2019 (5) TMI 1358 - AT - Customs

Valuation of imported goods - enhancement of value based on NIDB data - Rule 5 of the Customs Valuation (Determination of the Value of Imported Goods) Rules, 2007 - HELD THAT - There are number of decisions which hold that NIDB data is not substantive material to enhance the value. Commissioner (Appeals) has held that the exact nature of the import of the goods is not very clear. The copy of the test report was not provided to the importer. The NIDB data on which basis the enhancement of declared value was done was also not informed to the respondent. There are any number of decision of higher appellate forum which have consistently reiterated that reliance on NIDB data for the purpose of enhancement of declared value of imported goods is not in order. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Valuation of imported goods based on Customs Valuation Rules.
2. Reliance on NIDB data for enhancing declared value.
3. Disclosure of test report and NIDB data to importer.

Analysis:
1. The case involved a dispute regarding the valuation of imported interlining fabric (flock) declared at 0.18 USD per meter in the Bill of Entry. The original authority enhanced the value to 1.374 USD per meter invoking Rule 5 of the Customs Valuation Rules based on test reports and NIDB data. The Commissioner (Appeals) found no evidence of a special relationship between the importer and the foreign supplier to justify the value enhancement. The lower appellate authority rejected the enhanced value as the nature of the imported goods was unclear from the test report, which only indicated the presence of printed woven fabrics with flock. The department appealed against this decision.

2. During the hearing, the Revenue argued that the foreign supplier's invoice and test report confirmed the characteristics of flock fabrics in the imported goods, justifying the reliance on NIDB data for valuation enhancement. On the other hand, the respondent's counsel contended that the reliance on NIDB data was unjustified as it was not provided to them, and the test report was not disclosed before the original authority's decision.

3. The Tribunal, after considering both arguments, held that previous decisions established that NIDB data alone is insufficient to enhance the declared value of imported goods. It noted that the nature of the imported goods was unclear, the test report was not shared with the importer, and the NIDB data was not disclosed to the respondent. Citing higher appellate forum decisions, the Tribunal upheld the Commissioner (Appeals)'s order, dismissing the department's appeal based on the lack of substantive material to support the valuation enhancement.

In conclusion, the Tribunal affirmed the decision of the Commissioner (Appeals) due to insufficient evidence supporting the valuation enhancement based on NIDB data and the lack of clarity regarding the nature of the imported goods as indicated in the test report.