2017 (10) TMI 866 - AT - Customs

Valuation - re-rollable steel scraps - rejection of declared value - the bills of entry were assessed on enhanced value, on the basis of cotemporaneous value of steel scraps imported by the other importers - Section 17 (5) of the Customs Act, 1962 - Held that - at no point of time the appellant have any occasion to lodge a protest. The bills of entry were filed and the same have been assessed and the appellant has paid the duty to avoid detention and demurrage charges. At no point of time, the appellant has accepted the enhanced value or have offered to the authorities below to enhance the value. In this case the value of contemporaneous imports has been taken as a basis for enhancing the price. The transaction value has not been rejected under Section 14 of the Customs Act, read with Rule 3(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. Also, no samples were drawn from the consignments and no laboratory reports of the contents of the said goods are available - reliance placed on the decision in the case of S.K. Dhawan vs. CC (Import) Mumbai 2016 (3) TMI 888 - CESTAT MUMBAI . The transaction value cannot be rejected on the basis of contemporaneous value of steel scrap in the absence of the details of such cotemporaneous imports and relied by the authorities below without bringing the evidence of undervaluation - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Enhancement of declared value without rejecting the transaction value.
2. Lack of notice and reasons for rejecting the transaction value.
3. Use of contemporaneous imports for assessing value.
4. Absence of evidence and documentation to support the enhanced value.
5. Relevance of case laws cited by the Commissioner (Appeals).

Detailed Analysis:

1. Enhancement of Declared Value without Rejecting the Transaction Value:
The appellants contested that the Revenue enhanced the value without formally rejecting the declared price. The Tribunal noted that the transaction value was not rejected under Section 14 of the Customs Act, 1962, read with Rule 3(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. The Tribunal emphasized that the authorities did not provide any evidence or documentary proof to support the enhanced value, making the enhancement unjustifiable.

2. Lack of Notice and Reasons for Rejecting the Transaction Value:
The Tribunal observed that the appellants were not issued a show cause notice nor were they informed that the adjudicating authority intended to enhance the declared value based on contemporaneous imports. The Tribunal highlighted that the appellants paid the duty to avoid detention and demurrage charges without having the opportunity to protest the enhanced value. This procedural lapse was deemed significant enough to set aside the impugned orders.

3. Use of Contemporaneous Imports for Assessing Value:
The Tribunal found that the value of contemporaneous imports was used as a basis for enhancing the price without rejecting the transaction value. It was noted that no samples were drawn from the consignments, and no laboratory reports were available to compare the goods. The Tribunal referred to several precedents, including the case of S.K. Dhawan vs. CC (Import) Mumbai, where it was held that contemporaneous import details must be considered if produced by the appellant-importer.

4. Absence of Evidence and Documentation to Support the Enhanced Value:
The Tribunal scrutinized the lack of evidence and documentation to justify the enhanced value. It was pointed out that the authorities did not provide any cogent material to show that the contemporaneous imports were at a higher price. The Tribunal cited the case of CC, Vishakhapatnam vs. Aggarwal Industries Limited, where it was held that before rejecting the transaction value, the revenue must bring on record cogent material demonstrating higher prices in contemporaneous imports.

5. Relevance of Case Laws Cited by the Commissioner (Appeals):
The Tribunal found that the case laws cited by the Commissioner (Appeals) were not relevant to the facts of the present case. In particular, the Tribunal distinguished the present case from Vikas Spinners vs. CC, Lucknow, and CC (Import), Mumbai vs. Asian Hotels Limited, noting that in those cases, the appellants had accepted the enhanced value, which was not the situation in the present case.

Conclusion:
The Tribunal concluded that the transaction value could not be rejected based on contemporaneous value without proper evidence of undervaluation. The impugned orders were set aside, and the appeals were allowed with consequential relief, if any. The Tribunal emphasized the necessity for the authorities to follow proper procedures and provide adequate evidence when enhancing the declared value of imported goods.

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