2021 (10) TMI 721 - AT - Customs

Valuation of imported goods - related party transaction - rejection of declared value - failure of the appellant to submit evidence of identical/contemporary imports - imports of Rexona antiperspirants, comprising 150 ml units of Free Spirit , Cotton , Icecool , Ionic and 75 ml units Icecool and Power brands - HELD THAT - The benchmark for ascertainment of assessment is the rate of duty in section 12 of Customs Act, 1962 and, to the extent of ad valorem rate, to be governed by the valuation scheme of section 14 of Customs Act, 1962 - the order disputed before the first appellate authority, and now before us, bears no evidence of such procedural or substantive compliance. Nor is there anything on record to instill confidence in us that such finalization has not been undertaken in the inter regnum with no possibility of our jurisdiction being invoked against those determinations, if any, of differential duty. We are not confronted with determination of differential duty to be recovered in the consignments covered by the three bills of entry. That is yet to be undertaken or, if it has been, would be at some stage in the appellate hierarchy - In the absence of re-assessed bills of entry, we have before us, at best, a piece-meal determination which, being premature, would be inappropriate to dispose off. Order set aside - Matter remanded back.

Summary

Issues:
Challenge to the upholding of the order directing loading of declared value of imports, application of Customs Valuation Rules, determination of assessable value, related party transactions, scrutiny of transactions, loading of value for three years, absence of re-determined assessment, finalization of assessment under Customs Act, 1962.

Analysis:

1. The appeal challenged the upholding of an order directing the loading of the declared value of imports of antiperspirants sourced from a related supplier by 20%. The order was based on findings regarding stakeholding in the appellant and supplier companies, and the lack of evidence of identical/contemporary imports, leading to the neutralization of profit margin to determine assessable value.

2. The appellant argued that they are not related to the supplier, no additional consideration was remitted, and the reliance on local market prices for profit margin calculation was contrary to Customs Valuation Rules. The Authorized Representative contended that the impugned order adequately addressed the raised issues.

3. The Tribunal found it challenging to fulfill its statutory obligation due to the complexity of the case. The dispute arose from inter-company transactions within a transnational group, necessitating scrutiny under Customs Act, 1962, which culminated in the unsatisfactory order upheld by the Commissioner of Customs (Appeals).

4. The loading of value was intended to be in force for three years, subject to review. However, the Tribunal noted discrepancies in the application of loading uniformly without considering individual import values. The order directed finalization of provisional assessments and invoked consequences for suppression or mis-declaration without clear authority for re-determination.

5. The Customs Act enables assessment under various sections, but the loading order lacked procedural compliance and finalization evidence. The Tribunal highlighted the absence of determination of differential duty, emphasizing the premature nature of the order. The matter was remanded for proper assessment under Customs Act, 1962.

6. In the absence of re-assessed bills of entry, the Tribunal set aside the impugned order and remanded the case for the authority to determine duty liability in accordance with the Customs Act, 1962 and relevant rules. The appeal was disposed of accordingly.