2017 (7) TMI 80 - AT - Customs

Valuation - misdeclaration of declared value - Finalisation of provisional assessment - jurisdiction - power of adjudicating authority - whether the adjudicating authority was a proper officer of customs? - Held that - the impugned order refers to the pricelist as that of 2000 in some places and as of 2006 in others; it is, therefore, not clear whether the pricelist is contemporaneous or is of 2000. It would also certainly stretch the limits of reason to countenance what is referred to in the impugned order as practice of assessment followed by the department for justifying resort to pricelist of 2000 - It would also appear that the impugned order has proceeded directly to rule 8 without sequentially applying the rules preceding it. It is also seen from the appeal before us that an agreement for a substantially large order had been contracted with the seller in Singapore who had entered into an agreement for supply by the manufacturer. The impugned order has failed to take notice of this agreement which must be considered relevant, in the absence of any contemporaneous imports, for determining the appropriateness of the declared value. The assessable value had not been mis-declared by the appellant - At the same time, the appellant has not been able to establish that the inconsistencies pointed out are borne out by facts and are not mere inferences. The existence of authenticated pricelist as well as contemporaneous imports with higher declared value cannot be ruled out. Revenue cannot be allowed to be jeopardised owing to less than diligent application of mind in adjudication. Sufficient evidence had been furnished to the appellant in the SCN as to justify the initiation of proceedings. Those proceedings must be brought to culmination by the competent authority after due consideration of the show cause notice the various evidences adduced therein and those produced by the noticee. It would, therefore, be appropriate that this exercise be undertaken with promptitude - appeal allowed by way of remand.

Summary

Issues:
1. Provisional assessment directed by High Court for import goods valuation.
2. Discrepancies in the assessment process and adoption of pricelist for valuation.
3. Confiscation of goods and imposition of penalties by the adjudicating authority.
4. Application of Customs Valuation Rules and reliance on pricelist for assessment.
5. Lack of clarity in the assessment of 'ball bearings' and inconsistencies in the assessment process.
6. Need for a fresh decision in accordance with the law and show cause notice.

Analysis:
1. The case involved the appellant, M/s Shivam Impex, filing a bill of entry for the import of 'ball bearings.' The customs officer directed the importer to produce authenticated documents regarding the price list of the manufacturer. The High Court directed provisional assessment, which was later finalized, leading to a show cause notice proposing the rejection of declared value and enhancement of value based on contemporaneous imports. The adjudicating authority then confiscated the goods and imposed penalties, leading to an appeal challenging the assessment process.

2. The Tribunal observed that the finalization of provisional assessment should bridge the void that precluded assessment. There were doubts regarding whether necessary information was available with the assessing authority and if the proper officer of customs was the one responsible for assessment. The Tribunal highlighted the need for the power to assess to be exercised by the proper officer of customs, as per the Customs Act, 1962.

3. The Tribunal considered the decision of the Hon'ble Supreme Court in a similar case and emphasized the importance of proving that the declared value was not the ordinary sale price. It noted discrepancies in the assessment process, especially regarding the adoption of the pricelist for valuation without clear evidence of its acceptability. The Tribunal also highlighted the relevance of an agreement between the importer and the seller in determining the appropriateness of the declared value.

4. Inconsistencies were noted in the assessment of different types of 'ball bearings,' with the reliance on pricelists and lack of clarity on whether the assessable value had been revised accordingly. The Tribunal stressed the need for a credible assessment process and the importance of considering all relevant factors, including authenticated pricelists and contemporaneous imports.

5. Ultimately, the Tribunal set aside the impugned order and remanded the matter back to the original authority for a fresh decision in accordance with the law and the show cause notice. It emphasized the need for a prompt and diligent assessment process to ensure the protection of revenue and the rights of the importer.