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2019 (4) TMI 946 - AT - CustomsValuation of imported goods - White Poppy Seed - enhancement of value - rejection of declared value - HELD THAT - As regard the application of price of USD 2700 PMT on the basis of Bill of Entry of contemporaneous import the bill of entry of Laxmi Trading Co. was relied upon wherein the 2700 PMT was enhanced price by the custom under the identical dispute - It is a settled law that for the purpose of contemporaneous price the price which is under dispute and enhanced out of such dispute cannot be taken as a price of contemporaneous goods. Only a price which declared by the assessee and accepted by the department the bill of entry thereof can only be taken as price of contemporaneous goods. The enhancement of the price and consequential demand interest etc. are not sustainable - Appeal allowed - decided in favor of appellant.
Issues Involved:
Customs valuation - Rejection of declared value - Enhancement of value based on alert from DG Valuation - Applicability of contemporaneous import price - Legal process for rejecting declared value - Compliance with provisions - Applicability of judgments on similar cases. Customs Valuation - Rejection of Declared Value: The case involved the appellant importing White Poppy Seed from Turkey, with the customs department enhancing the value from USD 1700 MT to USD 3200 MT based on an alert from the Directorate of Valuation. The appellant disagreed with this enhancement, leading to provisional release of goods pending finalization of value. The issue was whether the rejection of the declared value by the customs department was legally justified. Enhancement of Value Based on Alert from DG Valuation: The customs department proposed to assess the goods at USD 3200 PMT based on international price published in May 2007 for White Poppy Seeds of Turkish Origin. A show cause notice (SCN) was issued, culminating in an order finalizing the assessment at USD 2700 PMT under Rule 5 of Customs Valuation Rules 1988. The question was whether the enhancement of value solely based on the alert from DG Valuation was valid and in compliance with legal provisions. Applicability of Contemporaneous Import Price: The appellant argued that the price of USD 2700 PMT used for assessment was disputed and enhanced by the customs department, thus not a valid contemporaneous import price. Citing judgments, the appellant contended that the price declared by the importer and accepted by the department should be considered for contemporaneous price determination. The issue was whether the customs department correctly applied the contemporaneous import price in finalizing the assessment. Legal Process for Rejecting Declared Value - Compliance with Provisions: The appellant contended that the customs department did not comply with the necessary legal process for rejecting the declared value, making the rejection incorrect. The argument was that without proper rejection of the declared price, enhancement of value should not have been carried out. The key question was whether the customs department followed the correct legal process for rejecting the declared value before enhancing the assessed value. Applicability of Judgments on Similar Cases: Both parties relied on various judgments to support their arguments. The appellant cited cases where similar issues were decided in favor of the importers, emphasizing that the facts and legal points in those cases were identical to the present case. On the other hand, the revenue authority referred to judgments supporting their position. The issue was whether the judgments cited were applicable and relevant to the specific circumstances of the case at hand. In the final judgment, the Tribunal found that the issuance of the SCN based solely on an alert from DG Valuation without investigating the declared value was not justified. The Tribunal emphasized that the enhancement of value should be based on accepted declared prices, not disputed or enhanced prices. Relying on precedents, the Tribunal concluded that the enhancement of value and subsequent demands were unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.
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