2017 (11) TMI 1452 - AT - Customs

Valuation - Rule 8 - similar imports - Revenue entertained a view that the goods were undervalued for assessment by the importer appellant - Held that - It is an admitted fact that similar or identical items are not available with the authorities to compare the value or even to conduct the market enquiry to arrive at the value on computation - the methodology adopted by the Revenue by simply relying on the Chartered Engineer certificate who examined the raw material cost, cost of production etc. is not acceptable - matter is remanded to the original authority to re-determine the issue in all aspects after hearing the party - appeal allowed by way of remand.

Summary

Issues Involved:
- Undervaluation of imported goods
- Application of Rule 8 of Customs Valuation Rules
- Competence of Chartered Engineer in valuation
- Proper assessment based on sustainable reasons

Undervaluation of Imported Goods:
The appellant imported 'CHRA assembly' and filed a Bill of Entry. The Revenue alleged undervaluation and initiated an enquiry regarding the valuation of the goods. The original authority refixed the assessable value, demanded differential duty, and imposed penalties under the Customs Act, 1962. On appeal, the decision was upheld.

Application of Rule 8 of Customs Valuation Rules:
The Customs authorities applied Rule 8 to value the impugned items due to the lack of comparable or identical goods for comparison. However, the methodology adopted by relying solely on the Chartered Engineer's certificate for valuation was deemed unacceptable. The Chartered Engineer's expertise was questioned regarding costing analyses and determination of value for items manufactured outside India.

Competence of Chartered Engineer in Valuation:
The appellant contested the competence of the Chartered Engineer in determining the value of the imported goods, especially in the absence of comparable or identical items. The Chartered Engineer's role in assessing raw material cost, production cost, and other expenses for goods manufactured outside India was deemed questionable.

Proper Assessment Based on Sustainable Reasons:
The Tribunal found that the assessment based on Rule 8 was not properly conducted, lacking sustainable reasons and support from valuation provisions. The methodology used by the Revenue, solely relying on the Chartered Engineer's certificate without revealing the basis of calculation, was considered inadequate. The Tribunal set aside the impugned order and remanded the matter to the original authority for re-determination, emphasizing the need for a proper basis and supporting details in case Rule 8 valuation is applied.

This detailed analysis of the judgment highlights the issues of undervaluation, the application of Rule 8, the competence of the Chartered Engineer in valuation, and the importance of a proper assessment based on sustainable reasons as discussed and decided by the Appellate Tribunal CESTAT NEW DELHI.