2018 (9) TMI 1601 - AT - Customs

Valuation of imported goods - rejection of invoice value - enhancement of value to 166.6% under Rule 8 of the Customs Valuation Rules, 1988 - appellant has produced a working sheet to argue that the deductive method under Rule 7 can be resorted to arrive at the value of the goods - Held that - In the impugned order, the Commissioner (Appeals) has noted that the appellant has not furnished any data / details to resort to Rule 7 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The ld. counsel has pleaded that if an opportunity is given to them, the appellant would be able to establish their case with regard to adoption of deductive method. This is a fit case to be remanded to consider the plea of the appellant with regard to whether the deductive method is to be applied - appeal allowed by way of remand.

Summary

Issues:
1. Customs valuation - Loading of declared value under Rule 8 of Customs Valuation Rules, 1988.
2. Influence of relationship on price determination.
3. Application of deductive method for valuation under Rule 7 of Customs Valuation Rules, 2007.
4. Adequacy of evidence provided by the appellant.
5. Remand for fresh consideration by the adjudicating authority.

Customs Valuation - Loading of Declared Value:
The case involved the rejection of the invoice value and loading of 166.6% under Rule 8 of the Customs Valuation Rules, 1988. The original authority and Commissioner (Appeals) upheld the loading. However, the appellant argued that the authorities failed to provide cogent reasons for rejecting the transaction value and did not consider the general practice in the tooling industry to offer discounts. The appellant contended that the relationship with the supplier did not influence the price. The Tribunal found it necessary to remand the matter for fresh consideration to determine if the loading was justified.

Influence of Relationship on Price Determination:
The appellant claimed that the 70% discount received was due to additional marketing and administrative expenses in India, not due to influence from the supplier. The authorities did not consider industry practices or contemporaneous imports of similar goods. The Tribunal acknowledged the discount and the need to establish if the relationship influenced the price, leading to the decision to remand for further assessment.

Application of Deductive Method for Valuation:
The appellant proposed the deductive method under Rule 7 of the Customs Valuation Rules, 2007, supported by a working sheet. The Commissioner (Appeals) noted the lack of data to apply Rule 7. The Tribunal accepted the possibility of using the deductive method and directed the adjudicating authority to consider this method upon remand, along with the appellant's working sheet and relevant documents.

Adequacy of Evidence Provided:
The appellant submitted relevant information to the Special Valuation Branch and supplied various documents to support their case, including an international price list, local sales invoice, and samples to another country. The authorities, however, found the evidence insufficient. The Tribunal emphasized the need for a thorough examination of the evidence and data provided by the appellant in the fresh consideration.

Remand for Fresh Consideration:
Ultimately, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh assessment. The adjudicating authority was instructed to review the appellant's case regarding the deductive method, industry practices, and the influence of the relationship on pricing. The decision aimed to ensure a comprehensive evaluation of the valuation issues raised by the appellant.