2016 (12) TMI 1435 - AT - Customs

Valuation of imported goods - spares and components of Car audio systems - mixed lot of goods i.e. various spares and components of car audio system manufactured by different entities - goods undervalued - Held that - the entire case of the revenue is built upon the enhancement of the value based upon the price list received from Kenwood Corporation, Sony India Ltd. and Pioneer. There is nothing on record to show that the consignments which are imported were procured by the appellant directly from the manufacturers. It is also seen from the records that the main appellant has been taking a consistent plea that these are stock lot purchased from a trader and they were outdated models, he has also been taking a consistent view that the supplier who had exported the consignment to him had collected all these items from different places and then collated and despatched at a value which is the transaction value. In our considered view, on the perusal of the consignment details, we find that the case of the main appellant needs to be accepted as the speakers and other spares of car audio accessories did indicate that consignment is of mixed lot. Since the appellant has already accepted the enhancement of the value in the first assessment after examination, we do not find any reason to further enhance the value as has been held by the adjudicating authority. Reliance placed on the decision of the case of EICHER TRACTORS LTD. Versus COMMISSIONER OF CUSTOMS, MUMBAI 2000 (11) TMI 139 - SUPREME COURT OF INDIA , wherein the apex court has specifically stated the price list of the foreign supplier manufacturer is not a proof of the manufacturing value and existence of the price list cannot be the sole reason for rejecting the transaction value. In the case in hand, revenue s contest on the value of the goods which are imported in the consignment is not based on the finding that these were mixed lot and manufactured by different manufacturers. Appeal is allowed upholding the value which has been accepted for assessment and discharge of duty in the first instance - decided in favor of appellant.

Summary

Issues:
- Undervaluation of imported goods
- Rejection of transaction value
- Application of manufacturer's price list
- Acceptance of transaction value for assessment

Undervaluation of imported goods:
The case involves the import of a consignment of spares and components of car audio systems, which were alleged to be undervalued by the revenue department. The officers detained the consignment and enhanced its value based on physical examination and comparison with manufacturer's price lists. Subsequently, a show-cause notice was issued for demanding differential duty and imposing penalties. The main appellant contested the notice, leading to confirmation of demands and penalties by the adjudicating authority.

Rejection of transaction value:
The appellant argued that the transaction value should not be discarded as the goods were purchased as a stock lot from a trader, and the nature of the goods being a mixed lot should be considered. The appellant relied on precedents such as the Shalimar Industries Ltd. case and the Eicher Tractors Ltd. judgment to support the acceptance of transaction value for stock lots.

Application of manufacturer's price list:
The revenue department contended that the enhanced valuation and admission of undervaluation by the appellant justified the application of manufacturer's price lists procured from Kenwood Corporation, Sony India Ltd., and Pioneer. However, the Tribunal found that the case was based on mixed lot imports and the appellant's consistent claim of purchasing outdated models as stock lot from a trader.

Acceptance of transaction value for assessment:
Upon reviewing the submissions and records, the Tribunal concluded that the appellant's argument regarding the nature of the imported goods as a mixed lot and purchased as stock lot from a trader was valid. The Tribunal found merit in the appellant's position that the transaction value should be accepted, especially considering the judgments in Eicher Tractors Ltd. and Hindustan Pencils Ltd. The impugned order was set aside, and the appeal was allowed, upholding the value accepted for assessment and duty discharge in the initial assessment.

This judgment highlights the importance of considering the specific circumstances of imported goods, such as being part of a mixed lot or stock lot, in determining the appropriate valuation method and accepting transaction values in certain cases.