2013 (12) TMI 1042 - AT - Customs

Assessable value of the imported mix ball bearing of China origin - Enhancement of value - Held that - customs has power to reject the transaction value and enhance the assessable value in terms of Customs Valuation Rules. However, such rejection of transaction value and enhancement of assessable value has to be on the basis of some evidences on record. Contemporaneous imports have to be considered in reference to quality, quantity and country of origin with the imports under consideration. It has been held in a number of decisions that NIDB data cannot be made the basis for enhancement of value - for holding any enhancement in assessment value, the transaction value has to be first rejected based on legal permissible ground as indicated in the valuation Rules - transaction value cannot be rejected without clear and cogent evidence produced by the department with regard to quality, import of origin and place and time of import - no evidence of rejection of transaction value stands produced by the authority, we find no reason to interfere with the impugned order of Commissioner (Appeals). Mere reference to Commissioner Mumbai guidelines to enhance the value of ball bearings, without first assessing the quality of the goods is not justified - Following decision of Eicher Tractors Ltd. v. CC 2000 (11) TMI 139 - SUPREME COURT OF INDIA - Decided against Revenue.

Summary

Issues:
Assessable value of imported mix ball bearing of China origin, Interpretation of Customs guidelines for assessment, Rejection of transaction value and enhancement of assessable value based on evidence.

Analysis:
The dispute in the present appeal revolves around the assessable value of imported mix ball bearings of China origin. The assessing authority disagreed with the value declared by the importer and enhanced it. The Commissioner (Appeals) ruled in favor of the importer citing reasons such as lack of justification for value loading by the department, absence of expert opinion or supporting import evidence, and failure to provide evidence for rejecting the transaction value as the true commercial value of the goods.

The Revenue contended that Customs guidelines issued for uniformity in assessment of ball bearings from China were misinterpreted by the Commissioner (Appeals). The guidelines specified a minimum cut-off price of US $1.60 per kg to be applied only when price list/NIDB data was unavailable or lower than the cut-off price. The Revenue argued that the Commissioner failed to grasp the essence of the guidelines, leading to an incorrect interpretation.

It was argued by the Revenue that the Commissioner (Appeals) erred in stating that no reason was given by the assessing authority for enhancing the value, as the NIDB data supported the Revenue's stance. Additionally, the Revenue referenced a Board's Circular stating that speaking orders were not mandatory when importers agreed to enhancement. However, the Tribunal emphasized that while Customs can reject transaction value and enhance assessable value under Customs Valuation Rules, such actions must be supported by evidence, including consideration of contemporaneous imports in terms of quality, quantity, and country of origin.

The Tribunal highlighted that NIDB data alone cannot justify enhancement of value, and transaction value cannot be rejected without clear and cogent evidence regarding quality, origin, and timing of import. The Commissioner (Appeals) based the decision on legal grounds and referred to relevant Tribunal decisions and a Supreme Court case to support the requirement for substantial evidence before rejecting transaction value. Ultimately, as the Revenue failed to provide evidence supporting the rejection of transaction value, the Tribunal upheld the Commissioner (Appeals) order, emphasizing the necessity for evidentiary support before enhancing assessable value, especially in cases involving mix ball bearings of varying sizes.

Therefore, the Tribunal rejected the Revenue's appeal, concluding that without substantial evidence of rejection of transaction value, the enhancement of assessable value lacked merit, especially considering the nature of the imported mix ball bearings.