2019 (4) TMI 1865 - AT - Customs

Valuation of imported goods - Aluminum Scrap Talk - enhancement of declared value based on NIDB data - Rule 9 of the Customs Valuation (Determination of Value of imported goods) Rules 2007 - HELD THAT - For enhancing the value of the imported goods Revenue is under an obligation to first reject the transaction value by production of evidences to the contrary. The said issue was considered by the Tribunal in the case of M/S SANJIVANI NON FERROUS TRADING PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX NOIDA 2017 (3) TMI 359 - CESTAT ALLAHABAD which stands upheld by the Hon ble Supreme Court when the appeal filed by the Commissioner was rejected - There is no evidence produced by the Revenue rejecting the transaction value. Otherwise also the NIDB data has been held as non-reliable for the purpose of enhancement of value of imported goods by various decisions. The Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX NOIDA VERSUS M/S SANJIVANI NON FERROUS TRADING PVT LTD 2018 (12) TMI 738 - SUPREME COURT held that unless the value declared by the appellant is not rejected by the Revenue the same cannot be enhanced in terms of the Section 14 of the Customs Act 1962. The enhancement of the value of the goods is unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Enhancement of value of imported goods based on Rule 9 of the Customs Valuation Rules, 2007.
- Obligation of Revenue to reject transaction value before enhancing the declared value.
- Reliability of NIDB data for enhancing the value of imported goods.

Analysis:
The judgment by the Appellate Tribunal CESTAT ALLAHABAD dealt with the issue of enhancing the value of imported Aluminum Scrap 'Talk' by the Revenue authorities. The appellant had declared a value of USD 2250 CIF PMT, which was increased to USD 3400 CIF PMT by the Lower Authorities using Rule 9 of the Customs Valuation Rules, 2007. The Commissioner (Appeals) upheld this enhancement, stating that the appellant failed to justify the declared value compared to prevailing prices. However, the Tribunal noted that for enhancing the value of imported goods, the Revenue must first reject the transaction value with evidence to the contrary. This principle was established in a previous case involving Sanjivani Non-Ferrous Trading Pvt. Ltd., where the Hon'ble Supreme Court held that the declared value cannot be enhanced unless rejected by the Revenue.

The Tribunal highlighted that there was no evidence presented by the Revenue rejecting the transaction value in the current case. Additionally, the reliance on NIDB data for enhancing the value of imported goods was deemed unreliable based on previous decisions. Therefore, the Tribunal found the enhancement of value to be unsustainable and set it aside. Consequently, all appeals were allowed, providing consequential relief to the appellant. The judgment underscores the importance of adhering to legal principles and evidentiary requirements when determining the value of imported goods to prevent arbitrary enhancements without proper justification.