2023 (8) TMI 1157 - AT - Customs

Valuation of imported goods - rejection of transaction value on the basis of certain NIDB data - HELD THAT - Rule 12 of Customs Valuation Rules, 2007 empowers proper officer to seek various invoices, in case the value is doubted by him. Such documents, inter alia, can be invoices, purchase order or any supporting contract and this depends upon whatever was duly given by the appellant. The decision in M/S. SARDA ENERGY AND MINERALS LTD. VERSUS CCE, RAIPUR 2017 (9) TMI 1142 - CESTAT NEW DELHI also requires if such documents are available, then it is for the Assessing Officer to indicate as to why he is not convinced, despite such documents and given reasons for the same - It is found that even if the waiver of SCN has been granted by the appellants in this case, still it was incumbent upon the authority passing the original order, to give its reason as to why the documentary evidence by way of invoice, packing list, Certificate of origin or whatever was available had to be rejected. The reasons in this case, are not available therefore, there is a breach of provision of Rule 12 of Customs Valuation Rules, 2007 - Appeal allowed.

Summary

Issues involved:
The rejection of transaction value based on NIDB data and resorting to Rule 12 of Customs Valuation Rule, 2007 without proper justification.

Issue 1: Rejection of transaction value and resort to Rule 12
The case involved the rejection of transaction value based on NIDB data and the department resorting to Rule 12 of Customs Valuation Rule, 2007 without providing adequate reasons. The appellant argued that the higher value was applied only in relation to the bill of entry during assessment. The department claimed that the appellant waived the show cause notice (SCN) and personal hearing. However, the department failed to provide sufficient justification for rejecting the transaction value and did not follow the procedures outlined in Rule 12. The Tribunal found that the assessing officer did not properly examine the contemporaneous import value and failed to provide valid reasons for rejecting the declared value. The Tribunal emphasized the importance of documentary evidence such as invoices, purchase orders, and supporting contracts in determining the assessable value. Despite the waiver of SCN by the appellant, the Tribunal held that the authority passing the original order should have provided reasons for rejecting the documentary evidence. As the reasons were not provided, the Tribunal concluded that there was a breach of Rule 12 of Customs Valuation Rules, 2007 and ruled in favor of the appellant.

Issue 2: Legal Precedent
The appellant relied on a previous judgment in the matter of Sarda Energy and Minerals Ltd Vs. Commr. C. EX, Raipur. The Tribunal examined the provisions of Rule 12, which allow for the rejection of declared assessable value. The Tribunal highlighted the requirement for the assessing officer to seek clarification from the importer and provide valid reasons for rejecting the declared value. The Tribunal emphasized that the assessable value must be determined by applying Section 14 read with Customs Valuation Rules, 2007, and that NIDB data should only serve as a guideline and not a substitute for the assessable value. The Tribunal concluded that the assessing officer in the present case did not properly examine the contemporaneous import value and failed to provide valid reasons for rejecting the declared value, leading to a breach of Rule 12.

This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the rejection of transaction value and the application of Rule 12 of Customs Valuation Rule, 2007. The Tribunal's analysis of the legal precedent and the procedural shortcomings in the department's actions are also outlined for clarity and understanding.