2022 (2) TMI 633 - AT - Customs

Valuation of imported goods - Fresh Orchid Cut Flowers - enhancement of value - furnishing of NIDB data or not - speaking order in terms of Section 17(5) of the Customs Act, 1962 - Applicability of Rule 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - HELD THAT - There is no such clear admission by the appellant and the so-called consent is also limited to the flower consignment imported by them with effect from the date of the letter; but however, the same was also subject to the final outcome of the decision in respect of the appeals filed by them, which means that their challenge to the adoption of the enhanced value was pending in appeal as on the date of the said letter. Vide Orders-in-Appeal, the First Appellate Authority had termed as unsustainable and set aside vide orders passed on 27.03.2013 and 29.05.2013. By this, it is evident that the so-called consent letter was not a blank cheque to be adopted universally and for all the imports the appellant could ever make. The authorities have nowhere given any acceptable reasons as to why they jumped to adopt Rule 4 ibid. and the valuation prescribed thereunder, instead of following the Rules sequentially. From the records, nowhere it is seen that the appellant was furnished with the NIDB data or whatsoever that was relied upon for enhancement of the value, for rebuttal, which is clearly in violation of the principles of natural justice. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Valuation of imported goods under Rule 4 of Customs Valuation Rules.

Analysis:
The judgment revolves around the dispute regarding the valuation of imported 'Fresh Orchid Cut Flowers' by the appellants. The Customs Officer rejected the declared value of US$ 0.03 per stem and enhanced it to US$ 0.07 per stem. The Commissioner of Customs (Appeals) found the assessing authority's action arbitrary and bad in law, setting aside the assessment orders for 30 Bills-of-Entry. Similarly, for 10 Bills-of-Entry, the Commissioner (Appeals) passed the same remand order. In the subsequent round of litigation, the Original Authority noted the importer's consent letter agreeing to the enhanced valuation, which was deemed in compliance with Rule 4 of the Customs Valuation Rules.

The appellant, dissatisfied with the decision, filed another appeal, but the Commissioner (Appeals) rejected it, citing the appellant's consent to the enhanced value. During the proceedings, both parties presented their arguments, and the Tribunal scrutinized the contentions and the 'consent letter' dated 07.02.2013. The Tribunal highlighted that the consent was limited to the flower consignment imported post the letter's date and subject to the pending appeal challenging the enhanced value adoption. The Tribunal emphasized that the consent letter was not a blanket approval for all future imports by the appellant.

Moreover, the Tribunal criticized the authorities for not providing valid reasons for directly adopting Rule 4 of the Customs Valuation Rules instead of following the sequential valuation process. It was noted that the appellant was not given the opportunity to rebut the NIDB data relied upon for enhancing the value, violating principles of natural justice. The Tribunal also questioned the authorities' failure to justify why the declared value of US$ 0.03 per stem was not accepted and why contemporaneous import data from other similar importers was not considered.

Ultimately, the Tribunal concluded that the impugned order was unsustainable and set it aside, allowing the appeal with any consequential benefits as per the law. The judgment highlighted the importance of following due process, providing justifications for valuation decisions, and ensuring the principles of natural justice are upheld in customs valuation disputes.