2023 (2) TMI 1038 - AT - Customs

Valuation of import goods - Alloy Wheels of motorcycles - rejection of declared value - redetermination of assessable value - market survey was actually conducted in the presence of the proprietor and as per the opinion given by the shopkeepers, the retail sale price was ascertained - HELD THAT - It is no doubt true that the value of the imported goods shall be the transaction value of such goods when the buyer and the seller of goods are not related and the price is the sole consideration, but this is subject to such conditions as may be specified in the rules to be made in this behalf. The Valuation Rules have been framed. A perusal of rule 12(1) indicates that when the proper officer has reason to doubt the truth or accuracy of the value of the imported goods, he may ask the importer to furnish further information. Rule 12(2) stipulates that it is only if an importer makes a request that the proper officer shall, before taking a final decision, intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared and provide a reasonable opportunity of being heard - Explanation 1(iii)(a) provides that the proper officer can have doubts regarding the truth or accuracy of the declared value if the goods of a comparable nature were assessed at a significantly higher value at about the same time. The very fact that the importer had agreed for enhancement of the declared value in the statements made under by section 108 of the Customs Act, itself implies that the importer had not accepted the value declared in the Bills of Entry. The value declared in the Bills of Entry, therefore, automatically stood rejected. Further, once the importer had accepted the enhanced value, it was really not necessary for the assessing authority to undertake the exercise of determining the value of the declared goods under the provisions of rules 4 to 9 of the Valuation Rules. This is for the reason that it is only when the value of the imported goods cannot be determined under sub-rule (1) of rule 3 for the reason that the declared value has been rejected under sub rule (2), that the value of the imported goods is required to be determined by proceeding sequentially through rules 4 to 9. However, in the present case, not only did the proprietor make a statement on April 27, 2017 that a market survey should be conducted, since the value and the retail price of the goods imported were not in consonance with the market price of such goods sold in the Indian market, but a market survey was actually conducted in the presence of the proprietor and as per the opinion given by the shopkeepers, the retail sale price was ascertained, which price was accepted to be correct by the proprietor in the statement made on April 27, 2017. When he was shown details of how the value was calculated, the proprietor admitted that it was based on the value ascertained during the market survey and agreed to pay the differential duty with interest. When the proprietor had admitted the re-determined value and also paid the differential duty with interest and penalty imposed by the competent authority, it is not open to the appellant to now contend, after goods have been cleared, that the market value could not have been re-determined - the value has been re-determined on the basis of the opinion given by the shopkeepers during the market survey, which value was accepted by the appellant. It is, therefore, not a case where only the statement of the proprietor has been relied upon. The provisions of section 111(m) of the Customs Act have been correctly invoked as the value of the goods imported by the appellant do not correspond with the value given by the appellant in the Bills of Entry. Appeal dismissed.

Summary

Issues Involved:
1. Contravention of principles of natural justice.
2. Re-determination of the retail sale price and assessable value.
3. Validity of statements made under section 108 of the Customs Act.
4. Justification for invoking section 111(m) of the Customs Act.

Detailed Analysis:

Contravention of Principles of Natural Justice:
The appellant argued that the order by the Additional Commissioner was in contravention of the principles of natural justice as copies of the statements, market enquiry report, and differential duty calculations were not supplied to them. However, the Tribunal noted that the market enquiry was conducted in the presence of the appellant, and the statements made under section 108 of the Customs Act were voluntarily accepted by the appellant. The adjudicating authority relied on the appellant's own statements, not on those made by others. Thus, the contention of contravention of natural justice was dismissed.

Re-determination of the Retail Sale Price and Assessable Value:
The Tribunal observed that the appellant had accepted the re-determined value of the goods during the market survey conducted in their presence. The assessable value was calculated based on the minimum base price of Aluminium from the London Metal Exchange, considering the weight of the consignment and the retail sale price found during the market survey. The appellant had agreed to this valuation in their statements dated April 27, 2017, April 28, 2017, and May 03, 2017. The Tribunal upheld the re-determined value as the appellant had voluntarily accepted it and agreed to pay the differential duty.

Validity of Statements Made Under Section 108 of the Customs Act:
The appellant claimed that the statements were given under duress and could not be relied upon without compliance with section 138B of the Customs Act. The Tribunal dismissed this argument, noting that the appellant had voluntarily accepted the market survey results and the re-determined value in their statements. The statements were made without any request for a show cause notice or personal hearing, implying voluntary acceptance of the re-determined value.

Justification for Invoking Section 111(m) of the Customs Act:
The Tribunal concluded that the appellant had willfully contravened the provisions of section 17(1) and 46(4) of the Customs Act by not declaring the correct retail sale price, making the goods liable for confiscation under section 111(m). The appellant's failure to declare the correct value rendered the goods liable for penalty under section 114A of the Customs Act. The Tribunal upheld the confiscation and penalties imposed, as the appellant had accepted the re-determined value and paid the differential duty.

Conclusion:
The Tribunal dismissed the appeal, upholding the order of the Commissioner (Appeals) which confirmed the re-determined assessable value, confiscation of goods, and imposition of penalties. The Tribunal found no contravention of natural justice and validated the re-determined value based on the appellant's voluntary acceptance during the market survey. The invocation of section 111(m) of the Customs Act was justified due to the appellant's incorrect declaration of the retail sale price.