2023 (11) TMI 573 - AT - Customs

Gross Undervaluation - meaning of value and transaction value - order is challenged on the ground that provisional assessment is in itself is an evidence that Appellants had not voluntarily accepted the value @Rs 1799/- per piece - HELD THAT - Section 14(1) is a deeming provision as it talks of deemed value of such goods. Therefore normally the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This ordinarily is the course of action which needs to be followed by the Assessing Officer. This principle of arriving at transaction value to be the assessable value applies. That is also the effect of Rule 3(1) and Rule 4(1) of the Customs Valuation Rules. The authority is thus bound to accept price actually paid or payable for goods as the transaction value - In order to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value. In COMMISSIONER OF CUSTOMS CALCUTTA VERSUS SOUTH INDIA TELEVISION (P) LTD. 2007 (7) TMI 9 - SUPREME COURT the Court explained as to how the value is derived from the price and under what circumstances the deemed value mentioned in Section 14(1) can be departed with and held that Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore the charge of under-invoicing has to be supported by evidence of prices of contemporaneous imports of like goods. It is found that the Assessing Officer was having a valid and enough evidence for rejection of the transaction value as declared by the appellant in their bill of entry by resorting to Rule 3 (4) of the Customs Valuation Rules 2007. Since the value of identical and similar goods at the contemporary import time was also could not be ascertained we feel that the resorting the valuation under Rule 7 of the Customs Valuation Rules by the Department is legally sustainable in the facts and circumstances of this case - it is also observed that in the present case also there is sufficient admission of the authorized representative of the appellants for the value of contemporaneous import of similar goods shown by the department. There is no infirmity in the order-in-original under challenge - Appeal dismissed.

Summary

Issues Involved:
1. Alleged undervaluation of imported goods.
2. Validity of the transaction value declared by the importer.
3. Legality of the re-determined value by the Customs authorities.
4. Imposition of penalties under Section 114A of the Customs Act, 1962.

Summary:

1. Alleged Undervaluation of Imported Goods:
The Customs officers received intelligence suggesting that the goods in container No. BSIU2052206, covered under Bill of Entry No. 4873621 dated 12.04.2016, were grossly undervalued. The importer declared the assessable value as Rs. 23,20,035/- with a duty payable of Rs. 6,13,145/- for 9400 pieces of Diaphragm Boost Pump. Upon 100% examination, the goods were detained for further investigation on the suspicion of undervaluation.

2. Validity of the Transaction Value Declared by the Importer:
The importer's representative, Shri Sanjeev Garg, admitted under Section 108 of the Customs Act, 1962, that the declared unit price of 3.58 USD per piece was correct. However, he did not object to the re-determination of the value based on the lowest rate available on e-commerce websites like eBay and Alibaba, which showed significantly higher prices. The importer accepted the re-determined value and paid the differential duty.

3. Legality of the Re-determined Value by the Customs Authorities:
The Customs authorities re-determined the assessable value based on the lowest rate available on e-commerce websites, which was accepted by the importer's representative. The Tribunal upheld this re-determination, citing that the Assessing Officer had valid evidence to reject the declared transaction value under Rule 3(4) of the Customs Valuation Rules, 2007. The Tribunal referenced the case of Commissioner of Customs (Import), ICD, TKD, New Delhi versus Sodagar Knitwear to support its decision.

4. Imposition of Penalties Under Section 114A of the Customs Act, 1962:
The Tribunal observed that the statements recorded under Section 108 of the Customs Act, 1962, were never retracted, and the importer had voluntarily agreed to the re-determined value. The Tribunal found no infirmity in the order-in-original, which confirmed the re-determined value and imposed penalties under Section 114A of the Customs Act, 1962. The appeals were dismissed, and the order-in-original was upheld.

Conclusion:
The Tribunal dismissed the appeals, upholding the re-determined value and the penalties imposed by the Customs authorities, confirming that there was no infirmity in the order-in-original.