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2020 (6) TMI 68 - AT - CustomsValuation of imported goods - aluminum scrap namely Taint Tabor, Tread, Tense, Zorba, Talk, Troma, terse, Twitch, Telic, etc. - case of the department is that the appellant have given a consent letter to the proposal of the enhancement of the value from USD 990 PMT as per invoice value to USD 1587 PMT - period August 2018 to May 2019 - HELD THAT - It is clear that when the enhancement was not based on any contemporaneous import, in the present case, particularly, when the invoice price of the appellant was not disputed on the basis of any evidence of wrong declaration of the value, the enhancement in the present case is illegal and incorrect. In the case of COMMISSIONER OF CUSTOMS, NEW DELHI VERSUS PRABHU DAYAL PREM CHAND 2010 (4) TMI 360 - SUPREME COURT , the value was enhanced on the basis of LME price and assessee was not confronted with any contemporaneous material. The Hon ble Supreme Court held that Tribunal order manifesting the detail of any contemporaneous imports or any material undertaking price notified by LME neither referred to by Adjudicating Officer nor such material was placed before Tribunal. Revenue has not been able to controvert the said Tribunal s observations. On the various issues, such as whether after giving consent by the importer, the value can be enhanced, whether enhancement can be made on the basis of DGOV circular have been considered and conclusively held that in such circumstances invoice prices cannot be disputed and enhancement of the value cannot be made - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Valuation of imported aluminum scrap. 2. Legality of enhancement of value based on DGOV Circular. 3. Validity of consent letter given by the appellant. 4. Application of Customs Valuation Rules. 5. Authority of the Tribunal to decide the appeal without remanding. Detailed Analysis: 1. Valuation of Imported Aluminum Scrap: The primary issue in these appeals was the valuation of various types of aluminum scrap imported by the appellant from different countries between August 2018 and May 2019. The appellant used the scrap as raw material for manufacturing aluminum ingots. The department contended that the appellant consented to enhance the value from USD 990 PMT to USD 1587 PMT based on contemporaneous import data. However, the appellant argued that the enhancement was actually based on a DGOV Circular dated 01/12/2016, not on contemporaneous data. 2. Legality of Enhancement of Value Based on DGOV Circular: The appellant challenged the enhancement, stating that the DGOV Circular's notional value was not a correct or legal basis for valuation. The Tribunal in various cases has held that enhancement based solely on a DGOV Circular without contemporaneous data is illegal. The Tribunal found that the enhanced value was derived from the LME price of prime metal minus a discount as per the DGOV Circular, not on contemporaneous import data. Therefore, the enhancement was deemed illegal and incorrect. 3. Validity of Consent Letter Given by the Appellant: The appellant argued that even if a consent letter was given, the enhancement must comply with the Customs Valuation Rules, which was not done. The Tribunal noted that the Supreme Court in the case of Century Metal Recycling Pvt. Ltd. held that consent given under coercion does not waive the right to a provisional assessment or the requirement for the proper officer to provide reasons for doubting the declared value. The Tribunal concluded that the consent letter did not justify the enhancement of value without following the proper legal procedures. 4. Application of Customs Valuation Rules: The Tribunal emphasized that the Customs Valuation Rules must be applied sequentially, and the transaction value should be accepted unless there is evidence of misdeclaration or special circumstances. The Supreme Court in Eisher Tractors Ltd. and other cases reiterated that the transaction value should be the basis for assessment unless there are valid reasons to reject it. The Tribunal found that the department did not provide any contemporaneous import data or other material to justify the rejection of the declared value. 5. Authority of the Tribunal to Decide the Appeal Without Remanding: The appellant argued that the Tribunal, being the final fact-finding authority, could decide the appeal without remanding the matter. The Tribunal agreed, citing various judgments, and concluded that since the enhancement was not based on any contemporaneous import data and the invoice price was not disputed on any valid grounds, the enhancement was illegal and incorrect. The Tribunal set aside the impugned orders and allowed the appeals with consequential relief. Conclusion: The Tribunal found that the enhancement of the value of imported aluminum scrap based on the DGOV Circular was illegal and incorrect. The consent letter given by the appellant did not justify the enhancement without following the Customs Valuation Rules. The Tribunal set aside the orders of the lower authorities and allowed the appeals, emphasizing that the transaction value should be accepted unless there is valid evidence to reject it.
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