2023 (8) TMI 801 - AT - Customs

Improper rejection of the transaction value - adequacy and the relevance of NIDB data as well as other contemporaneous materials, relied upon by the department - HELD THAT - The decision in the matter of M/S. GIRA ENTERPRISES ANOTHER VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD 2014 (9) TMI 24 - SUPREME COURT relied upon by the Commissioner (Appeals) was in relation to an import which took place in 1994 and had discussed in detail, the Customs Valuation Rules, 1988. It is pertinent to note that in Customs Valuation Rules, 1988, Rule 10A which pertains to manner of rejection of declared value and which is quite akin to present Rule 12 was introduced only in the year 1998 vide Ministry of Finance (DR) Notification No. 10/98-Cus (NT) dated 19.02.1998, therefore, the judgment relied upon by the learned Commissioner (Appeals) for the impugned imports was irrelevant for the impugned import. It is found that while order-in-original had reproduced Rule 12 in the course of discussion but there is hardly emerging any material on record indicating why the rejection of transaction value of the importer was justified and whether any invoices or any other documents given by them, as were called upon from them were found to be unacceptable, if so the reasons thereon. The approach of rejecting transaction value, itself was incorrect and needed affording materials to the party - all other arguments relating to rejection of transaction value or NIDB data assumed insignificance at this stage, as rejection of transaction value itself by the department was requiring disclosure of material and reasons to the party. Matter remanded to the original adjudicating authority to decide rejection of transaction value afresh without being influenced by decision of Gira Enterprises, which was incorrectly relied upon by the learned Commissioner (Appeals) - appeal on remand.

Summary

Issues involved: Improper rejection of transaction value, relevance of NIDB data, adequacy of contemporaneous materials.

Summary:

Improper rejection of transaction value:
The learned advocate for the appellant raised concerns about the rejection of the transaction value and the relevance of NIDB data and other contemporaneous materials. The Authorized Representative justified the rejection by citing various provisions and referring to a previous decision. However, upon consideration, it was found that the decision relied upon was irrelevant as it pertained to an import from 1994, whereas the current Customs Valuation Rules were introduced in 1998. The order-in-original lacked sufficient reasoning for the rejection of the transaction value, and it was noted that a proper rejection of transaction value with detailed reasons is necessary under Rule 12 of the Customs Valuation Rules, 2007. The Tribunal concluded that the rejection of the transaction value was incorrect and required further explanation and material disclosure to the party. Therefore, the matter was remanded to the original adjudicating authority for a fresh decision on the rejection of the transaction value, without being influenced by the previous decision that was incorrectly relied upon.

Relevance of NIDB data and contemporaneous materials:
The arguments related to the rejection of NIDB data and other contemporaneous materials were deemed insignificant at this stage, as the primary issue of the improper rejection of the transaction value needed to be addressed first. The Tribunal emphasized the importance of providing proper reasoning and material when rejecting transaction value, rather than solely raising doubts without detailed explanation. The party was granted the opportunity to raise any other relevant pleas in the remanded proceedings.

This judgment highlights the necessity for a clear and justified rejection of transaction value in accordance with the Customs Valuation Rules, emphasizing the importance of providing detailed reasons and material evidence to support such rejections.