2018 (5) TMI 1917 - AT - Customs

Valuation of imported goods - slack wax and residue - rejection of declared value - HELD THAT - It appears that the quantities of the slack wax and residue wax is based on the oil contents itself. The oil contained 20%-40%, which is helpful in determination of the price of the wax. The price of oil in international market is not established. This aspect was not examined before rejecting the valuation declared by the appellants. In respect of other cases, no prices were disturbed and declared value was accepted by the Department. In the instant case, no comparable quantities have been made out and proper discretions have not been made before rejecting the transaction value - The Hon ble Supreme Court in the case of J. Yashoda v. K. Shobha Rani 2007 (4) TMI 11 - SUPREME COURT , observed that for rejection of value, substantial evidences must be in hand. But the Department is lacking the same in the instant case. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to valuation of imported goods by the Customs Department based on rejected declared value.

Analysis:
The appellants had imported slack wax and residue from UAE and Iran during 2008-2012, but the declared value was rejected by the Customs Department. The Department enhanced the value, leading to the filing of appeals by the appellants against the Orders-in-Original passed by the Commissioner of Customs (Appeals), Kolkata.

During the hearing, the appellants argued that the rejection of value lacked a comparison of goods, pointing out that around 10,000 importers had brought in the same items without facing similar rejections. They contended that the Department's rejection lacked substantial grounds and was not based on a proper examination of the facts.

On the other hand, the Revenue Department justified its decision. However, upon reviewing the records and hearing both sides, it was observed that the valuation of slack wax and residue wax was primarily based on the oil content, which ranged from 20% to 40%. The international market price of oil, a key factor in determining wax prices, was not considered before rejecting the appellants' declared value.

The Tribunal noted that in other cases, where no comparable quantities were established, the declared values were accepted by the Department. The rejection of the transaction value in this case lacked proper discretion and evidence. Referring to a Supreme Court case, the Tribunal emphasized that substantial evidence is essential for rejecting a declared value, which was found lacking in the present case.

Considering the facts and circumstances, the Tribunal concluded that there was no valid reason to uphold the impugned orders. Therefore, the orders were set aside, and all appeals were allowed in favor of the appellants.

In summary, the Tribunal found that the rejection of the declared value lacked proper examination and substantial evidence, leading to the setting aside of the Customs Department's orders. The decision highlighted the importance of evidence and proper discretion in challenging imported goods' valuation.