2001 (7) TMI 712 - Commissioner - Customs

Summary

Issues Involved:
1. Whether the enhancement of the value of imported goods to US $ 1.05 per kg is justified.
2. Whether the lower authority's reliance on a solitary bill of entry for valuation is valid.
3. Whether the declared value of US $ 0.32 per kg should be accepted or enhanced to US $ 0.45 per kg.

Detailed Analysis:

1. Justification of Value Enhancement to US $ 1.05 per kg:
The lower authority enhanced the value of the imported goods from US $ 0.32 per kg to US $ 1.05 per kg based on a single bill of entry (No. 131242) where the transaction value declared was US $ 1.05 per kg. The appellants contested this enhancement, arguing that similar goods were regularly assessed at US $ 0.45 per kg by various Custom Houses, including Kolkata. They cited several adjudication orders and bills of entry supporting this consistent valuation. The Hon'ble Supreme Court in Basant Industries v. Addl. Collector of Customs (1996) held that mere comparison of invoices from different importers is not conclusive for determining under-invoicing and that reliance on a stray instance of higher value is incorrect.

2. Validity of Reliance on Solitary Bill of Entry:
The appellants argued that the lower authority's reliance on a solitary bill of entry (No. 131242) was erroneous and insufficient for enhancing the value to US $ 1.05 per kg. The lower authority failed to consider other relevant evidence and instances where similar goods were assessed at US $ 0.45 per kg. The Hon'ble Supreme Court and CEGAT have consistently held that reliance on a single instance of importation at a higher value is not a valid basis for valuation, as seen in the cases of Basant Industries and Goodluck Industries v. Commissioner (1999).

3. Acceptance or Enhancement of Declared Value to US $ 0.45 per kg:
The appellants declared the value of the imported goods at US $ 0.32 per kg. The lower authority rejected this value under Rule 10A of the Valuation Rules, 1988, and enhanced it to US $ 1.05 per kg under Rule 6. The appellants argued that the transaction value should be accepted as per Rule 4(2) of the Customs Valuation Rules, 1988, unless there is evidence of misdeclaration or additional consideration paid. They cited the consistent practice of assessing similar goods at US $ 0.45 per kg by various Custom Houses, including orders passed by higher authorities like the Commissioner of Customs (Port), Kolkata, and the Jt. Commissioner of Customs, Kolkata. The adjudicating authority found sufficient merit in the appellants' contention and noted that the Custom House had been adopting the value of US $ 0.45 per kg for similar goods. Therefore, the declared value of US $ 0.32 per kg was not acceptable, and the value should be enhanced to US $ 0.45 per kg in line with the established practice.

Conclusion:
The adjudicating authority set aside the lower authority's order enhancing the value to US $ 1.05 per kg and directed that the value of the imported goods be enhanced from US $ 0.32 per kg to US $ 0.45 per kg for assessment purposes. The appeals were disposed of with consequential relief.