1999 (3) TMI 664 - AT - Customs

Summary

Issues Involved:
1. Rejection of the declared value of imported goods.
2. Enhancement of the value of imported goods without evidence.
3. Failure to disclose evidence to the importers.
4. Reliance on quotations or offers for sale to determine value.
5. Violation of principles of natural justice.
6. Acceptance of transaction value under Customs Valuation Rules, 1988.

Issue-wise Detailed Analysis:

1. Rejection of the declared value of imported goods:
The importers declared the value of Mulberry Raw Silk based on original invoices and contracts. The original authority rejected these declared values without providing any reasons and arbitrarily enhanced the value. The importers paid the enhanced value under protest and appealed to the Collector (Appeals), who set aside the original order and remanded the matter, directing the original authority to furnish all materials relied upon for enhancing the value.

2. Enhancement of the value of imported goods without evidence:
The Assistant Collector, upon remand, reiterated the same findings without discussing the points raised by the importers or considering the abundant documents and records. The original authority failed to furnish any material evidence required by the Commissioner (Appeals)'s order of remand. The enhancement was based on an undisclosed investigation and an order form from M/s. Jayanand (International) Bombay, which was not sufficient evidence to discharge the onus.

3. Failure to disclose evidence to the importers:
Despite the remand order, the department did not disclose any evidence for the enhancement of the transaction value. The Commissioner (Appeals) found that the lower authority did not possess any valid documents to substantiate the enhancement, making the enhancement arbitrary in nature. The importers had produced invoices and other documents supporting their declared value, which the lower authority failed to consider.

4. Reliance on quotations or offers for sale to determine value:
The original authority relied on an order form from M/s. Jayanand (International) Bombay, which was merely a quotation and not a transaction. The Commissioner (Appeals) noted that the order form could not be construed as a transaction, and the value indicated in the offer could not be treated as the transaction value under Valuation Rules, 1988. The lower authority's reliance on the order form was misleading and irrelevant to the present dispute.

5. Violation of principles of natural justice:
The department's failure to disclose evidence and the arbitrary enhancement of the value without valid documents constituted a violation of the principles of natural justice. The importers were not provided with the basis for the enhancement, and the department did not produce evidence of contemporaneous imports at higher prices.

6. Acceptance of transaction value under Customs Valuation Rules, 1988:
The Commissioner (Appeals) upheld the importers' contention that the declared value should be accepted in the absence of evidence to the contrary. The Commissioner relied on several case laws, including judgments from the Hon'ble Supreme Court, which established that the burden to prove under-valuation is on the department. The department must produce evidence of contemporaneous imports at higher prices to dispute the declared value. The Commissioner concluded that the invoice values produced by the importers should be accepted for assessment purposes, setting aside the lower authority's orders.

Conclusion:
The Tribunal found no infirmity or illegality in the Commissioner (Appeals)'s detailed and considered order. The department's grounds for appeal were based on misconceived and unsustainable arguments, lacking any supporting evidence. The Tribunal rejected the Revenue's appeals, affirming the acceptance of the transaction value declared by the importers. The order emphasized that mere quotations or offers for sale could not be the basis for enhancing the value, and the principles of natural justice must be upheld.