2018 (5) TMI 2014 - AT - Customs

Valuation of imported goods - Fabric - rejection of declared value on the Bill of Entry - enhancement of the value - Rule 9 of the Customs Valuation (Determination of value on Imported Goods) Rules, 2007 - HELD THAT - The transaction value is the basis for assessment unless proved to be wrong or affected by extraneous considerations. The Revenue has not rejected the transaction value first. The Appellate Authority has referred to precedent decisions holding to that effect. As such, the Commissioner (Appeals) is fully agreed upon that in the absence of rejection of the transaction value, Revenue cannot proceed ahead to redetermine the value in terms of the subsequent rules of Customs Valuation Rules. No infirmity is found in the impugned order of the Appellate Authority, requiring any interference. Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Appeal against the order of Commissioner (Appeals) setting aside the enhancement of the value of imported fabric under Rule 9 of the Customs Valuation Rules, 2007.

Analysis:

Issue 1: Enhancement of Value of Imported Fabric
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) setting aside the enhancement of the value of imported fabric. The assessing officer had re-determined the value under Rule 9 of the Customs Valuation Rules, 2007, after rejecting the declared value on the Bill of Entry. The Commissioner (Appeals) observed that there was no evidence to show that the transaction value was incorrect. Referring to various decisions, including the Supreme Court case of Eicher Tractor Ltd., it was held that unless the price paid falls within the exceptions provided under Rule 4(2), Customs Authorities must assess duty based on the declared transaction value. Since the circumstances did not fall under Rule 4(2) exceptions in this case, the assessment had to be done on the transaction value.

Issue 2: Determination of Value
The Revenue contended that the value could not be determined under Sub-rule 1 of Rule 3 due to the absence of product specifications. They argued that comparable goods with necessary specifications were not considered by the Commissioner (Appeals) and relied on the Supreme Court decision in the case of M/s Padia Sales Corporation, stating that the prevailing international market price should be used for valuation. However, the Tribunal found that the transaction value is the basis for assessment unless proven incorrect or influenced by external factors. Since the Revenue did not reject the transaction value initially, they could not proceed to redetermine the value under subsequent Customs Valuation Rules. The Tribunal agreed with the Commissioner (Appeals) that in the absence of rejection of the transaction value, there was no basis for the Revenue to reassess the value. Consequently, the Revenue's appeal was dismissed, and the Stay Petition was disposed of.

This judgment clarifies the importance of transaction value in customs valuation, emphasizing that unless the declared value is proven incorrect or affected by exceptions, it should be the basis for assessment. The decision highlights the need for Customs Authorities to adhere to established rules and precedents when determining the value of imported goods, ensuring fairness and consistency in valuation practices.