2017 (9) TMI 1142 - AT - Customs

Valuation of imported goods - re-assessment if bills on the basis of contemporaneous price - enhancement of value - Held that - There is no evidence that transaction value was being influenced by any other considerations. The only basis for enhancement of value by the assessing officer is that certain imports of similar items were assessed with higher value around the same period - the contemporaneous imports have been made in connection with dissimilar nature of consignments with reference to quantity and also in some cases, period of import. Even otherwise, the price variation is in the range of 11 to 15%. The exact nature of goods and the details of contracts of the contemporaneous consignments were not available, only basic description and quantity of the imported items were available, which were compared. In the present case due examination about this crucial aspect has not been done by the assessing officer and comparison based on the contemporaneous import is not proper. Further, the contractual arrangements and invoices should not be rejected in the absence of any evidence to question their authenticity. As submitted by the appellants, NIBD data is a guidelines and an indicator for the assessing officer and it cannot be a substitute for assessable value. The assessable value for imported items has to be invariably arrived at applying Section 14 read with Customs Valuation Rules, 2007. Reliance placed in the case of Topsia Estates Pvt. Ltd. Vs. CC, Chennai 2015 (1) TMI 750 - CESTAT CHENNAI , where the adjudicating authority enhanced the value as the declared value appears to be very low compared to value available in NIDB data, otherwise, there is no material available, and it was held that in this particular situation, Rule 9 of the Valuation Rules would not be invoked. Appeal allowed - decided in favor of appellant.

Summary

Issues: Valuation of imports based on contemporaneous price, rejection of declared assessable value, application of Valuation Rules, comparison with similar import consignments, reliance on NIBD data, legal infirmity in assessing officer's actions.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the appellants, engaged in manufacturing ferrow alloys, imported iron and steel scrap for use in their plant at Raipur. The dispute centered around the valuation of these imports, with the assessing officer re-assessing the value based on contemporaneous prices available to him. The appellants contended that the transaction value based on commercial considerations should not be rejected without proper evidence. They argued that the assessing officer did not provide full details of the contemporaneous imports used for re-assessment, and comparison should be made with similar import consignments. The appellants also highlighted the provisions of Rule 3(1) of Valuation Rules, 2007, giving assessing officers the power to raise doubts on assessable value, which should be supported by relevant documents. They emphasized that NIBD data is only a reference value and cannot automatically enhance the assessable value without proper legal grounds.

The assessing officer defended his actions by stating that he raised a query based on doubts regarding the declared value being less than contemporaneous imports, and re-assessed the goods accordingly under Rule 4 of Valuation Rules, 2007. However, the Tribunal noted that the imports were based on specific written purchase orders and contracts, detailing the specifications and payment terms, with no evidence of other influencing factors on the transaction value. The Tribunal scrutinized the comparison made by the assessing officer with contemporaneous imports and found discrepancies in the nature of consignments, quantity, and period of import, leading to a range of 11 to 15% price variation. The Tribunal referred to Rule 12, which allows rejection of declared assessable value if proper clarification is not provided by the importer, but in this case, the appellants had submitted necessary documents supporting the declared value.

Moreover, the Tribunal emphasized that the assessing officer failed to conduct a thorough examination of the crucial aspect of contemporaneous value being significantly higher for identical or similar goods in a comparable commercial transaction, as required by the legal provisions. The Tribunal also highlighted the importance of contractual arrangements and invoices, which should not be dismissed without valid reasons questioning their authenticity. By referencing a previous Tribunal decision, the Tribunal reiterated that NIBD data is merely a guideline and cannot substitute the assessable value determined by applying Section 14 read with Customs Valuation Rules, 2007. Ultimately, the Tribunal found that the impugned orders lacked legal standing and set them aside, allowing the appeals with consequential relief.