2023 (9) TMI 1107 - AT - Customs

Valuation of imported goods - PU belts on trans India basis - transaction value rejected by proceeding sequentially under Customs Valuation Rules and the value was determined as per best judgment assessment under Rule 9 adopting the value of similar goods imported within reasonable period of time - reliance based on contemporaneous imports - HELD THAT - In the matter of M/S. SUMIT ENTERPRISES, M/S. LIBERTY ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS, MUNDRA 2018 (12) TMI 447 - CESTAT AHMEDABAD the period involved was contemporaneous and import was also of PU belts and the quantity was also of the same extent as in the instant case, where it was held that the enhancement of the value as held by the lower authorities, is not sustainable. There are no hesitation in following the above relevant decision of the same Bench (different constitution), which pertains to same product description, is of almost same quantity and of the same price range and of the same period to hold that the decision which were announced in the similar circumstances will substantively apply in the present matter also. Appeal allowed.

Summary

Issues Involved:
1. Enhancement of the declared value of imported PU belts.
2. Reliance on NIDB data and DGOV Circular for valuation.
3. Rejection of transaction value under Customs Valuation Rules.
4. Imposition of penalty under Section 114A.

Summary:

1. Enhancement of the declared value of imported PU belts:
The department sought to enhance the value of imported PU belts from Rs. 7.48/- per piece to Rs. 18.58/- per piece based on NIDB data and a DGOV Circular, which suspected under-valuation of PU belts on a trans-India basis. The importers contested this enhancement, leading to the present appeal.

2. Reliance on NIDB data and DGOV Circular for valuation:
The importers argued that neither NIDB data nor the DGOV Circular could be a basis for value enhancement, citing case laws such as CC (Import), Nhava Sheva vs Bharathi Rubber Lining & Allied Services P Ltd, and others. They also referenced previous decisions by the same bench where similar circumstances led to the acceptance of declared values.

3. Rejection of transaction value under Customs Valuation Rules:
The department rejected the transaction value sequentially under the Customs Valuation Rules and determined the value as per best judgment assessment under Rule 9, adopting the value of similar goods imported within a reasonable period. The Tribunal found that the customs authorities enhanced the value based on the DGOV Circular without proper evidence or contemporaneous import data, and without conducting a proper market enquiry.

4. Imposition of penalty under Section 114A:
The department imposed a penalty under Section 114A on the appellant. However, the Tribunal noted that the enhancement of value without proper evidence is not correct and legal, citing the Supreme Court's decision in CC, Calcutta vs. South India Television Pvt. Limited, which emphasized that under-valuation must be supported by evidence of contemporaneous imports at higher prices.

Conclusion:
The Tribunal allowed the appeal, setting aside the enhancement of the value and the penalty imposed by the lower authorities, and granted consequential relief to the appellant. The decision was pronounced on 22.09.2023.