2016 (9) TMI 1118 - AT - Customs

Valuation - import of Crystal beads of marquise shaped glass with coating on its back - whether enhancement in declared value has been correctly made and upheld by the lower authorities with respect to glass beads/Chattons imported by the appellant? - Held that - The customs authorities are bound to assess duty on the transaction value and does not allow the department to ascertain an imaginary value based on the basis of DOV data. Only in exceptions specified in Section 14 of the Customs Act 1962 can the department follow Customs Valuation Rules. The supplier of glass beads and importer are not related persons and there is no evidence on record that any amount in excess of what has been declared by the appellant has been repatriated by the appellants. Thus there is no ground for rejecting the transaction value. Appellant has been importing the same goods at the declared/invoice value and no objection was raised for those contemporary imports of the appellant. There is also no evidence on record whether contemporary imports relied upon by the department are Identical goods or similar goods as defined in Rule 1(c) 9.20/kg. to 19, 069/- per kg. There is no wilful misstatement on the part of the appellant or any evidence indicating that some extra amount has been repatriated to the supplier for the present consignment. - confiscation of imported goods and imposition of penalty not attracted. The decision in the case of Eicher Tractors Ltd. Vs. C.C. Mumbai 2000 (11) TMI 139 - SUPREME COURT OF INDIA followed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Correctness of enhancement in declared value of imported goods.
2. Application of Customs Valuation Rules.
3. Confiscation of imported goods and imposition of penalty.

Analysis:

Issue 1: Correctness of enhancement in declared value of imported goods:
The appellant challenged the enhancement in the assessable value of the imported goods, arguing that similar goods had been imported before and after the disputed consignment at the declared value without any loading or penalties. The appellant contended that the value range of the goods provided by the Directorate of Valuation varied significantly, justifying the acceptance of the declared value. The appellant relied on the decision of the Apex Court in Eicher Tractors Ltd. v. C.C. Mumbai, emphasizing that unless specific exceptions applied, customs authorities should assess duty based on the transaction value. The Tribunal noted that there was no evidence of any excess payment to the supplier or fraudulent activity, concluding that the enhancement in value was arbitrary and unjustified.

Issue 2: Application of Customs Valuation Rules:
The Tribunal highlighted the importance of assessing duty based on the transaction value unless exceptions under Section 14 of the Customs Act, 1962 were met. The judgment emphasized that the department could not determine an imaginary value based on Directorate of Valuation data unless specific conditions were fulfilled. The Tribunal reiterated that the supplier and importer were not related, and no evidence suggested any repatriation of excess amounts, thus supporting the acceptance of the declared value. The judgment clarified that the law mandated duty assessment based on the price paid for the specific transaction, as per the Customs Valuation Rules.

Issue 3: Confiscation of imported goods and imposition of penalty:
Regarding the confiscation of imported goods and the imposition of penalties, the Tribunal noted that there was no evidence of willful misstatement or extra repatriation of funds to the supplier. The Tribunal found no grounds for confiscation or penalty imposition based on the factual circumstances. Consequently, the Tribunal allowed the appeal, setting aside the Order-in-Appeal passed by the first appellate authority.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of adhering to the transaction value for duty assessment unless specific exceptions applied under the Customs Valuation Rules. The judgment underscored the need for evidence to support any deviations from the declared value and highlighted the significance of legal precedents in determining the correctness of value enhancements in imported goods.