2020 (9) TMI 527 - AT - Customs

Valuation of imported goods - various kind of polyester knitted fabric of different weight and colour - rejection of declared value - enhancement of declared value - Commissioner (Appeals) allowed the appeal accepting the declared value - period 8 June, 2018 to 9 February, 2019 - HELD THAT - The assessing officer have been making enhancement in a routine manner and the respondent who are regular importers are left with no choice but to sign on the dotted line for taking delivery of their goods to carry on their business, and also save the demurrage charges if the consignment is delayed in the port for want of clearance. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Validity of enhancement made in declared value of imported goods.
2. Obligation of adjudicating authority to provide reasons for enhancement.
3. Applicability of Customs Valuation Rules in assessment.
4. Acceptance of enhanced value by importer.
5. Consideration of contemporaneous import data.
6. Right of importer to demand provisional assessment.
7. Impact of demurrage charges on importer's actions.

Issue 1: Validity of enhancement in declared value
The appeals were filed by Revenue against the Commissioner (Appeals) decision setting aside the enhancement made in the declared value of 57 Bills of Entry for the import of polyester knitted fabric. The appellant importer challenged the enhancement, citing the absence of proper rejection of declared value as required under Customs Act and Customs Valuation Rules. The Commissioner (Appeals) allowed the appeals, emphasizing that there is no estoppel in taxation matters and the importer has the right to challenge the enhanced value through appeal.

Issue 2: Obligation of adjudicating authority
The Commissioner (Appeals) observed that the adjudicating authority must pass a speaking order disclosing grounds for enhancement in declared value. It was noted that the authority had been routinely enhancing values without proper justification or comparison with contemporaneous imports, which was deemed incorrect. The Tribunal upheld the Commissioner's decision, emphasizing the need for a reasoned approach in enhancing declared values.

Issue 3: Applicability of Customs Valuation Rules
The Tribunal reiterated that imported goods must be assessed as per transaction value unless falling within exceptions in Customs Valuation Rules. The assessment should be adjusted in accordance with the provisions of the Rules, and the Customs authorities are obligated to assess duty based on transaction values, as per Rule 3 of the Customs Valuation Rules.

Issue 4: Acceptance of enhanced value by importer
The Revenue contended that the importer had agreed to enhancement of declared value in writing, forfeiting the right to show cause notice and personal hearing. The Tribunal noted that the importer's acceptance of re-assessment in writing, without demanding provisional assessment, precluded later grievances regarding assessment based on the amended declared value.

Issue 5: Consideration of contemporaneous import data
The Revenue argued that the importer had accepted the enhancement after seeing contemporaneous import data, which was not discussed in assessment orders but was referred to in the importer's letter of acceptance. The Tribunal held that the proper officer need not issue a speaking order if the importer confirms acceptance of re-assessment in writing.

Issue 6: Right of importer to demand provisional assessment
The Revenue contended that the importer did not exercise the right to demand provisional assessment, despite the option available under Section 17(5) of the Act. The Tribunal emphasized that what is admitted need not be proved, relying on relevant legal precedents.

Issue 7: Impact of demurrage charges
The importer argued that they were under pressure to accept delivery of goods to avoid demurrage charges, as the adjudicating authority was reluctant to grant provisional assessment promptly. The Tribunal acknowledged the challenges faced by importers in such situations and upheld the impugned order, considering the practical difficulties importers encounter in clearance processes.

In conclusion, the Tribunal dismissed the appeals by Revenue, upholding the Commissioner (Appeals) decision to set aside the enhancement in declared value of imported goods, emphasizing the importance of reasoned assessment and adherence to Customs Valuation Rules.