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2019 (10) TMI 969 - AT - CustomsValuation of imported goods - rejection of transaction value - enhancement of declared value - whether the Revenue can enhance the declared value of the goods under import, without rejecting the transaction value/declared price, as provided in Section 14 of the Customs Act? - HELD THAT - The declared transactions value can only be rejected with cogent reasons by undertaking the exercise as to on what basis the paid price was not the sole consideration, or the transactions value. Since, no such exercise is done by the Court below to reject the price declared or the transaction value in the bills of entry, the orders of Court below is erroneous and fit to be set aside. The adjudicating authority was bound to accept the transaction value declared by the appellant importer, and erred in rejecting the declared price without recording any finding for rejecting the same, as required under Section 14 of the Customs Act. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the Revenue can enhance the declared value of the goods under import without rejecting the transaction value/declared price as provided in Section 14 of the Customs Act. 2. Whether the Assessing Officer's re-assessment without a speaking order is valid. 3. Whether the appellant's acceptance of the enhanced value and payment of differential duty affects their right to appeal. Detailed Analysis: Issue 1: Enhancement of Declared Value Without Rejecting Transaction Value The primary issue in these appeals is whether the Revenue can enhance the declared value of imported goods without rejecting the transaction value as per Section 14 of the Customs Act. The appellant, engaged in manufacturing aluminum alloys, imports aluminum scrap and declares the self-assessed value based on the invoice value. The Assessing Officer re-assessed and enhanced this value without disclosing the basis for such enhancement. The appellant argues that the declared transaction value should be the basis for duty, as per Section 14, which states that the value of imported goods shall be the transaction value, i.e., the price actually paid or payable. The Tribunal in Sanjivani Non-Ferrous Trading Pvt. Ltd. Vs. Commissioner of Central Excise and Service Tax, Noida, and the Supreme Court in C.C.E. & S.T., Noida vs. Sanjivani Non-Ferrous Trading Pvt. Ltd., have held that the declared price can only be rejected with cogent reasons. The Supreme Court emphasized that the Assessing Officer must provide reasons supported by material evidence to reject the transaction value. Issue 2: Validity of Re-assessment Without Speaking Order The appellant also challenges the re-assessment done by the Assessing Officer without passing a speaking order. The Commissioner of Customs (Appeals) had earlier remanded the matter, directing the Assessing Officer to pass a speaking order. However, the re-assessment was again done without providing a detailed order, leading to the appellant's further appeal. The Tribunal finds that the rejection of transaction value without cogent reasons and the failure to provide a speaking order renders the re-assessment erroneous and fit to be set aside. Issue 3: Effect of Appellant's Acceptance of Enhanced Value and Payment of Differential Duty The Revenue contends that the appellant accepted the enhanced value, paid the differential duty, and waived their right to a show cause notice. However, the Tribunal notes that the appellant paid the duty to avoid detention and demurrage charges and that no cogent reasons were given for rejecting the transaction value. The Tribunal holds that the acceptance of enhanced value under duress does not preclude the appellant from challenging the re-assessment, especially when the rejection of declared value was not substantiated with reasons. Conclusion: The Tribunal concludes that the adjudicating authority erred in rejecting the declared transaction value without recording any findings as required under Section 14 of the Customs Act. The appeals are allowed, the impugned orders are set aside, and the appellants are entitled to consequential benefits in accordance with the law.
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