2018 (8) TMI 41 - AT - Customs

Scope of SCN - Valuation of imported goods - related party transaction - deductive method - rule 3(3)(b) of the Customs Valuation Rules, 2007 - rejection of transaction value - Held that - The Commissioner (Appeals) instead of going into this issue where the value was determined under Rule 3(3)(b) came to the conclusion that the transaction value should not have been rejected under Rule 3(3)(a) - the Commissioner (Appeals) has gone beyond the scope of appeal inasmuch as Revenue had merely challenged the manner and the data on the basis of which the declared assessable value has been found correct. Thus, the Commissioner (Appeals) has travelled beyond the scope of dispute before him - matter is remanded to the Commissioner (Appeals) for adjudication on the specific issue which was raised in the appeal filed before him - appeal allowed by way of remand.

Summary

Issues involved:
1. Challenge against the order of the Commissioner (Appeals) rejecting the Revenue's appeal against the order of the Deputy Commissioner.
2. Acceptance of transaction value by the Deputy Commissioner based on data produced by the importer using the deductive method without specific verification.
3. Review by Revenue on grounds of unverified balance sheet data and discrepancies in costs and prices of imported vaccines.
4. Interpretation of Customs Valuation Rules, specifically Rule 3(3)(a) and Rule 3(3)(b).
5. Commissioner (Appeals) exceeding the scope of appeal by considering issues beyond the challenge raised by Revenue.
6. Setting aside the Commissioner (Appeals) order and remanding the matter for adjudication on the specific issue raised in the appeal.

Analysis:

1. The appeal was filed by Revenue against the order of the Commissioner (Appeals) rejecting their appeal against the order of the Deputy Commissioner. The case involved the import of vaccines by M/s. GlaxoSmithKline from a related supplier, where the transaction value was accepted by the Deputy Commissioner based on data provided by the importer using a deductive method without specific verification as required by Rule 3(3)(b) of the Customs Valuation Rules, 2007.

2. Revenue reviewed the acceptance of the transaction value citing discrepancies in costs and prices of the imported vaccines, emphasizing the need for verification of the balance sheet data to ensure accuracy. The Commissioner (Appeals) concluded that the transaction value should not have been rejected under Rule 3(3)(a) and proceeded to Rule 3(3)(b) for value determination. However, Revenue argued that the rejection under Rule 3(3)(a) was final as it was not challenged by the importer.

3. The Commissioner (Appeals) was accused of exceeding the scope of appeal by considering issues beyond the challenge raised by Revenue. The order-in-original relied on the similarity between the invoice price and the deductive value method price accepted by the importer without thorough scrutiny. Consequently, the Tribunal set aside the Commissioner (Appeals) order and remanded the matter for adjudication on the specific issue raised in the appeal.

4. The Tribunal's decision to remand the case highlighted the importance of adhering to the scope of the dispute raised in the appeal and ensuring proper scrutiny of the data and methods used to determine the transaction value under the Customs Valuation Rules. This judgment serves as a reminder of the procedural requirements and the need for thorough examination in customs valuation disputes to uphold fairness and accuracy in determining import values.