2016 (10) TMI 80 - AT - Customs

Enhancement of value of the current imported goods - demand of duty in respect of earlier imports - imposition of penalty - electric motors of assorted KW - import from China - variation in the price declared - the entire case of the Revenue is based upon the value adopted from NIDB data - Held that - electric motors though imported from the same importer to which NIDB data relates to, cannot be held to be comparable on account of use of different types of cables for winding purpose. It may be observed that one manufacturer can manufacture the same goods but different qualities, attracting different prices. As such, for comparing the value of one product of the same manufacturer with the other product manufactured by him, it has to be stablished that both types of goods were identical. In the absence of any such efforts made by the Revenue to establish the comparable nature for the imported goods with the other the import, enhancement cannot be upheld. Revenue has not produced an evidence that there was any additional flow back of money to the foreign supplier to whom all the payments were made through ICICI Bank - no evidence on record to reject the transaction value, in which case the value has to be adopted as the correct value. Enhancement of value, demand of duty and imposition of penalty not justified - appeal allowed - decided against Revenue.

Summary

Issues:
1. Valuation of imported electric motors based on NIDB data.
2. Rejection of transaction value by Revenue and subsequent imposition of penalty.
3. Reliability of Chartered Engineer's opinion in determining the value of goods.
4. Comparison of imported goods with NIDB data for valuation purposes.
5. Adequacy of evidence presented by Revenue to support valuation enhancement.

Detailed Analysis:
Issue 1: The case involved the valuation of imported electric motors based on NIDB data, where the Revenue contended that the declared value by the appellant was lower than the actual value. The appellant imported electric motors from China, and the Revenue detained the consignment for further investigation due to the perceived undervaluation.

Issue 2: The Revenue proposed an enhancement of the assessable value of the imported goods and demanded duty for previous imports based on comparisons with NIDB data. The Commissioner upheld the proposal, confirmed duty demands, and imposed significant penalties on the importing firm and the proprietor.

Issue 3: The Chartered Engineer's opinion played a crucial role in determining the value of the imported goods. However, the Tribunal noted that the opinion was based on visual examination and lacked the depth required for a conclusive valuation. The Engineer was not available for cross-examination, raising doubts about the reliability of the opinion.

Issue 4: The Tribunal highlighted the necessity of establishing comparability between the imported goods and those in the NIDB data for valuation purposes. The appellant argued that the NIDB data related to different types of electric motors, making direct comparisons inaccurate. The Tribunal emphasized the importance of considering all relevant factors in determining comparability.

Issue 5: The Tribunal emphasized the lack of sufficient evidence presented by the Revenue to support the valuation enhancement. It noted that the Revenue solely relied on NIDB data without establishing comparability or providing additional evidence to reject the transaction value declared by the appellant. The Tribunal held that in the absence of concrete evidence to reject the transaction value, the declared value should be accepted as correct.

In conclusion, the Tribunal found no merit in the Revenue's valuation approach and set aside the impugned order, allowing the appeal in favor of the appellants. The judgment emphasized the importance of concrete evidence, comparability, and the acceptance of declared transaction value unless proven otherwise.