2023 (5) TMI 1335 - AT - Customs

Transaction Value - Reassessment of assessable value u/s 17(5) - Non speaking order - Imports PU Leather cloth of various thickness - HELD THAT - It is a established principle in law that any reassessments undertaken by the officers and enhancement of the value of imported goods has to be clearly spelt out by way of a speaking order issued Section 17(5) of the Customs Act, 1962. Any value loading therefore cannot be undertaken without specified reasons. There is nothing forthcoming from the case papers as to the basis of rejection of the declared transaction value, except for what at best is in the nature of hearsay evidence, till at least substantiated in accordance with legal provisions. This is particularly so, when the goods have been imported from the manufacturer/agent directly. There is no justification given by Revenue in loading the consignment s declared value, except for what is stated earlier. The rejection of the manufacturers invoice value is therefore without any cogent explanation. The reassessment is as cryptic as the rejection of the transaction value. It is clearly indicated in the Commissioner (Appeals) orders that the self assessment/import took place on the manufacturer s invoice and the said fact of issuance of invoice has not been disputed. The issue therefore, has no warrant for action as per DRI s letter or the CCRs as said to be fed in the ICES 1.5 System on the basis of communication from Commissioner (Customs). Thus, the appeal filed by the revenue is shorn of any merit and is thus liable to be dismissed. The order passed by the lower authority, the Ld. Commissioner (Appeals) is required to be maintained and upheld. Thus, the appeal filed by the Commissioner of Customs (Port) Kolkata is dismissed.

Summary

Issues involved: Appeal against reassessment of assessable value u/s 17(5) of Customs Act without proper reasoning and speaking order.

Summary:
The Commissioner of Customs (Port), Kolkata filed an appeal against an order in appeal passed by Ld. Commissioner (Appeals) concerning the redetermination of assessable value for imported PU Leather cloth. The assessing officer reassessed the 11 Bills of Entry at enhanced values without providing reasons or a speaking order as required u/s 17(5) of the Customs Act. The Ld. Commissioner (Appeals) set aside the assessment and directed reassessment at declared invoice values due to lack of communication on value loading. The revenue contended that reassessment was based on NIDB data and contemporaneous evidence, rejecting the declared value under Rule 12 of Customs Valuation Rules, 2007. However, the importer argued that manufacturer's invoice values should be upheld unless proven non-genuine, emphasizing the illegality of arbitrary value enhancements without proper disclosure of reasons.

The Tribunal noted the mandatory requirement of passing a speaking order u/s 17(5) for any reassessment, which was not done in this case. The importers emphasized that goods were directly imported from the manufacturer/agent, and the department's loading of values in the Bills of Entry was arbitrary and lacked legal basis. The absence of a speaking order deprived the importer of understanding the rationale behind the reassessment, violating principles of natural justice. The rejection of manufacturer's invoice value without proper explanation was deemed unjustified. The Tribunal upheld the Ld. Commissioner (Appeals) order, dismissing the appeal filed by the Commissioner of Customs (Port) Kolkata due to lack of merit.

In conclusion, the Tribunal dismissed the appeal, emphasizing the necessity of providing a speaking order and valid reasoning for reassessments, especially when goods are directly imported from the manufacturer/agent. The importance of upholding manufacturer's invoice values unless proven non-genuine was reiterated, highlighting the need for transparency and adherence to legal principles in customs valuation assessments.