2013 (5) TMI 11 - AT - Customs

Enhancement of assessable value as appellant failed to produce the invoice issued by the manufacturer - confiscation of goods - Held that - It is settled law that the quotation cannot be the basis for rejection of transaction value unless any other positive evidence of contemporaneous import. The price declared by the importer cannot be disbelieved on the ground that the manufacturers invoice had not been produced particularly when the goods were purchased from a trader on high sea sales. Revenue failed to produce any material to discard the declared price - enhancement of the declared value is not sustainable. In favour of assessee.

Summary

Issues:
1. Valuation of imported goods under Rule 8 of the Customs Valuation Rules, 1988.
2. Confiscation of goods and imposition of fine and penalty under the Customs Act, 1962.
3. Rejection of transaction value based on quotation and contemporaneous import evidence.

Valuation of Imported Goods:
The appellant imported hardboard and declared a value of USD 0.64 per sheet. The adjudicating authority enhanced the value to USD 1.25 per sheet under Rule 8 of the Customs Valuation Rules, 1988. The Commissioner (Appeals) modified the order by reducing the redemption fine and penalty. The appellant argued that the goods were purchased on high sea sales basis and provided evidence to support the declared value. The Tribunal found no identical or similar imports during the relevant period. It noted discrepancies in the thickness of goods and highlighted evidence of undervaluation by other importers. The Tribunal held that the quotation alone cannot justify value enhancement and ruled in favor of the appellant, setting aside the impugned orders.

Confiscation and Penalty Imposition:
The adjudicating authority confiscated the goods and imposed a fine and penalty under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) reduced the redemption fine and penalty. The appellant contended that the price was negotiated with the supplier and the manufacturer's invoice was not produced. The Tribunal emphasized that the declared price should not be doubted solely due to the absence of the manufacturer's invoice, especially in high sea sales transactions. The Revenue failed to provide evidence to reject the declared price, leading the Tribunal to conclude that the enhancement of value was not justified. Consequently, the appeal was allowed with consequential relief.

Rejection of Transaction Value:
The appellant argued against the rejection of the transaction value based on a quotation and contemporaneous import evidence. The Tribunal held that the quotation alone cannot serve as a basis for value enhancement unless supported by positive evidence of contemporaneous imports. It noted the similarity between the goods description, quotation, and commercial invoice. The Tribunal emphasized that the declared price should not be disbelieved without concrete evidence. As the Revenue failed to present material to refute the declared price, the Tribunal set aside the impugned orders and allowed the appeal.