2024 (10) TMI 465 - AT - Customs

100% EOU - re-valuing the imported goods by adopting contemporary value of imports as per NIDB data after rejecting the declared values - relationship between the Appellant and supplier abroad - related party or not - HELD THAT - It is incumbent on the Department to show as to how the relation between the appellants and their overseas sellers has influenced and affected the prices. There is no evidence on the record to show that the values agreed upon between the importer and the exporter are not correct transaction values. This fact shows that there is no independent evidence with the Revenue to first reject the transaction values. Further, it is found that the original authority has clearly recorded the examination of the circumstances indicating that the relationship has not influenced the invoice price of the goods imported by the Appellant. It is a well-settled law that the transaction value has to be admitted as the assessable value unless proved to be incorrect. For such purpose, proving the value to be wrong, independent evidence is required and mere reference to NIDB data is not sufficient. It is held by various Courts that NIDB data cannot be made the sole basis for enhancement of the value. Tribunal has also considered similar issues in a number of earlier decisions and has held that adoption of NIDB Data, without any other evidence on record to establish the transaction value as incorrect, is not proper and justified. Thus, there is no justification for enhancement of the transaction value basing solely on the NIDB Data, that too without determining how the imported goods are comparable and contemporaneous in terms of quality, quantity and country of origin and other commercial factors which affect the transaction value. Neither there was any communication of the reasons to the Appellant as to how the declared transaction value is doubted in terms of the Customs Valuation Rules, 2007. The impugned order dated 24.12.2014 is set aside - Appeal allowed.

Summary

Issues Involved:
1. Whether the Revenue is justified in re-valuing the imported goods by adopting the contemporary value of imports as per NIDB data after rejecting the declared values.
2. Whether the relationship between the Appellant and the overseas supplier influenced the transaction value of the imported goods.
3. Whether reliance on NIDB data alone is sufficient to reject the declared transaction value.

Issue-wise Detailed Analysis:

1. Justification of Re-Valuation Using NIDB Data:
The primary issue in this appeal was whether the Revenue was justified in re-valuing the imported goods by adopting the contemporary value of imports as per NIDB data after rejecting the declared values. The Appellant argued that the original adjudicating authority had accepted the declared transaction value after confirming that the relationship between the Appellant and the supplier did not influence the price. The Tribunal found no independent evidence from the Revenue to reject the transaction values initially agreed upon between the importer and the exporter. It was emphasized that transaction value should be accepted unless proven incorrect, and mere reference to NIDB data is insufficient for such proof. The Tribunal cited previous decisions where reliance solely on NIDB data without additional evidence was deemed improper.

2. Influence of Relationship on Transaction Value:
The second issue was whether the relationship between the Appellant and the overseas supplier influenced the transaction value. The Customs Valuation Rules, 2007, particularly Rule 3(3), were crucial in this context. The Tribunal noted that the original authority had examined the circumstances and concluded that the relationship did not influence the invoice price of the imported goods. The Appellant provided evidence, such as invoices from unrelated suppliers, to demonstrate that the declared value was not influenced by the relationship. The Tribunal found no evidence from the Revenue to contradict this finding, reinforcing that transaction values should be accepted if the relationship does not influence the price.

3. Sufficiency of NIDB Data for Rejection of Declared Value:
The third issue was whether reliance on NIDB data alone was sufficient to reject the declared transaction value. The Tribunal reiterated that it is a well-settled law that transaction value must be admitted as the assessable value unless proven incorrect with independent evidence. The Tribunal highlighted several precedents where reliance solely on NIDB data was rejected. It was emphasized that for NIDB data to be used, the goods must be compared in terms of quality, quantity, country of origin, and other commercial factors. The Tribunal found that the Revenue did not establish how the imported goods were comparable to the contemporaneous imports cited in the NIDB data, nor was there any communication to the Appellant explaining why the declared transaction value was doubted.

Conclusion:
The Tribunal concluded that there was no justification for enhancing the transaction value based solely on NIDB data without determining the comparability of the imported goods in terms of quality, quantity, and other factors. The impugned order dated 24.12.2014 was set aside, and the appeal was allowed with consequential relief as per the law. The decision underscored the necessity for the Revenue to provide cogent evidence when challenging declared transaction values, particularly in cases involving related parties.