2019 (8) TMI 432 - AT - Customs

Valuation of imported goods - 100% Knitted Polyester Fabrics - rejection of declared value - enhancement of value based on NIDB data - no evidence that the transaction value was not correct - HELD THAT - We do not find anything in the order of the Asst. Commissioner to establish that the invoice value declared by the appellant is not the correct transaction value and therefore can be rejected. Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007 states that the declared value can be rejected if the proper officer has reasonable doubt about the truth and accuracy of the declared value. Simply because the value declared by the appellant is lower than the value found in the NIDB database, the value cannot be revised by the department. Such difference in value does not constitute in itself a reasonable doubt needed to reject the transaction value under Rule 12 - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the declared unit price of imported goods can be enhanced based on NIDB data?
2. Whether the transaction value declared by the appellant can be rejected under Rule 12 of the Customs Valuation Rules, 2007?

Analysis:
1. The appellant imported Knitted Polyester Fabrics from China at a declared price of US$ 2.30 per kg. The Department enhanced the price by comparing it with NIDB data, resulting in a higher duty. The Asst. Commissioner and the first appellate authority upheld this decision. The appellant argued that a previous decision by the Tribunal allowed their appeal based on the principle that NIDB data alone cannot justify enhancing the value without evidence of incorrect transaction value. The Tribunal agreed with this argument, stating that the Department failed to establish the declared value was incorrect, thus rejecting the enhancement based on NIDB data.

2. Rule 12 of the Customs Valuation Rules allows the rejection of declared value if there is "reasonable doubt" about its accuracy. The Department rejected the declared value based on NIDB data showing higher prices for similar imports. However, the Tribunal clarified that a mere difference in values does not automatically justify rejecting the transaction value under Rule 12. The Tribunal emphasized that the Department must have a valid reason to doubt the accuracy of the declared value, which was not the case here. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.