2023 (3) TMI 137 - AT - Customs

Valuation of imported goods - prime cold rolled sheets (non-alloy) - enhancement of assessable value - rejection of declared value, by recourse to rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - HELD THAT - The impugned goods are cold rolled coils of non-alloy steel and cold rolled sheets of non-alloy steel from Ukraine backed with documentation for value of US 530 and US 517 per MT (CF). For coils, the price indicated in the Metal Bulletin of 10th September 2012 was adopted as the base on the finding that these, on FOB terms, is common across CIS countries; no evidence is at hand for concluding that these are not local market prices in Ukraine - The allowance for quantity at 4.5% is equally cryptic, as also the further abatement for not being coil, assigned to sheets. The addition of US 50 per MT towards freight is not compatible with the corresponding provision in Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 especially as actual freight was easily ascertainable. The arbitrariness of the computation is sufficient to discredit the confirmation of enhancement by resort to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 in the impugned order. That assessable values of contemporaneous imports are said to be available and, indeed, claimed to be basis of rejection by empowerment in rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 renders resort to a later option to be travesty of the valuation mechanism prescribed by law. The original authority should have placed the importer on notice of those very contemporaneous imports that were invoked as prelude to enhancement of assessable value. The impugned order is set aside and matter remanded back to the original authority for a fresh decision hearing.

Summary

Issues:
Challenge to the rejection of declared values for imported goods; Application of Customs Valuation Rules, 2007; Compliance with statutory provisions in determining value; Inconsistencies in declared values and contemporaneous imports; Arbitrariness in computation of assessable values; Discrepancies in pricing and exchange rates; Reliance on Public Ledger for valuation; Discrepancies in application of valuation rules.

Analysis:
The case involves a challenge to the rejection of declared values for imported goods by M/s Arya Ship Breaking Pvt Ltd. The original authority rejected the declared values based on the Customs Valuation Rules, 2007, specifically invoking rule 12 due to lack of acceptable documentary evidence in response to queries. The issue revolves around the survival of the impugned order, with the appellant seeking restoration of declared values. The declared values for 'prime cold rolled coils' and 'prime cold rolled sheets' were contested, with customs authorities citing inconsistencies with contemporaneous imports and Metal Bulletin prices. The original authority justified invoking rule 12 for redetermination of values under Customs Valuation Rules, 2007.

The appellate authority endorsed the redetermination, emphasizing the unavailability of clearances for identical or similar goods under rules 4 and 5. However, discrepancies in pricing, exchange rates, and reliance on Public Ledger were noted, indicating a lack of thorough consideration in the valuation process. The arbitrariness in the computation of assessable values, including abatements and additions without empirical support, raised concerns about the validity of the enhancement under rule 9 of the Customs Valuation Rules, 2007.

The judgment highlighted the need for a fresh decision by the original authority, setting aside the impugned order due to defects in the valuation process. The lack of proper notice to the importer regarding contemporaneous imports, discrepancies in valuation methodology, and reliance on questionable sources necessitated a reevaluation of the case. The ruling aimed to rectify the inconsistencies and arbitrariness in the computation of assessable values, ensuring compliance with statutory provisions and fair valuation practices.

In conclusion, the judgment focused on the procedural irregularities and valuation discrepancies in the case, emphasizing the importance of adhering to the Customs Valuation Rules, 2007, and ensuring transparency and accuracy in determining the value of imported goods.