2008 (4) TMI 7 - SC - Customs

Rejection of Valuation customs valuation rules - appellant was the only importer of the goods in question and there are no contemporaneous imports - unless the evidence is gathered against the invoice value - casting suspicion on the invoice is not sufficient to reject it - undervaluation not proved

Summary

Issues:
1. Extent of jurisdiction of assessing officer to discard transactional value disclosed by importer.

Analysis:
The case involves a dispute over the jurisdiction of the assessing officer to reject the transactional value declared by an importer. The importer filed a bill of entry for clearance of goods at a declared unit price, which was subsequently challenged by the Deputy Commissioner of Customs. The Commissioner of Customs (Appeals) affirmed the rejection of the declared value, stating that the importer should provide proof of a downward pricing pattern in the international market. However, the Tribunal allowed the importer's appeal, emphasizing that the importer had valid reasons for reduced prices and future imports at even lower prices, which were accepted by customers. The Tribunal held that in the absence of justifiable reasons to reject the declared value, it should not be enhanced.

The appellant argued that the price fluctuation between transactions with the same parties was not plausible, placing the onus of proof on the importer. The legal principles governing the determination of transaction value under the Customs Act and Valuation Rules were examined. The Court highlighted the importance of contemporaneous evidence to challenge the declared value and emphasized that the burden of proof lies with the customs authorities. Rules governing the determination of transaction value in the absence of contemporaneous imports were discussed, emphasizing the need for reasonable means consistent with the statutory provisions.

The Court criticized the authorities for placing the burden of proof on the importer without providing legal justification or presenting contrary evidence. It was noted that the appellant had provided valid reasons for the price decline, supported by contemporaneous imports from the same supplier. Legal precedents were cited to reinforce the principle that the invoice price should be accepted as the transaction value unless there is concrete evidence of under-valuation. The Court concluded that the appeal lacked merit and dismissed it, with costs awarded to the respondent.