2022 (12) TMI 732 - AT - Customs

Valuation - Was the Commissioner (Appeals) correct in upholding the acceptance of the declared assessable value by the Adjudicating authority in respect of some Bills of Entry? - determination of value based on contemporaneous imports instead of determining it on the basis of the Chartered Engineer s certificate under Rule 7? - HELD THAT - If the officer has reason to doubt the truth and accuracy of the transaction value, he can call for information including documents and evidence. If the information and evidence is presented and after examining it or if no information or evidence as called for is presented, if the proper office has reasonable belief then it shall be deemed that the value cannot be determined as per Rule 3 (i.e., based on transaction value with additions, if necessary). While the officer can, in the first place call for information and evidence if he has reason to doubt, at the second stage, he should have not just some reason to doubt but a reasonable doubt. If he has such reasonable doubt, then the transaction value can be rejected. The grounds on which the proper officer may raise doubts about the truth and accuracy of the transaction value have been illustrated in explanation 1 (iii) to Rule 12. The list is inclusive and not exhaustive. Thus, if the proper officer has reasonable doubt about the truth or accuracy of the value declared, it can be rejected. If this threshold is crossed or is undisputed, then we need to examine which of the Rules 4, 5, 7, 8 or 9 should be applied and if the sequence in which these Rules must be applied has been correctly followed. Both the lower authorities have found that the grounds for rejection of transaction values in respect of some Bills of Entry were absent in the case. We do not find anything in the appeal which convinces us that there was indeed not only a reason to doubt but also reasonable doubt which would warrant rejection of the transaction value under Rule 12. The fact that DRI officers had obtained a certificate from the Chartered Engineer is irrelevant to the case. The Chartered Engineer s certificate determines value through Deductive method (as per Rule 7). Valuation under Rule 7 becomes relevant only if the requirements for rejection of the transaction value under Rule 12 are first met and then it is also found that the value cannot be determined as per Rules 4 and 5. It is found strange that the Customs department which has access to all the import data in its system requires the importer, who has no such access to provide contemporaneous import data. We also find it extremely unlikely that nobody else in the country has imported the goods either identical or similar to the goods imported in these Bills of Entry which include such common items as multi-cable chargers and laptop bags. The submission of the Revenue that there were no contemporaneous imports of either identical goods or of similar goods as no evidence has been produced before us, such as, say, a report from the Customs EDI system that the disputed goods including such common goods such as laptop bags , chargers , etc. or similar goods were not imported by anyone else except the respondents in these appeals, cannot be accepted - Therefore, there was no ground to not follow Rules 4 and 5 and directly move to Rule 7 in the factual matrix of this case. The Commissioner (Appeals) was correct in holding that the value should be determined based on contemporaneous imports and for that purpose remanding the matter to original authority. The impugned orders in both these appeals must be sustained. The impugned orders are upheld and Revenue s appeals are rejected.

Summary

Issues Involved:

1. Acceptance of declared value in some Bills of Entry.
2. Rejection of declared value and re-determination based on contemporaneous imports.
3. Competence of DRI officers to issue Show Cause Notices (SCNs).
4. Confiscation and penalties under various sections of the Customs Act.

Detailed Analysis:

1. Acceptance of Declared Value in Some Bills of Entry:

The primary issue was whether the Commissioner (Appeals) was correct in upholding the acceptance of the declared assessable value by the Adjudicating authority in respect of some Bills of Entry. The original authority accepted the transaction value in some Bills of Entry, finding no grounds to doubt the truth or accuracy of the declared value. The Commissioner (Appeals) upheld this decision, relying on the Supreme Court judgment in Century Metals, which laid down the requirements for rejection of the transaction value. It was found that none of these conditions were fulfilled in these imports, and therefore, the transaction values could not be rejected. The Tribunal upheld the Commissioner (Appeals)' decision, finding no reason to doubt the declared values.

2. Rejection of Declared Value and Re-determination Based on Contemporaneous Imports:

For other Bills of Entry, the original authority rejected the transaction value under Rule 12 and re-determined it under Rule 7 based on the Chartered Engineer's certificate. The Commissioner (Appeals) remanded the matter to the original authority to determine the value based on contemporaneous imports. The Revenue contended that the contemporaneous data was only available for a portion of the imported goods and not for all items. The Tribunal found it unreasonable to expect the importer to provide contemporaneous data, which should be accessible to the Customs department. The Tribunal upheld the Commissioner (Appeals)' decision to remand the matter for valuation based on contemporaneous imports, rejecting the Revenue's submission that there was no contemporaneous data.

3. Competence of DRI Officers to Issue SCNs:

The competence of DRI officers to issue SCNs was raised but not pressed by the Respondents, as the issue was pending before the Supreme Court in a Review Petition filed by the Revenue. Therefore, the appeals were decided on merits without addressing this issue.

4. Confiscation and Penalties:

The original authority upheld the charge of violation of restrictions imposed by MEITY, rendering the imported goods liable for confiscation under section 111(m) and allowed their redemption under Section 125 on payment of fine but only for export. Penalties were also imposed. The importers appealed against the valuation, confiscation, and quantum of penalties, while the Revenue appealed against the acceptance of declared value in some Bills of Entry and non-imposition of penalty on the Customs Brokers. The Commissioner (Appeals) partly allowed the importers' appeal, directing the values to be re-determined on the basis of contemporaneous imports and reducing the fine and penalties. The Tribunal upheld the Commissioner (Appeals)' decision, finding no grounds to interfere with the impugned orders.

Conclusion:

The Tribunal upheld the impugned orders in both appeals, rejecting the Revenue's appeals and disposing of the cross-objection filed by the Respondents. The decisions of the Commissioner (Appeals) regarding the acceptance of declared values and re-determination based on contemporaneous imports were sustained.