2017 (3) TMI 1196 - AT - Customs

Valuation of imported goods - 888 Brand Glass Chatons - Unbranded Coloured Glass Chatons - Pocket Scale & Cutters - rejection of declared value - appellant s case is that without showing the evidence for contemporaneous imports transaction value cannot be rejected - Held that - Revenue s case is not based on the reliable evidences, which could be legally sustained - In the practical world, unless manufacturer s price list has got corroboratory evidences which can be in the form of contemporary imports or further corroboration from the manufacturer s end on the prices for India for this much quantity, the Revenue s order in appeal for enhancement of value in case of 888 brand glass chatons cannot be sustained legally. Unbranded Coloured Glass Chatons - Held that - There is no enquiry made with the experts in the field of subject goods namely Unbranded Coloured Chatons. The Revenue has re-determined the value under rule 9 of CVR 2007 on the basis of market enquiry. However, from the facts it appears that market enquiry was not scientifically conducted and market enquiry in the absence of any corroboratory evidence cannot become sole basis for sustaining the enhancement of value as done by the impugned order - enhancing the value of these items cannot be legally sustained. Pocket Scale & Cutters - Held that - there is no systematic data of market enquiry available and further market enquiry alone cannot become the basis of enhancement of the value unless the results of the market enquiry are corroborated by independent evidences which could be contemporary imports or manufacturer s price list, which again needs support by the specific written declaration from manufacturer - enhancement of value not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of declared value of imported goods
- Confiscation of goods and imposition of penalties
- Reliability of market inquiry for valuation
- Misdeclaration of country of origin
- Application of Customs Valuation Rules

Rejection of Declared Value of Imported Goods:
The appeal was against an Order-in-Original rejecting the declared value of imported goods and re-determining it under the Customs Act and Customs Valuation Rules. The appellants imported glass chatons, cutters, and pocket scales. The revenue issued a show cause notice for enhancement of values, leading to the rejection of the declared value and imposition of penalties. The appellants argued against the rejection, citing lack of evidence for contemporaneous imports, reliance on market enquiry without expert opinion, and inconsistencies in the examination process. The tribunal considered the arguments and found the revenue's case lacked reliable evidence, leading to the set aside of the impugned order.

Confiscation of Goods and Imposition of Penalties:
The impugned order not only rejected the declared value but also confiscated the goods and imposed penalties on the appellants. The penalties included a redemption fine and personal penalties on individuals. The appellants challenged these penalties, arguing against the basis for rejection of transaction value and lack of reliable evidence for valuation. The tribunal found the revenue's case lacked legal sustainability due to insufficient evidence, leading to the allowance of the appeals with consequential relief.

Reliability of Market Inquiry for Valuation:
The revenue re-determined the value of goods based on market inquiry, especially for unbranded colored glass chatons, pocket scales, and cutters. However, the tribunal found the method of market inquiry not free from doubt, lacking expert opinions and scientific conduct. The reliance solely on market inquiry without corroborative evidence or systematic data was deemed insufficient to sustain the enhancement of value, resulting in the set aside of the impugned order.

Misdeclaration of Country of Origin:
The case involved misdeclaration of the country of origin, particularly concerning 888 brand glass chatons. The revenue argued misdeclaration to suppress actual transaction value, citing evidence from the manufacturer and price lists. However, the tribunal found the revenue's case lacked contemporary import prices for comparison and relied on theoretical exercises without sufficient corroborative evidence, leading to the legal unsustainability of the enhanced value determination.

Application of Customs Valuation Rules:
The tribunal analyzed the application of Customs Valuation Rules in determining the value of imported goods. It found the revenue's reliance on market inquiry alone without additional corroborative evidence or expert opinions to be legally insufficient. The tribunal emphasized the need for systematic data and reliable evidence to sustain enhancements in value, as demonstrated in various case laws cited by the appellants. Ultimately, the impugned order was set aside, and the appeals were allowed with consequential relief.