2017 (4) TMI 1042 - AT - Customs

High seas sales - Valuation - The imports made in the name of M/s. S B International, and subsequent purchase of the goods on high sea sales basis from them - It stands recorded in the impugned order that contemporaneous import of identical or similar goods was not available - Held that - It is Revenue s own case that the goods in the present case are telescopic channels and drawers rather than the simple channels. If that be so, if telescopic channels are imported at the same price as is clear from another Bill of Entry, we really fail to understand as to how the other Bill of Entry are not contemporaneous and value shown in them cannot be adopted. The adjudicating authority has further rejected the evidence of contemporaneous imports by observing that whereas the goods in the present case were bought on high sea basis and imports at Kolkata were direct, the same cannot be considered to be at the same commercial level. We find no merits in the above distinction made by the adjudicating authority, as the import on high sea sale basis has no relevance for the purpose of value - as the appellant has been able to establish the contemporaneous imports the value of which is almost near to the values declared by the appellant, the enhancement is unsustainable. Valuation in USD and time gap of the import of goods, subsequent period taken for sale etc, are valid grounds to reflect upon the expenses which the importer may incur to further dispose of his goods in India. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Under-valuation of goods
- Rejection of transaction value
- Contemporaneous imports and value determination
- Backward calculations for value determination

Under-valuation of goods:
The appellant imported drawer slides and declared them under Customs Tariff Heading 8302. Revenue suspected under-valuation based on market inquiries and seized the goods. Further investigation revealed the appellant's purchase on high seas sales basis. Statements from involved parties were recorded. Pending adjudication, the appellant agreed to pay duty based on the Revenue's value. The Revenue proposed to enhance the value significantly, leading to the present appeal.

Rejection of transaction value:
The adjudicating authority rejected the transaction value, stating the importer used another firm's name to avoid taxes, and the goods were purchased from a trader, not the manufacturer. The authority also noted discrepancies in descriptions and market inquiries. However, the Tribunal found these reasons irrelevant to the value determination. The onus was on Revenue to provide tangible evidence to reject the transaction value, which was not done, leading to the impugned order being overturned.

Contemporaneous imports and value determination:
The appellant presented Bills of Entry for identical goods imported at Kolkata at the same value. The adjudicating authority rejected these on minor grounds, which the Tribunal found unconvincing. The value of contemporaneous imports was near the declared value, making the enhancement unsustainable. The Tribunal dismissed distinctions made based on high seas sales, emphasizing the relevance of contemporaneous imports for value determination.

Backward calculations for value determination:
Revenue calculated the value based on backward calculations, including expenses and profit margins. The appellant challenged these calculations, citing higher expenses and profit margins due to various factors. The Tribunal noted the validity of the appellant's arguments regarding expenses but found Revenue's calculations lacking supporting evidence. As a result, the impugned order was set aside, and the appeal was allowed.