2018 (3) TMI 1014 - AT - Customs

Re-assessment of value - Stearic Acid Pace imported from Malaysia - enhancement of value - Held that - Section 14 of the Customs Act as well as Customs Valuation Rules provides for rejection of transaction value only in certain specific cases and only after rejection of such value, the value can be re-assessed - In the present case, the transaction value has been rejected only by reference to NIDB data as well as in comparison of supplies made by the same suppler for another buyer in Cochin. Such rejection of transaction value is not justified especially in view of the fact that the two consignments are not comparable in terms of quantity and quality of the goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to re-assessment of import value based on comparison with another consignment.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was against the Order-in-Appeal No.9/2008 dated 1.2.2008. The appellant had imported Stearic Acid Pace from Malaysia and declared the import price at USD 475 per MT. However, Customs Authorities re-fixed the value at USD 500 per MT, citing that the same supplier had supplied to another buyer at Cochin at that rate during the same period. The appellant contested this re-assessment, arguing that the two consignments cannot be considered comparable goods due to differences in quantity imported. The learned advocate for the appellant emphasized the lack of justification for enhancing the value based on the Cochin consignment.

During the proceedings, the learned DR supported the impugned order justifying the re-assessment of value. However, after considering arguments from both sides and examining the records, the Tribunal noted the settled legal position that the value of imported goods should be determined based on transaction value, as per Section 14 of the Customs Act and Customs Valuation Rules. The Tribunal observed that rejection of transaction value should only occur in specific cases, and re-assessment is permissible only after such rejection. In this case, the rejection of transaction value was solely based on NIDB data and comparison with supplies to another buyer in Cochin by the same supplier. The Tribunal found this rejection unjustified, especially considering the differences in quantity and quality between the two consignments.

In reaching its decision, the Tribunal relied on precedent, including the case of Commissioner of Customs, Chennai vs. Pushpanjali Silk Pvt. Ltd.: 2017 (348) ELT 102 (Tri.-Chennai) and other relevant decisions. The Tribunal concluded that there was no justification to uphold the impugned order, setting it aside and allowing the appeal in favor of the appellant. The order was pronounced and dictated in Open Court on 09/02/2018.