2022 (1) TMI 363 - AT - Customs

Valuation of imported goods - loading of 10.5% to the assessable value under rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - interpolation of extraneous and unverifiable facts - HELD THAT - The issue in dispute pertains to the three agreements against which payments were to be made to the overseas entity in terms of net sales of the final product. According to Learned Counsel, none of the agreements had incorporated condition which would validate the invoking of rule 10 of the said Rules. It was also pointed that they had furnished the value of goods imported from the related supplier as also the value of those from unrelated suppliers and, for each year between 2012-13 and 2015-16, ranged from 44.42% to 45.07% despite which the first appellate authority has, by referring to ₹ 9.80 crores of import from related suppliers, held those to be 87.5% of the procurement. The decision of the first appellate authority has been based on foundations which remain unverifiable and is of indeterminate origin. In these circumstances, it would be appropriate for the matter to be heard afresh by the first appellate authority for decision after consideration of all the submissions by the appellant - Appeal allowed by way of remand.

Summary

Issues Involved:
Interpolation of extraneous facts distorting findings in the impugned order under rule 10 of Customs Valuation Rules, 2007.

Analysis:
The dispute in the case of M/s Oerlikon Balzers Coating India Pvt Ltd revolves around the interpolation of extraneous and unverifiable facts in the impugned order, which distorted the findings related to the loading of 10.5% to the assessable value under rule 10 of Customs Valuation Rules, 2007. The limited issue is whether the impugned order correctly applied the rule and whether the findings were based on verifiable information. The appellant argued that the agreements in question did not contain conditions validating the application of rule 10. The appellant also highlighted discrepancies in the calculation of import values from related suppliers, emphasizing that the first appellate authority's conclusions were based on misinterpretation of the information provided.

The Tribunal, comprising HON’BLE MR C J MATHEW and HON’BLE MR AJAY SHARMA, considered the arguments presented by the Learned Authorised Representative and the appellant. It was observed that the issue in dispute pertained to agreements where payments were based on 'net sales' of the final product. The appellant contended that the first appellate authority's decision was based on unverifiable foundations and misinterpretation of the information submitted. The Tribunal found that the conclusions drawn by the first appellate authority were questionable and lacked verifiable evidence. Consequently, the Tribunal decided to set aside the impugned order and remand the matter back to the first appellate authority for a fresh hearing and decision after considering all submissions made by the appellant.

In conclusion, the judgment by the Appellate Tribunal CESTAT MUMBAI focused on the critical issue of interpolation of extraneous facts distorting findings in the impugned order under rule 10 of Customs Valuation Rules, 2007. The decision highlighted the importance of verifiable evidence and proper interpretation of information in customs valuation disputes. The remand of the matter back to the first appellate authority signifies the need for a thorough reevaluation of the case based on accurate and substantiated facts to ensure a just and fair outcome.