2023 (9) TMI 792 - AT - Customs

Valuation - Validity of findings of SVB - Matter remanded back to original authority for fresh adjudication - Non-examination of documents properly - unexplained variances found - necessity to examine balance sheet - HELD THAT - It is evident that facts would have to be ascertained and the only available options for the first appellate authority were to call for the balance sheet and ascertain veracity of the elements or to have such exercise undertaken. That the latter was preferred is not without jurisdictional competence and setting aside of order is pre-requisite for such re-consideration - this remand is not found to be contrary to the decisions in re DJ Malpani 2007 (10) TMI 410 - BOMBAY HIGH COURT or in re Dell International Services India (P) Ltd 2016 (5) TMI 114 - KARNATAKA HIGH COURT and the only issue for consideration here is only prejudice the appellant herein arising from remand. The communication that started the dispute was not rendered within the framework of a show cause notice and any action to the detriment of an importer must comply with section 17 or section 18 of Customs Act, 1962; likewise, any recovery will take recourse to section 28 of Customs Act, 1962 with show cause notice as pre-requisite. The findings of the Special Valuation Branch (SVB) are not binding on proper officer exercising such statutory powers and no action, unless initiated under the cited provisions, can be detrimental to the appellant herein - there are no prejudice thereby as appellant has not brought on record that any particular import to be assessed, provisionally or finally, will be impacted by mere ascertainment of the details furnished by the importer and, that too, only by reference to their own record. The order of first appellate authority need not be interfered - appeal dismissed.

Summary

Issues involved:
The issues involved in the judgment are the challenge against the remand directed by the Commissioner of Customs (Appeals), Mumbai-I, regarding the correctness of the price in view of supply agreements, market conditions, profit margins, and expenses connected to manufacturing and marketing. The appeal also addresses the acceptance of transaction value based on the sale of goods to unrelated buyers in India, the remand directed by the first appellate authority, and the jurisdictional competence of the remand.

Issue 1: Challenge against the remand directed by the Commissioner of Customs (Appeals):
The appeal by M/s GlaxoSmithKline Asia Pvt Ltd challenges the remand directed by the Commissioner of Customs (Appeals), Mumbai-I, based on the appellant's objection regarding the examination of balance sheets to ascertain the correctness of transportation charges, manufacturing overheads, promotional expenses, selling & distribution costs, and profit. The Tribunal upheld the remand decision, emphasizing the need for the Original Authority to reexamine the objection raised by the appellant and pass a fresh order after considering additional submissions. The appellant contested the jurisdiction of the first appellate authority to issue the remand, arguing that it was not within their purview to do so.

Issue 2: Acceptance of transaction value and remand for verification:
The dispute involved an agreement between M/s GlaxoSmithKline Asia Pvt Ltd and M/s GlaxoSmithKline Biologicals SA, Belgium for the import of vaccines. The Special Valuation Branch (SVB) had accepted the declared value, but subsequent appeals and orders necessitated a fresh examination of the issue. The first appellate authority was directed to consider the correctness of the elements in the computation furnished by the importer, specifically focusing on transportation charges, manufacturing overheads, promotional expenses, selling and distribution costs, and profit margins. The Tribunal emphasized the need for the first appellate authority to verify the data from the balance sheet to ensure the accuracy of the transaction value, leading to the remand for further verification.

Issue 3: Jurisdictional competence and compliance with Customs Act provisions:
The Tribunal considered the jurisdictional competence of the first appellate authority in issuing the remand order. It was highlighted that any action to the detriment of an importer must comply with specific provisions of the Customs Act, 1962, such as section 17, section 18, and section 28. The findings of the Special Valuation Branch were deemed non-binding on the proper officer, and any recovery actions must adhere to the statutory requirements, including the issuance of show cause notices. The Tribunal found no prejudice to the appellant due to the remand, as no specific import assessments were shown to be impacted solely by the verification of details provided by the importer.

In conclusion, the Tribunal dismissed the appeal, finding no grounds for interference in the order of the first appellate authority. The judgment emphasized the importance of verifying the elements of the transaction value and ensuring compliance with the provisions of the Customs Act, 1962.