2014 (4) TMI 513 - AT - Customs

Valuation of goods - Enhancement in valuation - Import of glassware - rejection of transaction value under Rule 10A of the CVR 1988 - Held that - importer was asked to produce a copy of the manufacturer s price-list. However, the respondent-importer failed to produce any such document. It was merely stated that the goods were shipped on the basis of a sight draft and not against LC. There is also no written contract in existence and that the supplier has not favoured the importer with the manufacturer s invoice. A copy of the manufacturer s invoice was procured by the Customs authorities and shown to the importer and he was asked to comment on the same. In spite of giving such opportunities, the respondent-importer was not able to lead any evidence as to how they could obtain the impugned goods, namely, glassware, at lower price when compared to the manufacturer s own price-list. IN these circumstance, it has to be held that the Customs authorities have made out a case for under valuation and, therefore, the onus of proving that there was no undervaluation shifts to the respondent-importer and this onus has not been discharged by the respondent-importer. Therefore, the department was justified in enhancing the value on the basis of the manufacturer s price-list - Following decision of Sharp Business Machines Pvt. Ltd. 1990 (8) TMI 144 - SUPREME COURT OF INDIA and Vimal Enterprises Pvt. Ltd. 2000 (12) TMI 149 - CEGAT, MUMBAI - Decided in favour of Revenue.

Summary

Issues:
1. Rejection of transaction value under Rule 10A of the CVR 1988 based on manufacturer's price-list.
2. Application of Rule 10A for enhancement of value in case of reasonable doubt about declared value.
3. Failure to produce manufacturer's price-list by the importer.
4. Justification for enhancing value based on manufacturer's price-list.
5. Absence of respondent during hearings.

Analysis:

1. The appeal challenged the rejection of transaction value under Rule 10A of the CVR 1988 based on the manufacturer's price-list. The lower appellate authority set aside the enhancement of value of imported glassware and the duty demand. The Revenue contended that the rejection was lawful under Rule 10A, citing precedents like the Eicher Tractors case. The Dy. Commissioner for Revenue submitted the manufacturer's price-list as evidence, emphasizing the respondent's failure to rebut it. The Revenue argued for setting aside the impugned order.

2. Rule 10A allows rejection of declared value if there is doubt about its accuracy. In this case, the assessing officer requested the importer to provide the manufacturer's price-list, but the importer failed to do so. Despite opportunities, the importer could not explain the significant price difference between the declared value and the manufacturer's price-list. The Customs authorities established a case for undervaluation, shifting the burden of proof to the importer. As the importer did not discharge this burden, the department was justified in enhancing the value based on the manufacturer's price-list, supported by legal precedents.

3. The respondent's absence during multiple hearings was noted, with no representation despite notices. The case proceeded for consideration due to the respondent's continuous non-appearance. The respondent's failure to participate in the proceedings did not affect the decision on the appeal.

4. The judgment concluded by finding merit in the Revenue's appeal, setting aside the lower appellate authority's order, and restoring the adjudicating authority's initial order. The decision highlighted the importance of complying with Rule 10A and providing necessary documentation to support declared values, emphasizing the consequences of failing to do so.

This detailed analysis of the judgment addresses the issues raised in the appeal, the legal arguments presented by the parties, and the rationale behind the decision rendered by the Appellate Tribunal CESTAT MUMBAI.