1998 (10) TMI 182 - AT - Customs

Summary

Issues:
- Discrepancy in the declared value of imported goods
- Application of Customs Valuation Rules
- Comparison of transaction value with contemporaneous imports
- Quantity and commercial level of imported goods

Analysis:
1. Discrepancy in Declared Value:
The appeal was filed against an order by the Collector of Customs which directed the assessment of imported goods at a higher value than declared by the appellant. The appellant argued that the declared value should be accepted as the transaction value, emphasizing that the exceptions under the Customs Valuation Rules did not apply to their case. The Tribunal noted that the department had not provided evidence to show that any restrictions on transaction value acceptance were applicable, as per Rule 4 of the Customs Valuation Rules. The Tribunal also highlighted that the department cannot determine the value of imported goods under Rules 5 to 8 of the Customs Valuation Rules if a transaction value is available. The Tribunal agreed with the appellant's contention and set aside the impugned order.

2. Application of Customs Valuation Rules:
The Tribunal emphasized the importance of adhering to the Customs Valuation Rules, particularly Rule 4 which specifies that the transaction value of imported goods should be the price actually paid or payable for the goods when sold for export to India. The Tribunal noted that in the absence of any restrictions under Rule 4(2), the department cannot resort to Rules 5 to 8 for valuation. The Tribunal also cited previous judgments supporting the principle that under valuation cannot be assumed solely based on a comparison of invoices without additional evidence.

3. Comparison of Transaction Value:
The appellant argued that the comparison with another importer who paid a higher price for similar goods was not valid due to differences in quantities imported. Rule 5 of the Customs Valuation Rules requires identical goods to be at the same commercial level and in substantially the same quantity for valuation purposes. The Tribunal agreed with the appellant's argument, highlighting the significant difference in quantities imported by the appellant and the other importer. This difference justified accepting the declared value by the appellant.

4. Quantity and Commercial Level:
The Tribunal considered the wide disparity in the quantities of imported goods between the appellant and another importer. Rule 5 of the Customs Valuation Rules mandates that identical goods should be at the same commercial level and in substantially the same quantity for valuation purposes. Given the substantial difference in quantities imported, the Tribunal found no reason to reject the declared value by the appellant. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.