2023 (10) TMI 508 - AT - Customs

Valuation of imported goods - Wet Dates - rejection of declared value based on NIDB data of similar/ identical goods - enhancement of value of the imported goods without passing any speaking order - violation of principles of natural justice - HELD THAT - In the instant case the Commissioner (Appeals) while accepting the departmental appeal against the order which was in favour of the appellant erred by not considering various legal requirements. The proper officer was required to indicate the basis of his reasonable doubts about the truth for the accuracy of the value that was declared and also as to why he was not satisfied with transaction value indicated by the appellants. Further the Commissioner (Appeals) did not address the issue that re-assessment under Section 17(4) of the Customs Act, 1962 was done without assigning any reason and without taking consent in writing from aggrieved appellants. Further while agreeing with the re-assessment done by the proper officer, Learned Commissioner (Appeals) has failed to appreciate that the proper officer had not passed any order indicating as to why the NIDB data should be accepted by the party and which one in particular and why transaction value was rejectable. The reliance on the decision of UNITED COPIER SYSTEMS VERSUS COMMISSIONER OF CUSTOMS, DELHI-III 2009 (7) TMI 973 - CESTAT, NEW DELHI and RAKESH KUMAR AGARWAL VERSUS COMMISSIONER OF CUSTOMS, TUTICORIN 2008 (7) TMI 738 - CESTAT, CHENNAI by the appellants has been correctly placed in which it has been properly laid down that without putting before the party, the NIDB data for rebuttal and without bringing cogent evidence and reasons, transaction value cannot be rejected. It has been properly appreciated and relied upon by the original authority. Further we find that the adjudicating authority has also correctly pointed out that the misdeclaration can also be the basis for rejection of transaction value, but the same is absent in the instant case. Further, there are force in various cases law cited by the appellants as well as relied upon by the original authority that sanctity cannot alone be placed on NIDB data for rejecting invoice value. The rejection of transaction value even when based upon NIDB data cannot be done without disclosing materials, as well as identical nature of the goods, and transaction value rejecting through reasoned order. In absence of the same on the part of proper office rejection of transaction value without complete disclosures is invalid. There is nothing on record to indicate that the proper officer having doubted the transaction value on the basis of NIDB data, sought any further information from the appellant/importer by way of documents or evidence or even in the absence of such information had applied its mind to the truth or accuracy of the value declared as per above requirement - The truth or accuracy and communication of the same even when requested at the de novo remand stage of litigation by the appellants importers. Further it is also for the proper officer to given opportunity of hearing before deciding transaction value in terms of Valuation Rules 2007. What has been desired by settled law is woefully lacking in the present proceeding, while rejecting transaction value. Rejection is therefore improper - Appeal allowed.

Summary

Issues Involved:

1. Re-assessment of Bills of Entry without passing a speaking order.
2. Legality of the Commissioner (Appeals) setting aside the Assistant Commissioner's re-assessment orders.
3. Rejection of transaction value based on NIDB data without proper procedure.

Summary:

1. Re-assessment of Bills of Entry without passing a speaking order:

The appellants imported Wet Dates and filed Bills of Entry, which were re-assessed by customs officers by enhancing the value without passing any speaking order, violating Section 17(5) of the Customs Act, 1962. The Commissioner (Appeals) remanded the matters back to the Assistant Commissioner for passing a speaking order.

2. Legality of the Commissioner (Appeals) setting aside the Assistant Commissioner's re-assessment orders:

The Assistant Commissioner, upon remand, re-assessed the Bills of Entry on declared transaction value. The Principal Commissioner appealed against these re-assessment orders, and the Commissioner (Appeals) allowed the department's appeals, setting aside the Assistant Commissioner's orders without providing specific orders of assessment, which was contested by the appellants as erroneous and cryptic.

3. Rejection of transaction value based on NIDB data without proper procedure:

The appellants argued that the Commissioner (Appeals) failed to provide data or opportunity to explain price differences and incorrectly accepted NIDB data without proper inquiry or evidence. The Tribunal found that the proper officer did not indicate the basis of reasonable doubts or why the transaction value was unsatisfactory. The Commissioner (Appeals) erred by not addressing the procedural requirements under Rule 12 of the Customs (Determination of Value of Imported Goods) Rules, 2007, and the Apex Court's mandates in CENTURY METAL RECYCLING PVT. LTD Vs. UNION OF INDIA.

The Tribunal emphasized that the rejection of transaction value based on NIDB data must be supported by cogent evidence and reasons, and the proper officer must follow the procedural requirements, including providing reasons for doubt, seeking further information, and giving the importer an opportunity to be heard. The Tribunal set aside the impugned order and restored the Order-In-Original, allowing the appeals.