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2009 (10) TMI 480 - AT - CustomsJurisdiction for assessment - The appellant is a 100% subsidiary of Carl Zeiss Meditec AG Germany which imports from group companies based in several foreign countries medical equipment such as Surgical Operating Microscope Angiograph equipment Metrological equipment and spares of such equipment. Appointment of Assistant Commissioner as officer of custom for the Area specified under notification. Held that- Assistant Commissioner or Deputy Commissioner of Customs Chennai is not competent to determine the value of goods imported through ICD Bangalore.
Issues Involved:
1. Jurisdiction of the Special Valuation Branch (SVB) officers of Chennai Customs House. 2. Validity of the enhancement of the declared value by 30%. 3. Applicability of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Detailed Analysis: 1. Jurisdiction of the Special Valuation Branch (SVB) Officers of Chennai Customs House: The appellants challenged the jurisdiction of the SVB officers of Chennai Customs House to assess the value of goods imported through Bangalore. They argued that under Notification No.15/2002 (NT) dated 7.3.2002, the appointed officers of Chennai Customs House did not have jurisdiction over imports taking place outside the specified area, which did not include Bangalore. The Tribunal agreed, citing the Apex Court judgment in *Union of India vs. Ram Narain Bishwanath* [1997 (96) E.L.T. 224 (S.C.)], which held that valuation jurisdiction lies with the Customs authorities in whose territorial jurisdiction the goods were imported. Additionally, the Tribunal referenced the Karnataka High Court decision in *Devilog Systems India vs. Collector of Customs, Bangalore* [1995 (76) E.L.T. 520 (Kar.)], affirming that the Assistant Collector (IAD), Madras had no jurisdiction for assessment of goods imported through ICD, Bangalore. The Tribunal concluded that the orders by the SVB officers of Chennai Customs House were non est (null and void) for lack of jurisdiction. 2. Validity of the Enhancement of the Declared Value by 30%: The appellants contended that the enhancement of the declared value by 30% was unjustified. They argued that the price at which goods were invoiced to them was lower than the sale price to direct customers due to the commission payable to the appellants. The Tribunal noted that the original authority had merely followed the SVB orders from Chennai Customs House, which were not applicable due to jurisdictional issues. The Tribunal also referenced the decision in *Commissioner of Customs, Chennai vs. Hewlett Packard Ltd.* [1999 (108) E.L.T. 221 (Tri.)], which held that discounts given to related buyers as part of their marketing policy did not amount to the price being influenced by the relationship. The Tribunal found that the original authority had not demonstrated that the relationship between the appellant and suppliers had influenced the price, as required under Rule 3(3)(a) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 3. Applicability of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007: The appellants argued that the valuation should be governed by the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, which introduced the concept of 'transaction value' and removed 'deemed value'. They contended that the list price could not constitute the basis for value for assessment as it did not represent the transaction value. The Tribunal agreed, noting that the SVB orders from 2003 and 2006 could not be validly applied to imports made in 2008 due to the changes in the valuation rules introduced in 2007. The Tribunal emphasized that the proper officers for assessment of goods imported through ICD, Bangalore were those specified in the relevant notification, and not the officers from Chennai Customs House. Conclusion: The Tribunal remanded the matter to the original authority for a fresh decision on merits, ensuring that the appellants are afforded an adequate opportunity to present their case. The Tribunal ruled that the SVB orders from Chennai Customs House were non est due to lack of jurisdiction and that the valuation should be reassessed in accordance with the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Operative Portion: The operative portion of the order was pronounced in the court on completion of hearing on 28.10.2009.
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