2021 (9) TMI 1338 - HC - Customs

Valuation of imported goods - evidence to show that transaction value was wrong, present or not - misdeclaration of quantity/ Thickness as well as value of imported goods - statement recorded under Section 108 of the Customs Act, 1962 is justified/ legal or not - HELD THAT - Perusal of the order of the Tribunal and the order in original reveal that at one stage revenue sought enhancement of value of goods citing earlier transaction performed by the assessee at a higher value of 300 dollars per CBM. The present transaction was valued at 200 dollars per CBM - the discrepancy was explained by the assessee on the basis of urgent clearance in the earlier transaction. Undisputedly, other than the mere discrepancy noted by Revenue Authority, there does not exit any material as may warrant rejection of valuation of goods. Merely because there exists an alert circular and enabling power under Rule 12 of the Valuation Rules as may allow the Revenue Authority to disbelieve the valuation in a given set of circumstances, it cannot be cited as a matter of fact to disbelieve the valuation. Disbelieving the valuation would have serious consequence. The initial burden rests on the revenue. In absence of any material or evidence as may suggest any perversity in the order of the Tribunal, there are no merit in the appeal - appeal dismissed.

Summary

Issues: Valuation of imported goods under Central Excise Act, 1944.

Analysis:
The High Court heard an appeal filed by the Revenue under Section 35G of the Central Excise Act, 1944 against an order passed by the Custom Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad. The appeal raised a question of law regarding the justification of the CESTAT order, which stated that the Revenue had not attacked the transaction value and failed to produce evidence to prove any wrongdoing in the valuation of imported goods. The Tribunal and the original order revealed that the Revenue sought to enhance the value of goods based on a previous transaction at a higher value, while the present transaction was valued lower. The assessee explained the discrepancy by citing urgent clearance in the earlier transaction. The High Court noted that apart from the noted discrepancy, there was no material to reject the valuation of goods. It emphasized that the mere existence of an alert circular and the power under Rule 12 of the Valuation Rules for the Revenue Authority to disbelieve the valuation was not sufficient to reject the valuation. The Court highlighted that disbelieving the valuation could have serious consequences and that the initial burden rested on the revenue to provide evidence. Since there was no material or evidence suggesting any perversity in the Tribunal's order, the appeal was dismissed.