2018 (10) TMI 332 - AT - Customs

Valuation of import consignments - cooling pads - rejection of declared value - enhancement of assessable value on the basis of contemporaneous import price of similar / identical goods - Rule 5 of the Customs Valuation Rules - Held that - The price of the consignment of cooling pads when imported by the appellant importer has been compared with the contemporaneous price of similar/ identical imports, it is also a matter of fact that during contemporary period, as it appears from the record of appeal that the importer has been confronted with contemporary import prices which were much higher than what has been declared by them on the Bill of Entry. Since the department had valid reasons for rejection of declared assessable value as per section 14 of the Customs Act, 1962 as same were found much lower than the contemporary prices of similar / identical goods, the importer was confronted with these facts and the importer has agreed for enhancement of the import price of their import consignment from ₹ 118/- to ₹ 220/- per kg. (which was average price of range of import price varying between ₹ 180 to ₹ 240/- per kg at the relevant time). Since the importer appellant at the time of import has agreed themselves for enhancement of the value of their consignment on the basis of contemporaneous import price, we hold that the price for enhancement ought to have been taken ₹ 180/- per kg. which was lowest range of contemporary price and not the average price of ₹ 220/- per kg. Matter remitted back to the original adjudicating authority for redetermination of the Customs duty taking the value of the import consignment at ₹ 180/- per kg. instead of ₹ 220/- kg. - appeal allowed by way of remand.

Summary

Issues:
1. Mis-declaration of value in imported consignment of cooling pads.
2. Application of Customs Valuation Rule 5 for enhancement of declared value.
3. Validity of importer's agreement for enhancement of value.
4. Comparison of contemporaneous import prices for valuation.
5. Interpretation of relevant legal provisions and case laws.

Analysis:
1. The appellant importer declared the value of a consignment of cooling pads at &8377; 118/- per kg, which was later found to be mis-declared by the department based on contemporaneous import prices ranging between &8377; 180/- to &8377; 260/- per kg. The department enhanced the value to &8377; 220/- per kg, resulting in additional customs duty and a penalty imposed on the importer.

2. The appellant contended that the application of Customs Valuation Rule 5 for enhancement of the declared value was legally unsustainable. They argued that the declared value was the true transaction value and should not have been rejected based on contemporaneous prices. The appellant also emphasized negotiations with the foreign supplier to obtain a lower price, challenging the department's valuation method.

3. The department argued that the importer had agreed to the enhanced value at the time of import, waiving their right to challenge the valuation later. The department asserted that the importer's agreement and waiver of procedural rights precluded them from disputing the enhanced value determination.

4. The Tribunal examined the comparison of the imported consignment's value with contemporaneous import prices and found that the department had valid reasons to reject the declared value. However, the Tribunal held that the lower range of contemporaneous import prices should have been adopted for valuation, citing a relevant Supreme Court decision on Customs Valuation Rules.

5. Based on the above analysis, the Tribunal remanded the matter to the original adjudicating authority for redetermination of customs duty, directing the value of the import consignment to be considered at &8377; 180/- per kg instead of &8377; 220/- per kg. The appeal was allowed by way of remand, emphasizing the correct application of valuation principles and legal precedents in customs matters.