2017 (10) TMI 573 - AT - Customs

Valuation - imported Rechargeable Lamps PRL 228 - RSP - rejection of declared value - Held that - the appellant had based their assessable value on invoice price of US 0.75 per piece. However, no grounds have been evidenced for rejecting the said declared value as not being transaction value - instead of following the sequences laid down in the Valuation Rules for redetermination of value, the department, for some reason, found it appropriate to work out the assessable value on the basis of market prices of the impugned item obtained through market enquiry. The enhancement is then certainly not based on sufficient reasons for rejection of transaction value and redetermination of value thereupon being based on contemporaneous imports of identical goods - appeal allowed - decided in favor of appellant.

Issues:
1. Rejection of declared value and determination of enhanced value.
2. Confiscation of imported goods and imposition of penalty.
3. Compliance with Valuation Rules for determining assessable value.
4. Consideration of market prices in valuation process.
5. Reliance on voluntary statement of importer for value determination.

Analysis:

1. The case involved the rejection of the declared value of imported Rechargeable Lamps and the determination of an enhanced value by the authorities. The appellant imported goods valued at US$ 0.75 per piece, but the department proposed a higher value based on market enquiries. The original authority rejected the declared value and redetermined the enhanced value, leading to a demand for differential duty, confiscation of goods, and imposition of penalties. The Commissioner (Appeals) upheld this decision, prompting the appeal.

2. During the hearing, the appellant's advocate argued that the declared value was correct and not voluntary, as evidenced by subsequent retractions. The department was criticized for not following Valuation Rules in determining the assessable value and not considering the customs value previously determined. The appellant contended that the department should accept the invoice value unless mutuality of interest and additional consideration were proven.

3. On the other hand, the department supported the impugned order, citing a statement by Shri R. Bharat Kumar admitting to declaring a lower price to save customs duty. The correct price was claimed to be US$ 1.30 per piece. Both sides presented their arguments, and the facts were thoroughly examined.

4. The Tribunal noted that the appellant based their assessable value on the invoice price but found no grounds for rejecting it as the transaction value. The department's decision to determine the assessable value based on market prices obtained through enquiries was deemed inappropriate. The reliance on the importer's retracted voluntary statement and NIDB data for value determination was criticized, as it did not follow accepted practices and Tribunal precedents.

5. Ultimately, the Tribunal held that the impugned order upholding the enhancement of the assessable value could not be sustained. The decision was set aside entirely, and the appeal was allowed in favor of the appellant.

This detailed analysis of the judgment highlights the key issues of rejected declared value, compliance with Valuation Rules, reliance on market prices, and voluntary statements in determining the assessable value of imported goods.

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