2017 (1) TMI 1274 - AT - Customs

Valuation - Rule 8 of the Valuation Rule, 1988 - Held that - There is no material on record to discard adoption of Rule 8 when the justification is given by adjudicating authority in para 8 of his order. There was a technical evaluation of the goods and that demonstrated that the goods imported has still life for the commercial utilization - residual method adopted for valuation is justified. So far as redemption fine is concerned, for no market enquiry done by the authority, to ascertain market value, it is considered proper that imposition of redemption of ₹ 1,00,000/- may be justified. So far as penalty of ₹ 85,000/- is concerned, in absence of any ingredient to prove malafides of appellant, imposition of penalty of ₹ 50,000/- is considered proper. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Valuation of imported goods, application of Rule 8 of the Valuation Rules, imposition of Additional Duty, redemption fine, penalty

In the judgment by the Appellate Tribunal CESTAT CHENNAI, the issue of valuation of imported goods was discussed. The appellant argued that the demo piece of the imported goods should not be presumed as commercial goods, as it was for procuring business. However, the adjudication had enhanced the assessable value, levying Additional Duty, redemption fine, and penalty. On the other hand, the Revenue contended that the goods must meet the test of transaction value, and as the declared value was abnormally low, Rule 8 of the Valuation Rule, 1988 was applied to determine the assessable value.

The Tribunal, after hearing both sides and examining the records, found that the declared value of the goods was ?1,54,000, which was enhanced to ?8,23,637 applying Rule 8 of the Valuation Rules. The Tribunal noted that there was technical evaluation confirming the commercial utility of the imported goods, and the Commissioner (Appeals) correctly applied Rule 8 for valuation. The Tribunal upheld the application of the residual method for valuation, stating it was not contrary to law, thus leaving the valuation unchanged.

Regarding the redemption fine, the Tribunal observed that no market enquiry was conducted to ascertain the market value, leading to a reduction of the redemption fine from ?1,65,000 to ?1,00,000. Additionally, the Tribunal reduced the penalty from ?85,000 to ?50,000, as there was no evidence to prove any malafides on the part of the appellant.

In conclusion, the appeal was partially allowed by the Tribunal, with the assessable value determined under Rule 8 upheld, the redemption fine reduced to ?1,00,000, and the penalty reduced to ?50,000.