2016 (9) TMI 1228 - AT - Customs

Rejection of declared value - Regrind ABS 20% Glass filled - Rule 10A under the Customs Valuation Rules, 1988 - Notification No. 10/98-Cus (NT) dated 19.2.1998 allowed rejection of transaction value in certain circumstances - discount of 35% over the PLATT price - Held that - the declared value of Regrind ABS 20% Glass filled has been rejected for the reason that it is significantly different from the PLATT price of the ABS. The price of the two commodities, which is significantly different, cannot be compared in this manner. Only if ABS is imported at a price significantly different from the PLATT price then the question on the declared value can be raised on the basis of PLATT price. The item imported i.e. Regrind ABS 20% Glass filled has very remote connection if at all with the PLATT price - the rejection of declared value cannot be upheld - appeal allowed - decided in favor of appellant.

Summary

Issues: Valuation of imported goods under Customs Valuation Rules, applicability of PLATT price, rejection of declared value, comparison of different types of goods for valuation purposes.

In this case, the appellant imported Regrind ABS 20% Glass filled and declared an invoice price of US $465 per Metric Ton (PMT) against a purchase order. The lower authority rejected this value, considering the PLATT price of ABS at US $940 PMT and granting a 35% discount. The matter reached the Tribunal after the Commissioner (Appeals) set aside the loading in a previous case involving the same importer. The Tribunal remanded the matter back to the Commissioner (Appeals) for further examination. The Commissioner (Appeals) concluded that the introduction of Rule 10A under the Customs Valuation Rules allowed rejection of transaction value in certain circumstances. Relying on legal precedents, the Commissioner (Appeals) rejected the appeal, leading the appellants to approach the Tribunal.

The appellant's counsel argued that the PLATT price was for prime quality ABS, while they imported Regrind ABS 20% Glass filled, stating that the two items cannot be compared. They emphasized the need for a reasonable basis for rejecting the transaction value and criticized the arbitrary 35% discount applied. On the other hand, the Additional Commissioner argued that the purchase order and actual goods differed in glass filling percentage, asserting that the PLATT price could be relevant for rejecting the transaction value, citing legal precedent from the Hon'ble High Court of Gujarat.

After considering the arguments, the Tribunal found that comparing the declared value of Regrind ABS 20% Glass filled with the PLATT price of ABS was not appropriate, as the two commodities were significantly different. They emphasized that only if the imported ABS price significantly deviated from the PLATT price could the declared value be questioned based on PLATT price. Given the remote connection between the imported item and the PLATT price, the rejection of the declared value was deemed unjustified. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.