2019 (7) TMI 1970 - AT - Customs

Valuation of imported goods - Aluminum foil scrap - enhancement of value - rejection of transaction value of relying on guidelines and LME prices - HELD THAT - It is seen that the value declared by the appellant is to the range of 30% to the value of the contemporaneous import. It is seen that sub-rule 2 of rule 4 clearly prescribes the exception when the sale involves any abnormal discount or revision from ordinary competitive price. In the instant case it is seen that the sale involves almost 70% discount from the ordinary competitive price of contemporaneous imports. In view of above there was a jurisdiction in rejection of the declared invoice value. It is however found that the original assessment in the case of bill of entry no. 105345 dated 15.05.2006 was done at USD 1500 PMT but after issuance of SCN the same was revised upwards to USD 1780 PMT. Both these orders were passed by the Deputy Commissioner of Customs it is not found permissible. The value in bill of entry No. 105345 dated 15.05.2006 is fixed at 1500 USD PMT as was done in the original assessment - Revenue has produced contemporaneous import data. Revenue has chosen to rely on value of the contemporaneous import and thus fixing of the assessable value at 1780 PMT in respect of bill of entry no. 105750 and 105752. Revision of value in these cases is upheld. Appeal allowed in part.

Summary

Issues:
- Appeal against order of Commissioner (Appeals) upholding revision of assessable value and demand of Customs duty
- Challenge of enhancement of value by the appellant
- Rejection of transaction value based on guidelines and LME prices
- Lack of issuance of Show Cause Notice (SCN)
- Discrepancy in assessment values for different bill entries
- Contemporaneous import data and its impact on assessable value determination

Analysis:

The appeal was filed by M/s Chintan Aluminum Pvt. Ltd. against the order of the Commissioner (Appeals) upholding the revision of assessable value and consequent demand of Customs duty against the appellant. The appellant had imported Aluminum foil scrap and declared assessable value based on specific bill entries. The appellant challenged the enhancement of value before the Commissioner (Appeals) but failed to make the pre-deposit as directed. The matter was remanded back to the Commissioner (Appeals) by the Tribunal for further proceedings. The appellant argued that none of the exceptions under Rule 4(2) of the Customs Valuation Rules, 1988 applied in this case, and the transaction value should not have been rejected based on guidelines and LME prices. It was also highlighted that no SCN was issued in this case.

Upon reviewing the submissions, the Tribunal noted that the appellant had declared the price of the imported Aluminum foil scrap at a certain rate, which was significantly lower compared to contemporaneous imports. The Tribunal found that the declared value was around 30% of the contemporaneous import value, indicating a substantial discount. As per the rules, such a deviation from the ordinary competitive price could lead to the rejection of the declared invoice value. Additionally, discrepancies were noted in the assessment values for different bill entries, with the original assessment being revised upwards without proper justification. The Tribunal ruled that the value for one bill entry should remain at the originally assessed amount, while for others, the revision based on contemporaneous import data was upheld.

In conclusion, the Tribunal partially allowed the appeal, fixing the assessable value for certain bill entries based on the findings regarding contemporaneous import data and the application of valuation rules. The decision was pronounced in open court on 16.07.2019.