2015 (10) TMI 2390 - AT - Customs

Transaction Value Rule 4(1) of the Customs Valuation Rules Department has not been able to dispute the genuineness of the transaction value nor adduced any evidence of contemporary import Appellant contends that once the Transaction Value is determined under Rule 4(1) there is no question for determining the value under subsequent rules. Held That - Reliance on only one part of the Chartered Engineers certificate and ignoring the other part is a misdirected step in arriving at a conclusion - Revenue could have accepted the Transaction Value or the value could be determined under the Residual Rule 8 of Customs Valuation Rules - Order of Commissioner (Appeals) is not sustainable Decided against the Revenue.

Summary

Issues:
1. Dispute over the declared value of imported second-hand machinery.
2. Application of Customs Valuation Rules and judicial pronouncements.
3. Interpretation of Chartered Engineer's certificate.
4. Comparison with previous court judgments.
5. Consideration of royalty payment in determining transaction value.

Analysis:
1. The appeal concerns the disputed declared value of second-hand machinery imported by the appellant, leading to Customs enhancing the value based on estimated value provided by a Chartered Engineer. The matter involved multiple rounds of litigation before the Tribunal.

2. The main contention was the genuineness of the transaction value and adherence to Customs Valuation Rules. The appellant argued that the transaction value was determinable under Rule 4(1) and criticized the Commissioner's reliance on certain judgments, asserting that the value loading was incorrectly calculated.

3. The Tribunal analyzed the Chartered Engineer's certificate, emphasizing the discrepancy in how the Customs authorities interpreted it. The Tribunal noted that the certificate deemed the contract price of 65000 as reasonable, contrary to the Customs' focus on the approximate value of 200,000. This misinterpretation influenced the value determination process.

4. The Tribunal distinguished the present case from the precedent cited by the lower authorities, highlighting that the Chartered Engineer's certification was pivotal. The Tribunal favored the application of the rule under Rule 4(1) and criticized the Commissioner for not justifying the deviation from this rule based on relevant circumstances.

5. Additionally, the Tribunal addressed the consideration of royalty payment in the transaction, noting that while royalty was indeed paid, there was no evidence to suggest it influenced the machinery's transaction price. The Tribunal concluded that the Commissioner's reasoning lacked legal basis, ultimately setting aside the impugned order and allowing the appeal.