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2016 (11) TMI 1270 - AT - CustomsValuation - enhancement of value - Rule 6 of the Customs Valuation Rules, 1988 - Indonesia Copra Expeller Cake - The importer has totally imported 4000 MTs of Copra Expeller Cake. Out of this, quantity of 3000 tonnes have been imported at US 146 per MT whereas the balance 1000 MTs has been imported at a higher value of US 165 per MT. Revenue has enhanced the value of that portion of the imported cargo to the extent of 3000 MTs to US 165 per MT from US 146 which is the price paid for the balance 1000 MT - Whether enhancement of value justified? - Held that - the Revenue authorities have enhanced the value without giving proper justification for rejecting the transaction values. The enhancement of values ordered by the lower authorities appears to be in the nature of arbitrary and triggered by the fact that some goods stand imported by the importer in the same vessel at different prices. We are of the view that the fact that both the consignments had different prices and have been imported in the same vessel can be no valid reason for disregarding the transaction value. In any case, Revenue has not brought any other documentary evidence to say that the transaction value is to be doubted. The Hon ble Supreme Court s decision in the case of EICHER TRACTORS LTD. Versus COMMISSIONER OF CUSTOMS, MUMBAI 2000 (11) TMI 139 - SUPREME COURT OF INDIA support our stand. The impugned order cannot be sustained in the light of Section 14 of the Customs Act, read with Customs Valuation Rules - appeal allowed - decided in favor of appellant.
Issues: Appeal against enhancement of value of imported goods under Rule 6 of Customs Valuation Rules based on contemporaneous import price.
Analysis: The appeal was filed challenging the order passed by the Commissioner (Appeal) regarding the enhancement of value of imported goods. The appellant imported 3000 Tonnes of Indonesia Copra Expeller Cake at US $ 146 per MT, which was later enhanced to US $ 165 per MT under Rule 6 of the Customs Valuation Rules, 1988. The Commissioner upheld the enhancement, leading to the present appeals. The main contention was that the importer had agreed to import an additional 1000 MTs at US $ 165 per MT, while the original 3000 MTs were at US $ 146 per MT. The appellant argued that both values were genuine transaction values, and there was no evidence of additional consideration paid to the foreign supplier for the higher price of the additional 1000 MTs. The Customs authorities assessed all consignments at US $ 165 per MT, which was challenged on the grounds that the transaction values should have been accepted unless rejected with proper justification, as per Section 14 of the Customs Act and Valuation Rules. The learned advocate for the appellant contended that the higher price for the additional 1000 MTs was due to fluctuation in international trade prices and not due to any additional consideration paid. The appellant relied on specific case laws to support their argument. On the other hand, the Departmental Representative reiterated the findings of the lower authorities, justifying the enhancement based on contemporaneous import values in the same consignment by the same importer. The Tribunal carefully considered the submissions and case laws cited. It noted that the importer had imported a total of 4000 MTs, with 3000 MTs at US $ 146 per MT and the remaining 1000 MTs at US $ 165 per MT. The Tribunal found that the enhancement of value by the Revenue authorities lacked proper justification for rejecting the transaction values. It was observed that the enhancement seemed arbitrary and triggered by the fact that different prices were paid for goods imported in the same vessel. The Tribunal held that the transaction values were genuine, supported by orders and invoices, and there was no documentary evidence to doubt them. Relying on legal precedents, including the Hon'ble Supreme Court's decision and CESTAT Bangalore's decision, the Tribunal set aside the impugned order and allowed the appeals with consequential relief. In conclusion, the Tribunal found that the enhancement of value without proper justification and the disregard for genuine transaction values were not justified. The decision was made in light of Section 14 of the Customs Act, read with Customs Valuation Rules, supporting the appellant's position and setting aside the impugned order.
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