2021 (5) TMI 335 - AT - Customs

Valuation of imported goods - enhancement of value on the basis of NIDB data alone - HELD THAT - The issue here is no longer res-integra. Under similar facts and circumstances on import of similar goods by the CC, ICD, NEW DELHI VERSUS M/S VSM IMPEX PVT LTD 2018 (12) TMI 389 - CESTAT CHANDIGARH , this Tribunal referring to Section 17(5) read with Section 17(4), concluded that the adjudicating authority is required to pass a speaking order within fifteen days of the re-assessment of the Bills of Entry. Section 17(5) does not make any whisper that the assessee/ importer is required to make a request or to seek an order under Section 17(5) of the Act. Further, this Tribunal observed that the reliance placed by Revenue on the ruling of M/S. ADVANCED SCAN SUPPORT TECHNOLOGIES VERSUS C.C., JODHPUR 2015 (11) TMI 31 - CESTAT NEW DELHI and VIKAS SPINNERS VERSUS COMMISSIONER OF CUSTOMS, LUCKNOW 2000 (11) TMI 196 - CEGAT, COURT NO. IV, NEW DELHI , that in these decisions, there is no issue of passing an order under Section 17(5) of the Act, after passing of Bills of entry within fifteen days, hence these decisions are distinguishable and not applicable. In the facts and circumstances of this case there is failure on the part of the customs officer, by not following the laid down Customs procedure, particularly procedure of assessment as laid down. They have orally denied to pass an order of provisional assessment and have further used undue influence and have practically compelled the respondent importer to agree to dictates and agree for enhancement of the declared value, trying to giving total go by to the provisions of Section 17(4) read with 17(5) of the Act. The respondent importer is entitled to consequential benefit, if any, in accordance with law - Appeal dismissed.

Summary

Issues Involved:
1. Whether the enhancement of value of imported goods based on NIDB data alone by the Adjudicating Authority is legally sustainable.
2. Whether the acceptance of enhanced value by the importer under duress to avoid demurrage precludes them from challenging it.
3. Whether the assessing authority was required to pass a speaking order disclosing the grounds for rejecting the declared value.
4. Whether the importer's written acceptance of the enhanced value negates the need for a speaking order under Section 17(5) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Enhancement of Value Based on NIDB Data:
The respondent, M/s Manavi Exim Pvt. Ltd., imported various kinds of Polyester Knitted fabrics and filed four Bills of Entry based on self-assessment of duty amounting to ?15,64,584/-. The Deputy/Assistant Commissioner of Customs, ICD Piyala, reassessed these at a higher value, resulting in a total duty of ?28,51,047/-, creating a differential duty of ?12,86,463/-. The Commissioner of Customs (Appeals) set aside the re-assessment at enhanced value, restoring the assessment at the declared value. The Commissioner (Appeals) held that uniform enhancement of value solely based on NIDB prices is not legally sustainable, and the orders lacked mention of contemporaneous import data specifics.

2. Acceptance of Enhanced Value Under Duress:
The respondent importer argued that the acceptance of the enhanced value was to save demurrage and detention charges, which does not preclude them from challenging the enhancement. The Commissioner (Appeals) supported this, citing that there is no estoppel in taxation matters. The respondent had requested provisional release of goods and a speaking order against re-assessment, indicating that the acceptance was under undue influence.

3. Requirement of a Speaking Order:
The Commissioner (Appeals) found that the assessing authority was required to pass a speaking order, disclosing the grounds for rejecting the declared value and resorting to loading and enhancement. The declared value can only be rejected based on reasonable and cogent evidence, and the Revenue should discharge the heavy burden of proving that the invoice value does not represent the transaction value in the international market. The Tribunal upheld this view, emphasizing the requirement of a speaking order under Section 17(5) of the Customs Act, 1962.

4. Importer's Written Acceptance and Section 17(5):
The Revenue argued that the importer's written acceptance of the enhanced value negates the need for a speaking order under Section 17(5). However, the Tribunal found that the customs officers failed to follow the laid down procedures, particularly the assessment procedure. The Tribunal concluded that the customs officers used undue influence, compelling the respondent importer to agree to the enhanced value, thus bypassing the provisions of Section 17(4) read with 17(5) of the Act.

Conclusion:
The Tribunal dismissed the Revenue's appeals, finding that the customs officers did not follow the proper procedures and used undue influence on the respondent importer. The respondent importer is entitled to consequential benefits in accordance with the law. The Tribunal's decision emphasized the importance of adhering to the procedural requirements under the Customs Act, 1962, particularly the need for a speaking order when reassessing the declared value of imported goods.