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2020 (6) TMI 71 - AT - CustomsValuation of imported goods - Aluminium Scrap - rejection of declared value - enhancement of declared value - sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018 - Section 128 (1) of Customs Act, 1962 - HELD THAT - The Assessing Authority reassessed the Bill of Entries by enhancing the value not on the basis of any material evidence which show that the appellant have misdeclared the value even no Contemporaneous Import Data was relied upon. The sole reason for enhancement of the value is on the basis of DGOV Guideline vide letter dated 15.11.2018. Therefore, the Adjudicating Authority has not followed the principle laid down under the Custom Valuation Rules and without application of mind straightway enhanced the value only on the basis of DGOV guildeline - In the present case, no such exercise was carried out, Obviously for the reason that the enhancement of value on the basis of the DGOV guideline. Reliance can be placed in absolutely identical case M/S SUNLAND METAL RECYCLING INDUSTRIES AND OTHERS VERSUS C.C. -KANDLA 2019 (10) TMI 113 - CESTAT AHMEDABAD - In the said case also the value was enhanced on the basis of same DGOV guideline and the tribunal has categorically rejected such methodology of the valuation and allowed the appeals filed by the appellant by passing detailed order. Thus, the issue of method of enhancement of the valuation is as per the DGOV Circular which has been rejected by this tribunal. The present case is not different from the case on which the above order was passed. The only difference is the period. These imports were made subsequent to the imports made in earlier order dated 01.10.2019 therefore, the ratio of the above decision of this tribunal is squarely applicable in the present case. The enhancement of the value is absolutely incorrect, arbitrary and without application of mind. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Reassessment of Bill of Entry by enhancing declared value. 2. Rejection of appeals by the Commissioner (Appeals) based on appellant's consent letter. 3. Methodology of valuation based on DGOV guidelines. 4. Applicability of Customs Valuation Rules. 5. Right to appeal despite consent letter. 6. Legal precedents supporting the appellant's case. 7. Cross-examination of witnesses and reliance on their statements. 8. Confiscation of goods and imposition of penalties. Issue-wise Detailed Analysis: 1. Reassessment of Bill of Entry by enhancing declared value: The appellant imported Aluminium Scrap and declared the value as per the invoice of the foreign supplier. The department reassessed the Bill of Entry by enhancing the declared value based on DGOV guidelines, not on contemporaneous import data or material evidence, which is against the principles laid down under the Customs Valuation Rules. 2. Rejection of appeals by the Commissioner (Appeals) based on appellant's consent letter: The Commissioner (Appeals) rejected the appeals on the ground that the appellant had given a consent letter accepting the enhanced value, thus not being an aggrieved party. The appellant contended that the consent was given to avoid delays in clearance and maintained the right to appeal under Section 128 (1) of the Customs Act, 1962. 3. Methodology of valuation based on DGOV guidelines: The reassessment was done solely based on the DGOV guidelines, which was found to be incorrect. The tribunal noted that the DGOV guideline is not above the statute and the adjudicating authority should follow the Customs Valuation Rules sequentially. The tribunal previously rejected such methodology in an identical case involving the appellant. 4. Applicability of Customs Valuation Rules: The adjudicating authority failed to follow the Customs Valuation Rules, which require rejecting the declared value based on evidence and then sequentially applying the rules. The tribunal emphasized that the DGOV guideline cannot override the Customs Valuation Rules. 5. Right to appeal despite consent letter: The tribunal referenced the Supreme Court judgment in CENTURY METAL RECYCLING PVT. LTD. vs UNION OF INDIA, which held that even if a consent letter is given, the assessment must follow the principles of valuation under the act and Customs Valuation Rules. Thus, the appellant's right to appeal remains valid. 6. Legal precedents supporting the appellant's case: The tribunal cited various judgments, including Pushpak Metal Corporation and Bharathi Rubber Lining & Allied Services P. Ltd., which rejected the use of LME prices for valuation of scrap and emphasized the necessity of contemporaneous import data. These precedents supported the appellant's argument against the enhanced valuation based on DGOV guidelines. 7. Cross-examination of witnesses and reliance on their statements: The tribunal noted that the cross-examination of key witnesses and officials was not allowed, which is a violation of principles of natural justice. The reliance on statements without cross-examination was deemed inappropriate, referencing the Supreme Court's decision in Andaman Timber Industries. 8. Confiscation of goods and imposition of penalties: The tribunal found that the charges of undervaluation and the consequent confiscation of goods and penalties were not sustainable due to the flawed valuation process. The penalties imposed on the co-appellants were also set aside. Conclusion: The tribunal set aside the impugned orders, allowing the appeals with consequential reliefs. The enhancement of the value based on DGOV guidelines was rejected as it did not follow the Customs Valuation Rules, and the appellant's right to appeal was upheld despite the consent letter. The tribunal emphasized the need for adherence to legal principles and proper valuation methodologies.
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