2024 (10) TMI 840 - AT - Customs

Valuaton of imported goods - rejection of declared value - huge variation between the declared value and the value of the similar goods as per NIDB database - redetermination of value in terms of Rule 5 of Customs Valuation (Determination of value of Imported Go ods) Rules, 2007 - no import data available for the import of identical goods to decide the value under Rule 4 - HELD THAT - There are no disputes as regards the relationship between the appellant and the supplier abroad; they are independent entities. It is the well settled position of law that the transaction value cannot be thrown out unless proved incorrect; such assertion has to be made not on assumptions or surmises, but based on evidences. In case, mere reliance on NIDB data alone to reject the declared value is insufficient, it is held by various Benches of CESTAT that mere adoption of NIDB data without there being any other evidence in support to reject the transaction/declared value as unacceptable, is not justified. The rejection of declared value based on NIDB data by the AA which was upheld by the FAA vide impugned order is unsustainable and is set aside - appeal allowed.

Summary

Issues:
1. Rejection of declared value under Rule 12 of Customs Valuation Rules.
2. Proper application of Rule 12(1) of Customs Valuation Rules.
3. Availability of import data for determining value under Rule 4.
4. Admissibility of NIDB data for rejecting declared value.
5. Requirement of evidence to reject declared value.
6. Legal position on rejecting transaction value based on NIDB data.
7. Justification of rejecting declared value solely based on NIDB data.

Analysis:
The judgment addresses the issue of the rejection of the declared value under Rule 12 of the Customs Valuation Rules. The original authority rejected the declared value due to a significant variation with the NIDB database, invoking Rule 12. However, the tribunal found that there was no explicit reason provided to doubt the accuracy of the declared value, as required by Rule 12(1). The tribunal emphasized that the proper officer must have a valid reason, supported by evidence, to reject the declared value and that such reasons must be shared with the importer for a fair opportunity to present evidence in support of the declared value.

Furthermore, the tribunal highlighted the importance of providing import data for similar goods under Rule 4 for determining the value of imported goods. The appellant argued that they were not given access to the alleged contemporaneous import data for effective rebuttal, citing a decision of the Apex Court. The tribunal stressed the necessity of sharing relevant data with the importer to ensure a transparent and fair valuation process.

The judgment also discussed the admissibility of NIDB data for rejecting the declared value. It was established that mere reliance on NIDB data alone is insufficient to reject the declared value. The tribunal cited previous decisions to support the position that rejecting the transaction value based solely on NIDB data without additional evidence is not justified. The tribunal referenced specific cases to reinforce this legal principle.

Ultimately, the tribunal concluded that the rejection of the declared value based on NIDB data was unjustified and unsustainable. The decision to uphold the rejection was set aside, and the appeal was allowed with consequential benefits as per the law. The judgment emphasizes the importance of providing valid reasons and evidence to reject declared values and the inadmissibility of solely relying on NIDB data for valuation purposes.