2016 (11) TMI 301 - AT - Customs

Valuation - Fused Magnesia - assessable value - Rule 10A - rejection of declared value - comparable goods imported from Vizag - Held that - It is seen that the appellants have not pointed out the country of origin and the name of the supplier in the said cases of import at Vizag. In the absence of the same it cannot be said that they are comparable goods. In the case of contemporary imports pointed out by the Revenue it is seen that both the imports are from same supplier M/s.Possehl, Hong Kong and very proximate date of import of the appellant. In these circumstances, not relying of the import made in Vizag and relying on imports made from the same supplier at near about the same time is justified. The decision in the case of COLLECTOR OF CUSTOMS, BOMBAY Versus SHIBANI ENGINEERING SYSTEMS 1996 (8) TMI 106 - SUPREME COURT OF INDIA referred, where it was held in similar circumstances involving import from a trader, where the manufactures invoice was not produced, that ridiculously low price can be rejected. In the instant case, the price declared was less than 40% of the contemporary import price and therefore, it was rightly rejected. Furthermore, the appellants have contested that what they have imported is of 97% purity and the purity of the contemporary imports has not been mentioned. It has been argued that the contemporary imports made have been of 97% purity. We find that the imports of appellant are of 97% purity and the purity in the case of the contemporary imports cited by the appellant as well as Revenue is not mentioned. In any case, the difference between the declared price and the contemporary import price from the same company and the same country of origin is extremely high. Even if there is some difference in purity it cannot be significant as the imports made by the appellants are 97% purity and there is not much scope to purify the product further. Appeal dismissed - decided against appellant.

Summary

Issues:
Valuation of imported goods under Rule 10A - Rejection of declared price - Comparison with contemporary imports - Relevance of purity in valuation - Rejection of transaction value without proper reasons.

Valuation of imported goods under Rule 10A:
The case involved the appellant importing Fused Magnesia and declaring a price of US $ 326 PMT. However, based on contemporary imports of identical goods at a higher price, the assessable value was enhanced to US $ 853.3 PMT under Rule 10A. The appellant challenged this valuation before the Tribunal, citing the decision in the case of Shibani Engineering Systems. The Tribunal noted that the Revenue had accepted imports at a different price from Vizag port but pointed out that those imports did not involve comparable goods as they did not specify the country of origin or supplier. Ultimately, the Tribunal upheld the enhanced valuation based on imports from the same supplier at a similar time.

Rejection of declared price and comparison with contemporary imports:
The appellant argued that the adjudicating authority failed to provide reasons for rejecting the declared price of US $ 326 PMT. However, the Tribunal referenced the Supreme Court's decision in Shibani Engineering Systems, which allows for the rejection of unrealistically low prices. In this case, the declared price was significantly lower than contemporary import prices, justifying its rejection. The Tribunal also noted that the purity of the imported goods was 97%, while the purity of contemporary imports was not specified. Despite potential differences in purity, the substantial price gap between the declared value and contemporary imports supported the rejection of the declared price.

Relevance of purity in valuation:
The appellant emphasized the purity of the imported goods as 97% and argued that this should impact the valuation. However, the Tribunal found that while the purity of the appellant's imports was specified, the purity of contemporary imports was not mentioned. Even if there were differences in purity, the significant price difference and the limited scope for further purification supported the enhanced valuation based on contemporary import prices.

Rejection of transaction value without proper reasons:
The appellant contested that no reasons were provided for rejecting the transaction value. The Tribunal, drawing from the Supreme Court's decision in Shibani Engineering Systems, clarified that in cases involving unrealistically low prices, rejection of the declared value is justified. Given the substantial price difference and lack of clarity on contemporary import purity, the Tribunal upheld the rejection of the declared price without detailed reasons provided by the adjudicating authority.

In conclusion, the Tribunal dismissed the appeal, upholding the enhanced valuation of the imported goods based on contemporary import prices and the significant price difference with the declared value. The decision highlighted the importance of considering comparable imports, purity levels, and justifying the rejection of declared prices based on substantial discrepancies in valuation.