2018 (1) TMI 1183 - AT - Customs

Valuation of imported goods - Poppy seeds - it was alleged that prices declared in the Public Ledger for poppy seeds during subject-period were abnormally higher than the declared price - contemporaneous imports - Held that - The issue of reliance on subject price of the imported goods in the Country of Origin at the relevant time falls foul of the provisions of the Customs Valuation Rules, which bars determination of value on the basis of price of the goods in the domestic market of the country of export - also, the adjudication order travelled beyond the scope of show-cause notice - impugned order cannot sustain - appeal allowed.

Summary

Issues:
1. Valuation dispute in import of White Poppy Seeds of Turkish origin - Enhancement of declared prices based on Public Ledger Prices.
2. Alleged under-declaration of value in import of White Poppy seeds - Reliance on various sources like Spices Weekly, Comtrade, Public Ledger Prices, and contemporaneous imports.

Analysis:

Issue 1: Valuation dispute in import of White Poppy Seeds of Turkish origin
In appeal no.C/00536/2009, the department sought to enhance the declared prices of White Poppy Seeds based on the Public Ledger Prices, alleging abnormally higher prices compared to contemporaneous import values. The original authority confirmed the proposal, leading to a demand for differential duty. The Commissioner (Appeals) upheld the order, relying on the Public Ledger Prices. The appellant argued against the enhancement, citing Customs Valuation Rules and previous appellate decisions. The Tribunal found that the reliance on the subject price in Turkey violated Customs Valuation Rules, which prohibit determining value based on domestic market prices of the country of export. Referring to a CESTAT Mumbai decision, the Tribunal held that information from sources like Comtrade and Public Ledger cannot be used to doubt or reject transaction value. Therefore, the impugned order was set aside, and the appeal no.C/00536/2009 was allowed.

Issue 2: Alleged under-declaration of value in import of White Poppy seeds
In appeal no.C/001449/2012, the declared values of White Poppy seeds were alleged to be low compared to contemporaneous imports in other parts of India. The adjudicating authority confirmed the proposal based on various sources like Spices Weekly, Comtrade, and Public Ledger Prices. The Commissioner (Appeals) rejected the appeal. The appellant argued against the reliance on these sources, citing a CESTAT Mumbai decision that disapproved of such reliance. The Tribunal found that the lower authorities' reliance on these sources could not be sustained. Additionally, the Tribunal noted that the CESTAT Mumbai decision had found no credibility in the enhancement of price in a similar case, indicating a lack of evidence. Therefore, the impugned order was set aside, and the appeal no.C/00149/2012 was allowed.

In conclusion, both appeals were allowed, and the impugned orders were set aside in light of the violations of Customs Valuation Rules and the improper reliance on sources like Comtrade and Public Ledger for valuation purposes.