2017 (7) TMI 182 - AT - Customs

Valuation of imported goods - compressed natural gas (CNG) kits and cylinders - rejection of declared value - Held that - The suppression of the price-list of the manufacturer from assessing authorities by the importer was considered sufficient to discredit the declared value - No cogent explanation has been afforded by the appellant to justify the condition in which unduly high discount was accorded in the negotiation - The contemporaneous nature of the goods imported for the purposes of comparison of valuation do not appear to be in doubt. The adjudicating authority has gone on to adopt a contemporaneous price for the levy of duty under Customs Act, 1962. However, in doing so, the impugned order has failed to place on record the bills of entry from which it was sourced as well as the manner in which that assessment was compliant with the valuation provisions - In order that the adjudication order is seen to be legal and proper, it is necessary that this glaring lack be rectified by examination of the bills of entry pertaining to imports effected contemporaneously and adequate opportunity be given to the appellant to present the case - appeal allowed by way of remand.

Summary

Issues: Valuation of imported CNG kits and cylinders, rejection of declared value, enhancement of assessable value, reliance on legal precedents, failure to produce pricelist, justification for non-acceptance of declared value, use of contemporaneous price, lack of record of bills of entry, remand to adjudicating authority.

In this judgment by the Appellate Tribunal CESTAT Mumbai, the dispute revolved around the valuation of eight consignments of 'compressed natural gas (CNG) kits and cylinders' imported by a company between April 2000 and July 2001. The Commissioner of Customs held the goods to be undervalued, leading to the recovery of differential duty, confiscation of goods, and imposition of penalties. The assessable value was enhanced based on the existence of contemporaneous import prices not consistent with the declared value, in accordance with Customs Valuation Rules.

The appellant relied on legal precedents such as the Supreme Court decision in Eicher Tractors Ltd v. Commissioner of Customs and a Tribunal decision in Bayer India Ltd v. Commissioner of Customs to argue that the declared value should be accepted as the actual price paid. However, the Tribunal found that the appellant failed to provide a satisfactory explanation for the discrepancies and the high discount given during negotiation. The Tribunal also noted that the contemporaneous prices used for comparison were valid, rejecting the plea to accept the declared price for assessment purposes.

The Authorized Representative supported the original authority's findings and referred to a Tribunal decision in another case to shift the burden of proof onto the importer for establishing no undervaluation. The Tribunal emphasized the importance of producing the manufacturer's pricelist and found the suppression of this information as a reason to discredit the declared value. The judgment highlighted the lack of proper record-keeping by the adjudicating authority in using a 'contemporaneous price' for duty levy under the Customs Act without sufficient documentation.

Consequently, the Tribunal directed a fresh hearing by the adjudicating Commissioner to rectify the lack of record of bills of entry and to provide the appellant with an opportunity to present their case adequately. The matter was remanded back to the Commissioner of Customs for further proceedings, emphasizing the need for a legal and proper adjudication process.