2009 (6) TMI 354 - AT - Customs

Valuation - Appellants states that the reduction in the value of the exported consignment by the Customs authorities and consequently reduction in the drawback amount is not justified. He states that the samples from the consignment were not taken - impugned adjudication order gives the basis of determination of the value which has taken average price of two comparable brands allowed 10% rate discount and added 20% towards profit margin interest transportation etc. to arrive at FOB value for drawback purposes - As such the valuation done by the authorities below as a result of investigation by the Special Investigation Branch cannot be said to be arbitrary. - Moreover the Customs authorities have used the price of two comparable brands to make such determination after allowing trade discount profit margin etc. Hence we are of the view that the valuation done by the lower authorities is in order and the same needs no interference and therefore the appeal is rejected.

Summary

Issues: Valuation of exported goods for drawback purposes

Analysis:
The judgment by the Appellate Tribunal CESTAT, Kolkata involved the issue of the valuation of exported goods for drawback purposes. The appellant contested the reduction in the value of the exported consignment by Customs authorities, leading to a decrease in the drawback amount. The appellant argued that the reduction was unjustified as samples were not taken from the consignment and cited a previous Tribunal decision in support of their case.

The Tribunal considered the arguments presented by both sides. It was noted that Customs authorities had determined the value of the impugned goods based on a rational basis, not only for the appellant but also for another company. The valuation was done by taking the average price of two comparable brands, allowing a 10% rate discount, and adding 20% for profit margin, interest, transportation, etc., to arrive at the FOB value for drawback purposes. This resulted in a marginal reduction in the declared FOB value of the appellant by 17%, leading to a lower drawback amount.

The Tribunal found that the valuation conducted by the Customs authorities was not arbitrary, as it was the result of an investigation by the Special Investigation Branch. It was also noted that during the personal hearing before the adjudicating Commissioner, the appellant did not provide substantial arguments beyond the absence of sample drawing during goods examination. The Tribunal emphasized that over-valuation of exported goods is unsustainable without positive and tangible evidence, which was lacking in the present case. The Customs authorities had conducted necessary inquiries and determined the value of the goods on a rational basis, using the prices of comparable brands after allowing for trade discounts and profit margins.

Ultimately, the Tribunal concluded that the valuation done by the lower authorities was appropriate and required no interference. Therefore, the appeal was rejected, and the decision was pronounced in the open court by the Members of the Tribunal.