2023 (8) TMI 711 - AT - Customs

Valuation of export goods - overvalued goods or not - reduction of claim of duty drawback amount - Re-fixation of transaction value of export goods on the basis of the value fixed by the Valuation Committee which has the effect of sanction of less draw back - method adopted for re-fixation of the transaction value is proper or not - HELD THAT - The appellant have filed 7 shipping bills for export of various Wool Knitted Baby readymade garments under claim of duty drawback of Rs.7,76,096/-. Suspecting that the export goods are overvalued, samples were drawn and examined by the Valuation Committee which has re-fixed the value of the exported goods in terms of Rule 4 of Customs Valuation (Determination of value of export goods) Rules, 2007 and which has reduced the duty drawback amount to an extent of Rs.1,72,989/-. It is found that the Ld. adjudicating authority has re-determined the transaction value of the export goods on the basis of this Valuation Committee report. Though the appellant had been informed as to re-fixation of the value of the garments, the reason for reduction in the transaction value has not been communicated; a mere mention that Valuation has been done in terms of Rule 4 of Customs Valuation (Determination of value of export goods) Rules, 2007 is not adequate in the absence of any evidence to arrive at the contemporaneous value. Here in this case, it is found that the appellant was informed as to constitution of the Valuation Committee. Even there was a communication as to what rate the exported goods were valued item wise, but, there was no reason intimated to the appellant as to the adoption of revised lesser values and the basis thereof. The unilateral reduction in the transaction value of the export goods by the Valuation Committee is not legally sustainable. The Ld. adjudicating authority has categorically stated that he has adopted the value fixed by the Valuation Committee without giving reasons for arriving at that decision. Appeal allowed.

Summary

Issues Involved:
1. Re-fixation of transaction value of export goods by Valuation Committee.
2. Reduction of duty drawback based on re-fixed value.
3. Legality of the re-fixation process and basis of valuation.

Summary:
The appeal was filed against the Order-in-Appeal upholding the re-fixation of transaction value of export goods by the Valuation Committee, resulting in a reduction of duty drawback. The Valuation Committee re-fixed the value based on Rule 4 of Customs Valuation Rules, 2007, leading to a decrease in duty drawback amount. The appellant contested the re-fixation process, arguing that the valuation methodology and basis were not adequately communicated or justified. The appellant relied on previous tribunal decisions highlighting the need for transparency and justification in valuation processes conducted by Valuation Committees.

The Tribunal noted that the Valuation Committee re-fixed the value without providing sufficient reasoning or evidence to support the revised values. The appellant was informed of the re-fixation but not given a clear explanation for the reduction in transaction value. The Tribunal considered the lack of transparency in the valuation process and the absence of detailed reasoning for the revised values. It was emphasized that the unilateral reduction in transaction value without proper justification was not legally sustainable. The Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.

The decision highlighted the importance of transparency and justification in valuation processes conducted by Valuation Committees, emphasizing the need for clear communication and reasoning behind any re-fixation of transaction values.