2019 (1) TMI 834 - AT - Customs

Valuation of imported goods - Cold Rolled Grain Oriented Electrical Steel Sheet, Grade M-4 and Grade M-5 - rejection of declared value - enhancement of value based on the contemporaneous imports - Held that - It is evident from the available records that no consent letter was given by the respondent for assessment of the subject Bills of Entry at enhanced value. Thus, under such circumstances, the proper assessing officer was under statutory obligation to pass of speaking order on the reassessment done, which is contrary to the self assessment done by the importer - Admittedly, in this case, the provisions of Section 17(5) have not been complied with by the department and thus, the declared value cannot be enhanced arbitrarily - appeal dismissed - decided against Revenue.

Summary

Issues:
Assessment of imported goods based on contemporaneous imports
Requirement of a speaking order under Section 17(5) of the Act for enhanced value assessment

Analysis:
The case involved the Revenue appealing against orders passed by the Commissioner of Customs (Appeals) regarding the assessment of imported goods. The respondent had filed Bills of Entry for clearance of consignments, which were assessed at a value different from the declared transaction values based on contemporaneous imports. The department issued a query memo regarding one of the Bills of Entry, questioning the declared value. The respondent explained the pricing based on negotiated rates and higher quantity imported. However, the department did not accept the explanation and assessed the goods based on contemporaneous imports. The Commissioner (Appeals) set aside the enhanced value assessment, stating that without a written consent for assessment at an enhanced value, a speaking order under Section 17(5) of the Act was required within 15 days. As no such order was passed, the appeals were allowed in favor of the respondent.

Upon hearing both sides and reviewing the records, the Tribunal found that the respondent's submissions justifying the declared value were not considered, and the Bills of Entry were assessed solely based on contemporaneous imports. It was noted that no consent letter was provided by the respondent for the enhanced value assessment. Therefore, the proper assessing officer was obligated to pass a speaking order on reassessment, which was not done in this case. As Section 17(5) provisions were not complied with, the Tribunal concluded that the declared value could not be enhanced arbitrarily. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) to set aside the enhancement of value in the assessed Bills of Entry.

In the final judgment, the Tribunal dismissed the appeals filed by the Revenue, stating that there were no merits in them. The Tribunal affirmed the decision of the Commissioner (Appeals) regarding the assessment of the imported goods and the requirement of a speaking order under Section 17(5) for enhanced value assessment.