2016 (10) TMI 293 - AT - Customs

Valuation - Polished Porcelain Tiles - enhancement of value solely on the basis of NIDB data - comparison of imported goods with identical goods - Held that - if the value of contemporaneous imports in case of identical goods are not available it is the responsibility of the Revenue to compare with the really comparable imports. The comparison made using NIDB Data is for different Ports and when the appellants are buying the subject goods directly from the manufacturer, value in such goods has to be lower than the imports made from the traders. The appellants mention that the quantities purchased by them have been very high, when compared with the quantities shown in the NIDB Data. When the appellants are importing regularly at Cochin Port, and import 80-100 containers per month, the said importers definitely can negotiate to import at better/ lower price from the manufacturer supplier. - the case of enhancement of value are merely based on NIDB data, when such documents relating NIDB data were not even supplied to the appellants, thus not following principles of Natural Justice - Customs did not have justifiable evidence to reject the invoice values of the subject imports. The decision in the case of Commissioner of Customs, New Delhi Vs. DM International 2013 (5) TMI 549 - CESTAT NEW DELHI relied upon where it was held that NIDB data cannot be made the basis for enhancement of value. Enhancement of value not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Enhancement of value of goods based on NIDB data without following principles of Natural Justice.

Analysis:
The six appeals involved in this case concern the enhancement of the value of Polished Porcelain Tiles based on NIDB data. The appellants argued that the enhancement was made without adhering to the provisions of law and without providing details of the NIDB data. They contended that there was no evidence of financial flow back of funds or abnormal trade discount. The adjudicating authority was accused of violating the principles of Natural Justice by not supplying the relied-upon documents to the appellants. The appellants emphasized their long-standing business relations with the suppliers and their direct import from manufacturers. They argued that the data used for comparison were not comparable to their imports. The appellants cited various case laws to support their arguments.

The Revenue authorities justified the value enhancement by stating that declared values were low compared to similar goods. They mentioned that comparison with identical goods was ruled out due to the goods not being branded. The authorities took the lowest price of contemporaneous imports for valuation. However, it was observed that the Revenue did not make sufficient efforts to compare the subject imports with truly comparable ones. The comparison using NIDB data was deemed inadequate, especially since the appellants imported directly from manufacturers. The judgment highlighted that the cases of value enhancement were solely based on NIDB data without providing the documents to the appellants, thus violating Natural Justice principles. The judgment concluded that Customs lacked justifiable evidence to reject the invoice values of the subject imports.

The judgment referred to various decisions by higher judicial fora to support its findings. It cited cases where the rejection of transaction value and enhancement of assessable value had to be based on clear evidence. NIDB data alone was not considered sufficient for value enhancement. The judgment emphasized the importance of comparing imports with truly comparable ones and rejected the use of benchmark prices without proper justification. Based on the discussions and observations from higher judicial fora, the impugned orders were set aside, and all appeals were allowed with consequential relief.

In conclusion, the judgment highlighted the importance of following principles of Natural Justice and providing justifiable evidence for value enhancement based on NIDB data. It emphasized the need for proper comparison with truly comparable imports and rejected arbitrary value enhancements without clear reasoning.