2024 (7) TMI 486 - AT - Customs

Valuation/undervaluation of imported goods - HCG 3MM Strip (Pregnancy Testing Strip) - retail packing versus bulk quantities - rejection of declared value - enhancement of value - HELD THAT - The fact that the goods are identical are not in dispute, the goods imported at Mumbai was for retail packing and that as against the bulk packets received at Bangalore and the quantitates also differed is not disputed. In the case of COMMISSIONER OF CUSTOMS, NEW DELHI VERSUS DM INTERNATIONAL 2013 (5) TMI 549 - CESTAT NEW DELHI , the Tribunal has held that 'It has been held in a number of decisions that NIDB data cannot be made the basis for enhancement of value. Commissioner (Appeals) has relied upon various decisions of the Tribunal for holding that any enhancement in assessment value, the transaction value has to be first rejected based on legal permissible ground as indicated in the Valuation Rules.' The transaction value can be rejected and enhanced only on the basis of same quantities, quality, are imported. In this case, it is very clear that the imported goods were at variance in quantity when compared with Mumbai and also the retail packing and bulk packing had influenced the price. Without considering these facts, the enhancement of value based on the fact that the goods were similar will not hold good. The impugned order is set aside - Appeal allowed.

Summary

Issues:
1. Undervaluation of imported goods leading to differential duty demand under Section 28 of the Customs Act, 1962.
2. Discrepancy in the declared value of goods imported at Bangalore compared to Mumbai.
3. Application of Customs Valuation Rules, specifically Rule 4, in determining the assessable value of imported goods.
4. Comparison of contemporaneous imports for assessing the transaction value.
5. Consideration of quantity, quality, and packaging in determining the assessable value of imported goods.

Analysis:
1. The case involved the appellant importing diagnostic devices, specifically HCG and LH strips, with a significant difference in declared values between the consignments at Mumbai and Bangalore. This led to a suspicion of undervaluation, prompting a detailed investigation and subsequent demand for additional duty under Section 28 of the Customs Act, 1962.

2. The appellant argued that the difference in value was not only due to packaging but also because the Mumbai consignment was for retail selling, incurring higher packaging costs, while the Bangalore imports were in bulk packets with lower packaging costs. They contended that the quantities and packaging differences justified the declared values. The appellant relied on a previous decision to support their claim.

3. The Authorized Representative for the Revenue supported the findings of the lower authorities, emphasizing the discrepancy in values and quantities between the Mumbai and Bangalore imports.

4. The Tribunal referred to previous judgments to establish the principles governing the rejection and enhancement of transaction values under the Customs Valuation Rules. It highlighted the importance of considering contemporaneous imports in terms of quality, quantity, and country of origin. The Tribunal emphasized that enhancement of value must be based on clear evidence and cannot be arbitrary.

5. Considering the facts presented, the Tribunal concluded that the imported goods differed in quantity and packaging between Mumbai and Bangalore. The Tribunal emphasized that the enhancement of value should be based on comparable quantities, quality, and packaging. As the discrepancies were significant, the Tribunal set aside the impugned order and allowed the appeal based on the principles established in previous judgments.

This detailed analysis of the judgment highlights the key issues, arguments presented by the parties, legal principles applied, and the ultimate decision reached by the Tribunal.