2016 (12) TMI 897 - AT - Customs

Valuation of imported goods - Speakers of Kenwood make of different wattage, Dual Cone Speakers of Pioneer make, Dual Cone Speakers of Sony make, Stereo Power Amplifier of Sony make, Hella - Halogen Map lamp made in Germany, Carino Air Freshner liquid type made in Japan, Auto Lighters made in Japan - the appellant already accepted the enhancement of the value in the first assessment after examination, again the value was proposed to be enhanced further - is the second time enhancement of value justified? - Held that - A mere perusal of the description of goods which are supposed to be contained in the consignment, indicates that few items are having no brand and some are made in Japan and Germany and imported from supplier who was a trader. The declared value of the appellant which is claimed as transaction value was rejected and the value was enhanced by the assessing officer. Appellant accepted the enhanced value and discharged the customs duty as per the enhanced value. On the perusal of the consignment details, we find that the case of the main appellant needs to be accepted as the speakers and other spares of car audio accessories did indicate that consignment is of mixed lot. Since the appellant has already accepted the enhancement of the value in the first assessment after examination, we do not find any reason to further enhance the value as has been held by the adjudicating authority. Reliance placed on the case of Eicher Tractors Ltd. 2000 (11) TMI 139 - SUPREME COURT OF INDIA wherein the apex court has specifically stated the price list of the foreign supplier manufacturer is not a proof of the manufacturing value and existence of the price list cannot be the sole reason for rejecting the transaction value. In the case in hand, revenue s contest on the value of the goods which are imported in the consignment is not based on the finding that these were mixed lot and manufactured by different manufacturers. Impugned order is set aside and the appeal is allowed upholding the value which has been accepted for assessment and discharge of duty in the first instance - decided partly in favor of assessee.

Summary

Issues: Valuation of imported goods, Undervaluation, Transaction value, Stock lot, Manufacturer's price list, Tribunal's remand, Adjudication, Duty assessment, Penalty imposition.

The judgment pertains to three appeals challenging an Order-in-Original regarding the valuation of imported car audio system components. The revenue alleged gross undervaluation of the consignment, leading to detention and subsequent enhancement of value based on manufacturer's price lists. The main appellant contested the show-cause notice, arguing that the goods were purchased as a stock lot from a trader, relying on precedents like Shalimar Industries Ltd and Eicher Tractors Ltd. The Tribunal remanded the matter for providing relied upon documents to the appellant. Upon reevaluation, the adjudicating authority confirmed the demands and penalty, prompting the appeal.

The main issue revolved around whether the transaction value entered into by the appellant could be discarded in favor of enhanced value based on manufacturer's price lists. The appellant argued that being a stock lot, reverting to manufacturer's price was unnecessary, citing legal precedents supporting transaction value acceptance for stock lots. The revenue contended that the enhanced value admission itself indicated undervaluation, justifying the application of manufacturer's prices. The Tribunal analyzed the nature of the imported mixed lot, the appellant's procurement process, and the lack of direct purchases from manufacturers.

The Tribunal found merit in the appellant's arguments, emphasizing the mixed lot nature of the consignment and the consistent plea of purchasing as a stock lot from a trader. Relying on legal precedents like Eicher Tractors Ltd and Hindustan Pencils Ltd, the Tribunal held that the manufacturer's price list alone cannot override transaction value for stock lots purchased through traders. The Tribunal concluded that the impugned order was unsustainable, setting it aside and allowing the appeal to uphold the value accepted for duty assessment initially.

In summary, the judgment addressed the valuation of imported goods, the rejection of transaction value in favor of manufacturer's price lists, the nature of stock lots, and the legal principles governing such transactions. The Tribunal's decision highlighted the importance of considering the specific circumstances of procurement and the nature of goods in determining the appropriate valuation method, ultimately setting aside the enhanced value and penalties imposed.