2018 (2) TMI 242 - AT - Customs

Valuation of imported goods - Barudan Multi Head Computerized Embroidery machine Model BED XH-YNB 20 head, 9 colour - similar goods - basis of enhancement of value was a purported identical model imported by different importer vide their Bill of Entry No.731210 dt. 20.12.2004 wherein the import price was ₹ 39,85,800/- - Held that - appellant had produced catalogue, explanation of the supplier for the price variation and also outlined the differences between the two models. They had also produced the proforma invoice from the foreign supplier which matched the final commercial invoice. Copy of the insurance policy for the goods imported has also been produced. The lower authorities have however not addressed these evidences nor have they distinguished or demolished the same - in any case, the difference between the declared value and enhanced value is around 27% which could be ascribed not only on account of differences in the features between the two machines but also on account of the five months interregnum period between the two imports. Reliance is placed on the ratio of the Apex Court judgment in Basant Industries Vs Addl. Collector of Customs, Bombay 1995 (1) TMI 89 - SUPREME COURT OF INDIA wherein it has been laid down that mere comparison of invoices received by the importer with the invoices of imports of same goods by other importer is not conclusive for determination of undervaluation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Customs valuation rules application and rejection of transaction value without basis; Failure to consider price variation explanation for machinery purchased in 2005; Disregard of evidence supporting lower cost machine claim; Non-consideration of differences between imported models; Comparison with another importer's model; Appellant's evidence dismissal; Appeal against enhanced value assessment.

Analysis:
The case involved the import of a Barudan Multi Head Computerized Embroidery machine, where the declared value was enhanced by the department based on a similar machine imported by another party at a higher value. The appellant argued that the lower authorities rejected the transaction value without following Customs Valuation Rules and failed to consider explanations for the difference in value due to changes in the machinery to compete with Korean and Chinese markets. The appellant provided evidence such as catalogues, supplier explanations, and invoices to support their claim of a lower-cost machine, which was not adequately addressed by the authorities.

The appellant also highlighted the difference in features between the imported models and the evidence of the lower cost of the 2005 model compared to the 2004 model. The appellant's submissions, including a letter from the foreign supplier and insurance policy, were disregarded by the lower authorities. The Tribunal noted that the authorities did not address or refute the appellant's evidence, and the difference in declared value and enhanced value could be attributed to both the machine differences and the time gap between imports.

Ultimately, the Tribunal found merit in the appellant's appeal, referencing the case law of Basant Industries, which supported the appellant's case. The impugned order was set aside, and the appeal was allowed with consequential relief as per the law. The judgment emphasized the importance of considering all evidence and differences between imported models in customs valuation assessments to ensure fairness and accuracy in determining the value of imported goods.