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TMI Blog2018 (12) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... ble value. 2) In a writ petition filed by the respondent in the High Court of Allahabad, on the directions of the High Court directed the Deputy Commissioner of Customs, NOIDA passed a speaking order dated 25th March, 2015, giving his reasons to reject the transaction value as declared by the respondent and enhancing the same by taking into consideration the value of imported goods, namely, grades of scrap Aluminum contents therein as well as quantum of presence of other metals. 3) The assessment order dated 25th March, 2015 passed by the Assessing Officer was challenged by filing appeals before the Commissioner (Appeals), Central Excise and Customs, NOIDA. All these appeals were dismissed. Challenging the order of the Commissioner (Appeals), the respondent approached the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the "Tribunal"). By the impugned common judgment dated 17th January, 2017, the appeals of the respondent were allowed thereby rejecting the enhancement of assessable value by the Revenue. It is the said order of the Tribunal, which is the subject matter of these appeals. 4) The entire basis of the order of the Tribunal is contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the sole consideration, the transaction value can be rejected. However, such exercise has not been done in these cases. 6) It was submitted that if the Original Authority/Assessing Officer had failed to examine the evidence that was available with the Department and had not undertaken the exercise regarding price being not the sole consideration, the Tribunal should have remanded the case back to the Assessing Officer for examining the material and undertaking that exercise. To put it otherwise, the entire thrust of the argument of Mr. Radhakrishna was that appeals could not have been allowed straightaway by accepting the transaction value given by the respondent/assessee and another opportunity should have been given to the Assessing Authority in this behalf. 7) This argument may seem to be attractive, but only when there is a cursory look at the aforesaid observations of the Tribunal that the Assessing Officer did not examine the evidence available with the Department which was necessitated for such a purpose. However, the observations of the Tribunal have to be understood in their entirety and in the context in which these are made. The Tribunal has categorically mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, be read as referring to "theparticular transaction" and payability in respect of the transaction envisages a situation where payment of price may be deferred. xxx xxx xxx 13. That Rule 4 is limited to the transaction in question is also supported by the provisions of the other rules each of which provide for alternate modes of valuation and allow evidence of value of goods other than those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7-A. When value of the imported goods cannot be determined under any of these provisions, the value is required to be determined under Rule 8 "using reasonable means consistent with the principles and general provisions of these Rules an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4(2). As per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. 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 consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on invoice produced by the importer is not sufficient to reject it as evidence of value of imported goods. Undervaluation has to be proved. If the charge of undervaluation cannot be supported either by evidence or information about comparable imports, the benefit of doubt must go to the importer. If the Department wants to allege undervaluation, it must make detailed inquiries, collect material and also adequate evidence. When undervaluation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving undervaluation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the courts' proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of undervaluation. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , brass scrap and copper scrap, in LME as on the date of import was more than the price declared by the respondent, demanded additional duty amounting to Rs. 90,248/- and Rs. 1,94,035 respectively, from the assessee on the said two Bills of Entry. This order was set aside by the Tribunal and appeals there against by the Customs were dismissed by this Court. The Court noted, while accepting the plea of the assessee, that they were not confronted with any contemporaneous material relied upon by the Revenue for enhancing the price declared by them in the Bills of Entry. It also noted the following remarks of the Tribunal: "In the present case as mentioned above, even though there is a reference to contemporaneous import in the order passed by the Deputy Commissioner no material regarding such import has been placed before us or made available by the appellant at any point of time. Therefore, assessment in this case has to be taken as having been made purely on the basis of LME bulletin without any corroborative evidence of imports at or near that price which is not permissible under law. We, therefore, set aside the impugned order and allow the appeal." Dismissing the appeals, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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