2016 (10) TMI 517 - AT - Customs

Valuation - enhancement of the declared value on the basis of assessed bill of entry of the imported goods and on the basis of DRI alert - polyester knitted fabrics - whether the enhancement of the value justified? - Held that - The Customs Valuation Rules deals with situation as to how to enhance the value of the imported goods. DRI alert cannot be the reason for enhancement of the value without rejecting the transaction value - declared value cannot be enhanced on the basis of DRI alert. Rule 5 of the Valuation Rules provide for enchanement of the value which is to be done as per said rules. Moreover, the declared vague is found less than the assessed value which cannot be the basis to enhance the value. In this case, the department has assessed identical goods at the rate of 2.85 US per kg whereas the value declared by the appellant ranges between 2.00 US to 2.63 US per kg. The price which has been adopted to be assessed is not the declared vague. In fact, the same is the assessed value. Therefore, the said value cannot be said as the value of contemporaneous import. The value of imported goods cannot be enhanced on the basis of DRI alert and the basis of assessed bill of entry - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against impugned orders regarding enhancement of value of imported polyester knitted fabrics based on DRI alert and assessed bill of entry.

Analysis:
The appellants challenged the enhancement of the declared value of imported polyester knitted fabrics due to a DRI alert and assessment based on a bill of entry. The appellant argued that no notice was given, and no speaking order under section 17(5) of the Customs Act, 1962 was passed. They contended that the value cannot be enhanced solely based on a DRI alert without rejecting the declared value. The Tribunal noted that Customs Valuation Rules govern how to enhance the value of imported goods, and a DRI alert does not authorize value enhancement. The Commissioner (Appeals) had relied on assessed values, not declared values, which contravenes Rule 5 of the Valuation Rules. The Tribunal cited precedents where declared values were upheld over assessed values. The Tribunal emphasized that the declared value must be accepted as the transaction value, and enhancements by lower authorities were deemed unsustainable.

In another case cited, the Tribunal reiterated that the transaction value cannot be rejected based on enhanced prices without evidence of actual higher import prices. The Tribunal concluded that the value of imported goods cannot be enhanced based on assessed values of bill of entry. Additionally, the Tribunal referenced a case where the Commissioner (Appeals) correctly applied Customs Valuation Rules and rejected the Revenue's appeal, affirming that DRI alerts cannot justify value enhancement. Consequently, the Tribunal set aside the impugned orders, allowing the appeals with any consequential relief.

Overall, the Tribunal held that the value of imported goods cannot be increased based on a DRI alert or assessed bill of entry. The decisions emphasized the importance of following Customs Valuation Rules and rejecting transaction values only with proper evidence. The Tribunal's consistent stance against unwarranted value enhancements based on alerts or assessed values ensures fair valuation practices in import transactions.