2008 (2) TMI 228 - AT - Customs

Since the only basis for rejecting the transaction value is the noticing of contemporaneous imports at higher prices the transaction value was required to be accepted and we therefore set aside the impugned order of rejection of transaction value and loading of value - transaction price can be rejected only if the exceptional circumstances stipulated in Rule 4(2) of the Valuation Rules are found to be attracted

Summary

Issues:
Customs Valuation - Rejection of transaction value based on contemporaneous imports at higher prices.

Analysis:
The appellants filed a bill of entry for clearance of pumice stone imported from Turkey at a declared unit price of US$ 105 per MT (CIF). The Deputy Commissioner rejected the transaction value and determined the value of the goods as US$ 152 per MT under Customs Valuation Rules. The Commissioner (Appeals) upheld this decision, leading to the appeal by the importers.

The Tribunal found merit in the applicants' submission that the transaction price can only be rejected under exceptional circumstances per Rule 4(2) of the Valuation Rules, citing the Eicher Tractors Ltd. case. The rejection of the transaction value in this case was based on the claim that the sale was not under fully competitive conditions, as other importers were importing the same goods from the same country at higher prices around the same time. However, the Tribunal held, in line with previous judgments, that rejecting the transaction value solely on the basis of contemporaneous imports at higher prices is not legally permissible.

Referring to the cases of Mark Auto Industries Ltd. and Devika Trading Pvt. Ltd., the Tribunal emphasized that the noticing of contemporaneous imports at higher prices should not be the sole basis for rejecting the transaction value. Therefore, the Tribunal set aside the impugned order of rejection of transaction value and loading of value, allowing the appeal by the importers.