2023 (1) TMI 59 - AT - Customs

Valuation of imported goods - Hair Bow Raw Accessories Articles - mis-declaration and mis-classification of goods - rejection of declared assessable value of the goods - reassessment of imported goods - redetermination of value on the basis of the value of contemporaneous imports of similar goods and the NIDB data - HELD THAT - Section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. In the present case, the proper officer doubted the truth or accuracy of the value declared by the importer for the reason that contemporaneous data had a significantly higher value. It was open to the importer to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared and seek a reasonable opportunity of being heard, but the importer did not do so. On the other hand, the importer specially stated in the statement recorded under section 108 of the Customs Act, after being shown the contemporaneous value, that it he agreed that the value of the goods should be enhanced. The importer also specifically stated that it did not want to avail of the right conferred under section 124 of the Customs Act and, therefore, did not want any show cause notice to be issued to or personal hearing to be provided. The Commissioner (Appeals) placed emphasis on the classification of the goods shown as Serial No. 4 in the Bill of Entry and observed that the evidence gathered by the revenue to prove that the goods would fall under a different classification has a vital role. The Commissioner completely loss sight of the fact that Deepak Garg, who had appeared on the behalf of the importer, had specifically stated that the importer accepted the valuation (based on the classification proposed by the department) and also stated that he would pay the differential duty and would not require any show cause notice to be issued or personal hearing to be granted. Despite the categorical statement made by Deepak Garg in the statement recorded under section 108 of the Customs Act, the Commissioner (Appeals) still observed that the department did not adduce any clear and cogent evidence that any additional consideration, over and above the transaction value, had flown - the Commissioner (Appeals) was not justified in setting aside the orders passed by the assessing officer on the Bills of Entry. The order dated 08.05.2018 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. Appeal allowed - decided in favor of Revenue.

Issues Involved:
1. Rejection of declared assessable value.
2. Re-determination of the value of imported goods.
3. Classification of imported goods.
4. Acceptance of enhanced value by the importer.
5. Requirement of a speaking order under Section 17(5) of the Customs Act.
6. Compliance with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Issue-wise Detailed Analysis:

1. Rejection of Declared Assessable Value:
The adjudicating authority rejected the declared assessable value of Rs. 20,17,145 for the imported goods under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The proper officer had reason to doubt the accuracy of the declared value based on contemporaneous import data. The importer, through its authorized representative, accepted the enhanced value and agreed to pay the differential duty without requiring a show cause notice or personal hearing.

2. Re-determination of the Value of Imported Goods:
The adjudicating authority re-determined the assessable value of the consignment to Rs. 35,14,352 under Rule 5 of the 2007 Valuation Rules. This re-determination was based on the value of contemporaneous imports of similar goods and the NIDB data. The importer voluntarily accepted this re-determined value and agreed to pay the differential customs duty.

3. Classification of Imported Goods:
The adjudicating authority found that the goods declared as "Hair Bow Raw Accessories Articles" were actually resin/plastic beads/articles and reclassified them under CTH 39269099 instead of 96159000. The Commissioner (Appeals), however, held that there was no mis-declaration regarding the classification and that the goods should be considered as "Hair Bow Raw Accessories Articles" falling under CTH 96159000.

4. Acceptance of Enhanced Value by the Importer:
The importer, through its authorized representative, made categorical statements under Section 108 of the Customs Act, accepting the enhanced value based on contemporaneous data. The importer also stated that they did not require a show cause notice or personal hearing. The Commissioner (Appeals) discarded these statements, but the tribunal emphasized that such acceptance made it unnecessary for the revenue to establish the valuation further.

5. Requirement of a Speaking Order Under Section 17(5) of the Customs Act:
Section 17(5) of the Customs Act requires a speaking order to be passed on re-assessment, except where the importer confirms acceptance of the re-assessment. In this case, the importer confirmed acceptance of the enhanced value, and thus, a speaking order was not required. The Commissioner (Appeals) incorrectly held that mere acceptance was not sufficient without clear and cogent evidence of additional consideration.

6. Compliance with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007:
Rule 12 allows the proper officer to reject the declared value if there is reasonable doubt about its accuracy. The proper officer, in this case, had such doubts based on contemporaneous data showing higher values for similar goods. The importer did not contest the grounds for doubting the declared value and accepted the enhanced value. The tribunal upheld that the proper officer followed the correct procedure under Rule 12.

Conclusion:
The tribunal set aside the order of the Commissioner (Appeals), reinstating the adjudicating authority's decision to reject the declared value, re-determine the value, and classify the goods as resin/plastic beads/articles. The appeal by the department was allowed, emphasizing that the importer's acceptance of the enhanced value and waiver of procedural rights made further investigation or justification unnecessary.

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