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Issues involved: Appeal against Order-in-Original rejecting declared value of second-hand machines and re-valuing under Rule 8 of Customs Valuation Rules.
Summary: The appeal was made against an Order-in-Original by the Commissioner of Customs rejecting the declared value of second-hand machines and re-valuing them under Rule 8 of Customs Valuation Rules. The differential duty was confirmed, but no fine or penalty was imposed. The importer produced certificates from local experts supporting the declared values, arguing that Rule 4 should be applied instead of Rule 8 as the declared transaction value was not rejected based on contemporaneous imports or fraud. After considering arguments from both sides and reviewing relevant case laws, the Tribunal found that the valuation of second-hand machinery should be done under Section 14 read with Rule 4. The law evolved to require strong evidence to challenge the transaction value, such as contemporaneous imports at higher prices or proof of abnormal considerations. The Tribunal held that the impugned Order-in-Original needed to be set aside because it failed to show contemporaneous imports of like goods or allege fraud, rejected the transaction value based on lack of valuation details in the certificates, and proceeded to Rule 8 without explanation on why other rules did not apply. It was emphasized that Rule 4 should not be bypassed without valid reasons, and the transaction value should not be discarded in favor of a notional value under Rule 8 without proper justification. The actual transaction value should not be superseded by a deemed value without proper rejection under Section 14 read with Rule 4. Consequently, the demand for duty in the Order-in-Original was deemed invalid, and the order was set aside. The appeal succeeded with consequential relief, if any.
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