2023 (7) TMI 641 - AT - Customs

Valuation of imported goods - medical and other equipments - enhancement of transaction value - related party transaction - Rule 2(2)(I) and (V) of the Customs Valuation Rules, 1988 - HELD THAT - The fact that the appellant and supplier are related parties is not in dispute. Appellant had imported various medical equipments through Bangalore Air Cargo Complex and the Deputy Commissioner of Customs, Bangalore had referred to SVB Chennai for registration with the approval of Commissioner of Customs, Bangalore in terms of Circular No.11/2001 dated 23.2.2001 - the order No.399/2003 dated 1.4.2003 issued by the Deputy Commissioner of Customs, SVB was taken up for review and vide Order-in-Original No.5588/2006 dated 15.11.2006 the same was confirmed by upholding the original Order No.399/2003 dated 1.4.2003. Both the above orders were accepted by the appellants. The impugned order following the above order cannot now be questioned on jurisdiction because the above two orders were rightly referred to SVB Chennai in terms of Board Circular No.11/2001 dated 23.2.2001. Since the SVB orders issued earlier were also imports made from Air Cargo Bangalore, whose orders based on SVB Chennai was accepted; the appellants cannot turn around and state that the SVB order of Chennai is not applicable to the present case. The jurisdictional Notification No.15/2002 dated 7.3.2002 quoted by the appellant is only a Notification to define the areas of jurisdiction in the respective designated offices. This has no relevance as far as Special Valuation Branch is concerned, which is an institution specialised in investigation of transaction involving related parties. Appeal allowed by way of remand.

Summary

Issues:
The issues involved in the judgment are the jurisdiction of the Assistant Commissioner, SVB Chennai in determining the value of goods imported through Air Cargo Bangalore, the validity of the impugned order passed by the Commissioner of Customs (Appeals), Bangalore, and the relevance of Notification No.15/2002 dated 7.3.2002 in the context of the Special Valuation Branch (SVB).

Jurisdiction Issue:
The appellant contended that the Assistant Commissioner, SVB Chennai, lacked jurisdiction to determine the value of goods imported through Air Cargo Bangalore. The Tribunal, referring to Section 5 of the Customs Act, ruled that officers under the Commissioner of Customs, Chennai, did not have jurisdiction for goods imported through ICD, Bangalore. Consequently, the matter was remanded to the Original Authority for a fresh decision, as per Tribunal Order No.697/2010 dated 5.4.2010, which was upheld by the Hon'ble High Court for a previous assessment period.

Validity of Impugned Order:
The Commissioner (Appeals) upheld the order enhancing the transaction value based on the SVB Chennai's findings. The Revenue representative argued that SVB was specialized in investigating transactions involving related parties, and the orders issued by SVB Chennai were valid and sustainable. The appellant and the supplier were deemed related parties under the Customs Valuation Rules, and the orders issued by SVB Chennai were accepted by the appellant, making the impugned order valid.

Relevance of Notification No.15/2002:
The appellant cited Notification No.15/2002 dated 7.3.2002 to assert that SVB Chennai had no jurisdiction over imports made through Air Cargo Bangalore. However, the Revenue representative argued that this notification only defined jurisdictional areas for designated offices and did not impact the jurisdiction of the SVB, which specialized in investigating transactions involving related parties.

In conclusion, the Tribunal remanded the appeal to the original authority based on the facts and circumstances of the case, emphasizing the need for a fresh adjudication without influence from previous observations.