2018 (10) TMI 1258 - AT - Customs

Valuation - related person - non-speaking review order - Rejection of transaction value at the time of reviewing order - Comparison with NIDB data not done - Held that - The detailed inquiry into the transaction value is not required to be conducted at every instance except where the proper officer has previously examined the relationship between the parties or where the proper officer has detailed information about the buyer and the seller. In addition, none of these Rules require the adjudicating officer to inquire into NIDB data as was directed vide the order under review dated 18.05.2015 and has been accepted vide order under challenge - The law has been settled that onus to prove that the declared price did not reflect the true transaction value is always on the Department and that Department is bound to accept the transaction value entered between the two parties, unless and until, Department has a cogent evidence that identical or similar goods were imported by other importers at higher price. It is an admitted fact that appellant s/ importer s relationship with foreign suppliers was previously examined in terms of SVB order dated 09.03.2011. After the expiry of subsequent three years, the importer provided detailed information about itself as well as about the foreign suppliers in the requisite format - It becomes clear that the requirements for Rule 3(3) of the Valuation Rules for acceptance of declared transaction value has been fulfilled. Since, NIDB data is not a mandatory requisite under the Rules, the same cannot be held to be a cogent evidence proving the reasonable doubt of the assessing officer. The order under challenge has wrongly rejected the transaction value at the time of reviewing order dated 09.03.2011 merely for want of its comparison with NIDB data. There is no evidence otherwise for supporting the doubt that the relationship of the parties herein had influenced the transaction value. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Valuation of imported goods, Relationship between importer and foreign supplier, Compliance with Customs Valuation Rules, Non-speaking order, Review of valuation order, Adjudicating Authority's duty to verify data, Application of Rule 3 for related party imports, Rejection of declared value, Onus of proof on Department, Requirement of cogent evidence for rejecting declared value.

Detailed Analysis:

1. Valuation of imported goods: The case involved a dispute regarding the valuation of goods imported by the appellant from foreign suppliers. The initial valuation order was reviewed, and subsequent orders were issued based on the relationship between the importer and the foreign supplier.

2. Compliance with Customs Valuation Rules: The Customs Valuation Rules, 2007 were central to the analysis of the case. The rules specify the methodology for determining the value of imported goods, especially in transactions between related parties.

3. Non-speaking order and duty to verify data: The issue of whether the original Adjudicating Authority conducted a proper examination of the data provided by the importer was raised. It was argued that the Authority's reliance solely on the importer's declaration without verifying other data rendered the order non-speaking.

4. Application of Rule 3 for related party imports: The Tribunal analyzed Rule 3 of the Valuation Rules, which provides the methodology for determining the value of imported goods in related party transactions. The rule emphasizes the importance of ensuring that the transaction value accurately reflects the true value of the goods.

5. Rejection of declared value and burden of proof: The Tribunal discussed the requirement under Rule 12 to reject the declared value if there is a reason to doubt its accuracy. It highlighted that the burden of proof lies on the Department to show with cogent evidence that the declared value does not reflect the true transaction value.

6. Onus of proof on Department: Citing legal precedents, the Tribunal emphasized that the Department must provide compelling evidence to reject the declared value. Mere suspicion or doubt is insufficient to justify rejecting the declared price, and the Department must establish non-compliance with the valuation rules.

7. Conclusion: The Tribunal found that the order under challenge had wrongly rejected the transaction value based on the absence of comparison with NIDB data. It concluded that the Department failed to provide sufficient evidence to doubt the transaction value influenced by the relationship between the parties. As a result, the order was set aside, and the appeal was allowed in favor of the appellant.