2018 (3) TMI 2012 - AT - Central Excise

Valuation of imported goods - rechargeable batteries - rejection of declared value - existence of reason to enhance the value based upon the market enquiry or not - HELD THAT - It is seen that the appellant had declared the value of the imported goods, based upon the transaction value entered between him and the foreign supplier. The said transaction value does not stand accepted by Revenue on the basis of doubt entertained by them, resulting in conducting of market survey in India and rejecting the declared value of subject goods. It is well settled law that for enhancing the assessable value of the imported goods, Revenue has to first reject the transaction value by producing sufficient and cogent evidences. In the present case there is nothing on record to indicate or to establish that the transaction value entered between the exporter and the importer was not correct and there was under-hand compensation being given to the exporter. Admittedly, Revenue's case is based upon the market enquiry conducted in India which are bound to result in variations. In the absence of any evidence to reflect upon the incorrect transaction value, there are no justifiable reason to enhance the value based upon the marker enquiry. Appeal allowed.

Summary

Issues:
Imported goods valuation dispute, Revenue's market survey, rejection of declared value, assessable value enhancement, legality of penalty imposition.

Analysis:
The case involved a dispute over the valuation of imported rechargeable batteries. The appellant declared a value of Rs. 1,74,318, but Revenue conducted a market survey and sought to enhance the value to Rs. 16,69,812 based on their findings. The appellant agreed to pay duty on the higher value for clearance of goods, leading to a demand of Rs. 5,75,184 along with interest and a penalty of Rs. 50,000. The issue centered around Revenue's rejection of the declared value without sufficient evidence to support the decision.

The Tribunal noted that Revenue must first reject the transaction value with substantial evidence before enhancing the assessable value of imported goods. In this case, there was no proof to indicate that the declared transaction value was incorrect or involved under-hand compensation. Revenue's case relied on a market survey in India, which naturally led to variations. However, without concrete evidence of incorrect transaction value, the Tribunal found no justification for enhancing the value based on the market survey alone. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal emphasized the importance of Revenue providing substantial and cogent evidence to reject declared transaction values before enhancing assessable values. Without such evidence, decisions based solely on market surveys may not be legally justified. The judgment highlighted the need for a clear and evidence-based approach in disputes concerning imported goods valuation to ensure fairness and legality in customs matters.