such factors have not been considered by the adjudicating authority. In our view, the adjudicating authority has not been able to establish undervaluation in the present case. - Decided against Revenue.

Summary

Issues: Challenge to Order-in-Appeal regarding loading in value of imported Cloves from Brazil Origin.

Analysis:

Issue 1: Certificate of Origin and Valuation Rules
The Department challenged the Order-in-Appeal that rejected loading in value of Cloves imported from Brazil Origin. The adjudication Order highlighted discrepancies in the Certificate of Origin and the absence of approval by the Chamber of Commerce of Brazil. The Commissioner (Appeals) set aside the order, emphasizing the lack of evidence of importation of similar goods from Brazil. The Tribunal noted the authenticity of the Certificate of Origin signed by the Singapore India Chamber of Commerce, which the Department did not challenge. It criticized the adjudicating authority for not following valuation rules sequentially and not considering contemporaneous imports from other origins. The Tribunal found no basis to doubt the Certificate of Origin and criticized the Department for not challenging the evidence of lower prices from the Directorate of Valuation.

Issue 2: Comparison with Contemporaneous Imports
The Department relied on legal precedents to support using LME prices and catalogue prices for valuation. However, the Tribunal found the present case distinguishable as no comparison was made with prevailing market prices or contemporaneous imports. It cited judgments emphasizing the need for referencing contemporaneous imports and criticized the lack of enquiries into the origin of the goods. The Tribunal concluded that the adjudicating authority failed to establish undervaluation, highlighting the significant price variations in agricultural produce based on factors like quality and origin.

Conclusion
The Tribunal dismissed the appeal, emphasizing the need for proper adherence to valuation rules, consideration of contemporaneous imports, and thorough investigations into the origin and factors affecting the prices of imported goods. The judgment underscores the importance of following legal precedents and sequential valuation procedures to ensure accurate determination of assessable value in customs cases.