2023 (8) TMI 1331 - AT - Customs

Valuation of imported goods - cosmetics , branded as TYA - enhancement of value - non-compliant with Legal Metrology (Packaged Commodities) Rules, 2011 as well as Drugs and Cosmetics Act, 1940 - HELD THAT - It is clear from the impugned order that the appellant is a regular importer; indeed, consignments imported in the past were taken up for detrimental action in the impugned proceedings. Market survey was also undertaken. Though it was submitted by the appellant that the market survey occurred behind their back, it is found from record of proceedings before the lower authority that the contents of the report had not been disputed. Learned Counsel contended that values of earlier imports are clearly ascertainable. However, no details were furnished - It would only be appropriate for such evidence to be furnished and for the adjudicating authority to cause verification of prices at which these were actually sold - it is directed that fresh adjudication to be made. The matter is remanded to the original authority for re-determination on the facts pertaining to earlier imports to be furnished by the appellant.

Summary

Issues involved:
Proceedings under section 28 of Customs Act, 1962 initiated against the appellant for undervaluation and non-compliance with Legal Metrology Rules and Drugs and Cosmetics Act. Challenge against impugned order rejecting declared value and ordering duty payment, interest, and penalties. Treatment of imported goods from China and application of Customs Valuation Rules in determining assessable value.

Summary:

1. Undervaluation and Non-compliance:
The appellant, M/s SR Traders, faced proceedings under section 28 of Customs Act, 1962 for undervaluation and non-compliance with Legal Metrology Rules and Drugs and Cosmetics Act. The impugned order rejected the declared value and enhanced the assessable value for levy of duty, interest, and penalties. The live consignment was permitted to be redeemed upon confiscation under Customs Act, 1962. The appellant challenged the order, including penalties imposed under various sections of the Customs Act.

2. Treatment of Imported Goods:
The impugned goods, imported from M/s Shantou Jiadili Cosmetics Co Ltd, China, were subjected to the same treatment in the order based on a market survey by customs officers. The rejection of declared prices due to abnormally low prices was justified, leading to re-determination of assessable value. The appellant argued that the treatment was not consistent with the Customs Act, 1962, specifically section 14.

3. Application of Customs Valuation Rules:
The appellant contended that the market inquiry was conducted without their knowledge, and the computation lacked supporting documentation for the prices adopted. Reference was made to previous Tribunal decisions regarding the sequential application of alternatives in Customs Valuation Rules. The Tribunal directed fresh adjudication based on the submissions made by the appellant.

Conclusion:
The Tribunal remanded the matter to the original authority for re-determination based on the facts pertaining to earlier imports to be furnished by the appellant. The sequential application of Customs Valuation Rules and the need for supporting documentation in determining assessable value were emphasized. The decision highlighted the importance of following prescribed rules and procedures in customs valuation matters.