2019 (10) TMI 1221 - AT - Customs

Valuation of imported goods - rejection of declared value - import of poppy seeds from Turkey - main argument of the Revenue is that in the export declarations filed before the Turkish Customs, the exporter has shown USD 2500 as the value of goods exported whereas the appellants have declared the value for the imported goods as USD 750 only. HELD THAT - Shri. Haji Sumar, who is one of the partners of M/s. Diamond Traders, has stated that he is not aware of the exporter s declaration filed before the Turkish Customs and does not know that the unit price declared at Turkey is higher. It is stated by him that he has made remittances to the foreign supplier through bank at unit price of USD 750 as declared in the Bills-of-Entry only. The export documents are not in English and contain only some English words. The discrepancy alleged in the export declaration made by exporter is sought to be corroborated by the statement of the appellant, but he has denied any knowledge. Further, the consideration is received through Bank - Therefore, the discrepancies in the export declaration are not sufficient evidence to reject the transaction value. The Tribunal, while disposing of a batch of cases in regard to similar imports of the very same goods and where similar evidence was adduced by the Department, had held that the transaction value cannot be rejected on the basis of such evidence. Demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of declared value in Bills-of-Entry for import of poppy seeds from Turkey.
2. Determination of revalued amount, differential duty, interest, confiscation, and penalties.
3. Grounds for rejecting the invoiced value.
4. Reliance on contemporaneous imports for valuation.
5. Evidence from Turkish Customs on export declarations.
6. Discrepancies in export declarations and importer's knowledge.
7. Reliance on Public Ledger (U.K.) and Comtrade for value enhancement.
8. Precedent cases and Tribunal decisions on similar imports and evidence.
9. Decision on the sustainability of the demand and setting aside of impugned orders.

Analysis:
1. The appeals before the Appellate Tribunal CESTAT CHENNAI arose from the rejection of the declared value in Bills-of-Entry for the import of poppy seeds from Turkey, leading to the determination of a revalued amount at USD 2500 per Metric Tonne (MT) along with the confirmation of differential duty, interest, confiscation of goods, and imposition of penalties.

2. The appellant argued that the proper officer had initially accepted the declared value of USD 750 per MT during import clearance. The appellant denied undervaluation, stating that payments were made through banking channels. The appellant relied on previous Tribunal decisions to support the acceptance of declared value and argued against the rejection of invoiced value.

3. The Department, represented by the Authorized Representative, contended that discrepancies in export declarations from Turkish Customs supported the rejection of the transaction value declared by the appellants. The Department highlighted the differences in unit prices between export declarations and the declared value during import.

4. The appellant further argued against the Department's reliance on contemporaneous imports for valuation, citing a previous decision that emphasized the inability to rely on values from different quantities and origins.

5. The evidence from Turkish Customs, specifically the export declarations showing higher unit prices compared to the declared value, was a crucial point of contention. The Department used this discrepancy to support the rejection of the transaction value.

6. The discrepancies in export declarations were challenged by the appellant, who claimed ignorance of the exporter's declaration filed before Turkish Customs. The appellant emphasized that remittances were made at the declared unit price, and discrepancies in export declarations were insufficient to reject the transaction value.

7. Additionally, the Department relied on evidence from the Public Ledger (U.K.) and Comtrade to enhance the value, which was contested by the appellant based on previous Tribunal decisions.

8. The Tribunal considered precedent cases involving similar imports and evidence, ultimately concluding that the demand could not be sustained based on the presented evidence. Citing a previous decision, the Tribunal set aside the impugned orders.

9. Consequently, the appeals were allowed, with any consequential reliefs granted to the appellant. The Tribunal's decision highlighted the importance of consistent valuation principles and the necessity for substantial evidence to reject declared transaction values.