2016 (12) TMI 1500 - AT - Customs

Valuation of imported goods - PVC coated cloth polyester taffeta - mis-declaration of value of goods as similar goods were imported by VIP Industries at a higher rate - Held that - the goods imported by VIP Industries is not from the same supplier and the quantity by VIP Industries is far less and in kgs. while the goods imported by the respondent are huge for trading purposes - adjudicating authority has held that there is marginal difference between the declared price and the value proposed to be loaded, that the transportation, handling, charges and margin of profit are not based on any standard formula and a slight difference in these charges would substantiate the declared price. Unless there is substantial difference between the declared price and the value determined after market enquiry loading must be avoided and the transaction value can be accepted - impugned order upheld - appeal dismissed - decided against Revenue.

Summary

Issues involved: Valuation of imported goods based on declared price, rejection of declared value, consideration of contemporaneous imports, comparison with goods imported by another entity, application of Customs Valuation Rules.

Analysis:

1. Valuation of Imported Goods: The case revolved around the valuation of goods imported by the respondent. The declared price of the goods was challenged by the revenue authorities based on suspicion of misdeclaration and excess quantity. The lower authorities conducted tests and proposed an enhancement of the value, leading to a show-cause notice being issued to the respondent.

2. Rejection of Declared Value: The adjudicating authority rejected the declared value under Rule 10A of the Customs Valuation Rules, 1988, due to suspicions regarding the accuracy of the declared price. The authority emphasized the need for proper assessment under Rule 6 and 7 of the Customs Valuation Rules based on contemporaneous imports of identical or similar goods.

3. Consideration of Contemporaneous Imports: The revenue contended that the adjudicating authority failed to consider the issue properly, particularly in terms of assessing the correct value in the absence of contemporaneous import data. The departmental representative argued that the correct assessable value should have been determined based on market enquiry and comparison with similar goods imported by other entities.

4. Comparison with Goods Imported by Another Entity: The respondent, represented by their counsel, defended the declared value by providing evidence of imports of identical or similar goods in the same quantity from the same supplier. They argued that the prices declared were consistent with those charged by the supplier to other buyers, including VIP Industries. It was highlighted that the goods imported by VIP Industries were different, with significantly lower quantities compared to the respondent's imports.

5. Application of Customs Valuation Rules: The appellate tribunal analyzed the facts and arguments presented by both sides. They upheld the impugned order, emphasizing that the quantity and nature of imports by VIP Industries were not comparable to those of the respondent. The tribunal concluded that the impugned order was legally sound and correctly applied the Customs Valuation Rules, dismissing the appeal filed by the revenue.

In conclusion, the judgment focused on the proper valuation of imported goods, the rejection of declared value, the significance of contemporaneous imports, the comparison with goods imported by another entity, and the application of the Customs Valuation Rules to determine the correct assessable value.