2020 (6) TMI 735 - AT - Customs

Valuation of imported goods - Aluminium Scrap - rejection of declared value - appeals rejected on the ground that the appellant have given a consent letter accepting the enhanced value of the Assessing Authority, therefore, the appellant is not a aggrieved party - HELD THAT - The Assessing Authority reassessed the Bill of Entries by enhancing the value not on the basis of any material evidence which show that the appellant have misdeclared the value even no Contemporaneous Import Data was relied upon. The sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018. Therefore, the Adjudicating Authority has not followed the principle laid down under the Custom Valuation Rules and without application of mind straightway enhanced the value only on the basis of DGOV guildeline. In the present case, no such exercise was carried out, Obviously for the reason that the enhancement of value on the basis of the DGOV guideline. In Absolutely identical case of the appellant themselves this tribunal has allowed the appeal in - M/S SUNLAND METAL RECYCLING INDUSTRIES AND OTHERS VERSUS C.C. -KANDLA 2019 (10) TMI 113 - CESTAT AHMEDABAD . In the said case also the value was enhanced on the basis of same DGOV guideline and the tribunal has categorically rejected such methodology of the valuation and allowed the appeals filed by the appellant by passing detailed order. Thus, the issue of method of enhancement of the valuation is as per the DGOV Circular which has been rejected by this tribunal. The present case is not different from the case on which the above order was passed. The only difference is the period. These imports were made subsequent to the imports made in earlier order dated 01.10.2019 therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind. The issue on which the Learned Commissioner (Appeals) rejected the appeal that once the appellant have accepted the enhancement of the value at the time of reassessment of the Bill of Entry they are not falling under the category of aggrieved person in terms of Section 128 (1) of Customs Act, 1962 - Considering the fact that the appellant had given the consent letter before the assessing authority, the enhancement of the value was rejected. The enhancement of the value is not legal and proper hence, is rejected - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Reassessment of Bill of Entry by enhancing the declared value.
2. Validity of the consent letter provided by the appellant.
3. Application of DGOV guidelines for valuation.
4. Compliance with Customs Valuation Rules.
5. Right to appeal under Section 128(1) of the Customs Act, 1962.

Detailed Analysis:

Reassessment of Bill of Entry by Enhancing the Declared Value:
The appellant imported Aluminium Scrap and declared the price as per the invoice from the foreign supplier. The department reassessed the Bill of Entry by enhancing the declared value based on DGOV guidelines. The appellant challenged this reassessment, arguing that the enhancement was not based on any material evidence or contemporaneous import data. The tribunal found that the reassessment was solely based on DGOV guidelines without following the Customs Valuation Rules, which require a sequential application of rules and evidence-based enhancement. The tribunal cited a previous order (A/11871-11874/2019 dated 01.10.2019) where similar methodology was rejected.

Validity of the Consent Letter Provided by the Appellant:
The appellant had provided a consent letter dated 25.04.2019 to avoid delays in the clearance of goods. The Commissioner (Appeals) rejected the appellant's appeal on the ground that the appellant was not an aggrieved party due to this consent letter. However, the tribunal, referencing the Supreme Court judgment in CENTURY METAL RECYCLING PVT. LTD. vs UNION OF INDIA, clarified that a consent letter does not absolve the assessing authority from following proper valuation principles. The tribunal held that the assessment must comply with the Customs Valuation Rules irrespective of the consent letter.

Application of DGOV Guidelines for Valuation:
The enhancement of the value was based on DGOV guidelines, which prescribed using the LME price of Aluminium Prime Metal minus a specified discount. The tribunal noted that DGOV guidelines are not above the statute and should not replace the Customs Valuation Rules. The tribunal reiterated its previous stance that valuation based solely on DGOV guidelines is incorrect and arbitrary.

Compliance with Customs Valuation Rules:
The tribunal emphasized the necessity of following the Customs Valuation Rules, which require a sequential rejection of the declared value and application of rules based on evidence. The reassessment in this case did not follow these principles, making the enhancement of value unsustainable. The tribunal cited several judgments, including those from the Supreme Court, supporting the need for evidence-based valuation and rejecting arbitrary enhancements.

Right to Appeal under Section 128(1) of the Customs Act, 1962:
The tribunal addressed the issue of whether the appellant had the right to appeal under Section 128(1) of the Customs Act, 1962. It concluded that the appellant is indeed an aggrieved party and has the right to appeal, despite having provided a consent letter. The tribunal's decision was based on the principle that statutory rights to appeal cannot be negated by procedural consent given under duress or to avoid delays.

Conclusion:
The tribunal set aside the impugned orders, allowing the appeals with consequential reliefs. The reassessment of the Bill of Entry by enhancing the declared value was found to be incorrect, arbitrary, and not in compliance with the Customs Valuation Rules. The tribunal reiterated that DGOV guidelines cannot override statutory provisions and emphasized the appellant's right to appeal despite the consent letter.