2019 (8) TMI 392 - AT - Customs

Valuation of imported goods - 100% polyester knitted fabric (Rolls of Assorted Colour and Weight) - rejection of declared value - enhancement of transaction value based on contemporaneous import price of similar goods - HELD THAT - If there is any doubt about the transaction value declared by the assessee, then if at all the value of contemporaneous import needs to be applied, the value of identical goods or similar goods should be applied. However, in the present case though the Bills of entry of contemporaneous import were relied upon, the adjudication authority failed to ascertain that whether the goods of contemporaneous imports is identical or similar to the goods of the assessee in the present case. No effort was made by the adjudicating authority to ascertain quality, quantity, characteristics of the goods of contemporaneous import. In the present import without carrying out any test to the fact that goods of contemporaneous import and the goods in question in present case are identical or similar, enhancement of the value is not legal and correct. It is also observed that other than Bills of entry of contemporaneous import, there is no other evidence to show that the assessee have suppressed the value - Therefore, it is incumbent on the adjudicating authority to first ascertain the parameters of quality, quantity, characteristics of both the imports, i.e. contemporaneous imports and goods imported in the present case. Accordingly, the entire matter needs to be relooked. The matter remanded to the adjudicating authority for passing a fresh order - appeal allowed by way of remand.

Summary

Issues involved: Valuation of imported goods based on declared value versus contemporaneous import price under Customs Valuation Rules, 2007.

Analysis:
1. Facts of the case: The appellants imported polyester knitted fabric from China and declared the assessable value based on negotiated rates. However, the assessing authority provisionally assessed the goods at a higher value based on contemporaneous import prices, leading to a dispute regarding the valuation of the imported goods.

2. Contentions of the Appellant: The appellant argued that the rejection of the declared value was arbitrary and lacked proper reasoning. They emphasized that the transaction value should only be rejected based on evidence and that the comparison with contemporaneous import prices should consider similar goods with like characteristics, components, and applications.

3. Legal Provisions: The Customs Valuation Rules, 2007 were crucial in determining the correct valuation of imported goods. Rule 12 allows doubts on declared value based on significantly higher values of identical or similar goods. Rule 5 mandates using the transaction value of similar goods for valuation, provided they are not provisionally assessed under the Customs Act.

4. Judicial Interpretation: The Tribunal noted that the enhancement of value by the Customs department was solely based on contemporaneous import prices without proper verification of the similarity of goods. It was highlighted that the assessing authority failed to establish whether the contemporaneous imports were identical or similar to the goods in question, rendering the valuation enhancement incorrect.

5. Decision: The Tribunal set aside all previous orders and remanded the matter to the adjudicating authority for a fresh decision. It was emphasized that a thorough examination of quality, quantity, and characteristics of both the contemporaneous imports and the goods in question is essential for a valid valuation determination.

6. Conclusion: The judgment highlighted the importance of proper assessment under the Customs Valuation Rules, ensuring that valuation enhancements are based on valid evidence and comparisons of similar goods. The case underscored the necessity for a meticulous evaluation process to determine the correct assessable value of imported goods, ultimately leading to a remand for a fresh decision by the adjudicating authority.