2018 (6) TMI 1305 - AT - Customs

Valuation of imported goods - Non Textured Polyester PA Coated Fabric - no rejection of value - enhancement of value - valuation based on similar goods - Rule 9 of the Customs Valuation (Determination of value on Imported Goods) Rules, 2007 - Held that - The transaction value is the basis for assessment unless proved to be wrong or affected by extraneous considerations. The Revenue has not rejected the transaction value first. The Appellate Authority has referred to precedent decisions holding to that effect - In the absence of rejection of the transaction value, Revenue cannot proceed ahead to re-determine the value in terms of the subsequent rules of Customs Valuation Rules. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Rejection of enhancement of value of imported fabric by Commissioner (Appeals)
2. Application of Customs Valuation Rules in determining the value of imported goods

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner (Appeals) setting aside the enhancement of the value of imported fabric. The importer had filed a Bill of Entry for clearance of 'Non Textured Polyester PA Coated Fabric', but the assessing officer rejected the declared value and re-determined the value under Rule 9 of the Customs Valuation Rules. The Commissioner (Appeals) observed that there was virtually no evidence to show that the transaction value was incorrect, citing the Hon'ble Supreme Court decisions and Rule 4(2) exceptions. The Commissioner held that in the absence of circumstances covered by Rule 4(2) exception, the assessment had to be done on the transaction value.

2. The Revenue argued that the value could not be determined under Sub-rule 1 of Rule 3 due to the absence of product specifications. They contended that identical goods with necessary specifications and comparable quantities were not considered by the Commissioner (Appeals), and relied on the Supreme Court decision in the case of M/s Padia Sales Corporation to support their stance that the prevailing international market price should be used for valuation. However, the Tribunal found that the legal issue was settled - transaction value is the basis for assessment unless proven wrong or influenced by external factors. Since the Revenue did not reject the transaction value initially, they could not re-determine the value under subsequent Customs Valuation Rules. The Tribunal agreed with the Commissioner (Appeals) that in the absence of rejection of the transaction value, there was no need for interference. Consequently, the Revenue's appeal was dismissed, and the Stay Petition was disposed of.