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TMI Blog2019 (10) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... a regular basis, imports aluminium scrap through various ports like ICD Dadri, ICD Palwal, ICD Piyala and ICD ACTL Ballabhgarh. 3. The appellant purchases aluminium scrap of different grade/ specification from suppliers all over the world. The appellant enquires about the availability and price of aluminium scrap of a particular grade/ specification from suppliers all over the world. By way of reference reliance is placed upon a chat (email) between Mr. Nitin Tyagi of the appellant and a prospective supplier Mr. Jatin Ahuja, which culminated into a contract. After various rounds of negotiations, the appellant enters into a contract with the supplier offering aluminium scrap, as per the requirements of the appellant at the lowest price, amongst the suppliers approached by the appellant, considering the quality aspects. 4. The appellant filed various bills of entry declaring therein the self assessed value, which was the invoice value (transaction value), at which the aluminium scrap was imported. The Assessing officer re-assessed all the impugned bills of entry and enhanced the transaction value, declared by the appellant, without disclosing the basis for such enhancement, and wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant's case, as appellant has imported scrap and not prime metal. The value of scrap is always lower than the value of prime metal. Scrap is after all obtained from unserviceable, defective or worn out prime metal or on processing of prime metal. 13. Ld. Counsel further urges that the declared transaction value in the bill of entry is the basis for levy of duty, as provided in Section 14 of the Customs Act, which provides that for the purpose of the Customs Tariff Act or any other law for the time being enforced, the value of imported goods and export goods shall be the transaction value of such goods, that is to say the price actually paid or payable for the goods, when sold for export to India for delivery at the time and place or importation, or, as the case may be, for export from India for delivery at the time and place of importation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale of subject goods or such other consideration, as may be specified in the Rules made in this behalf. 14. Further, sub section 2 of Section 14 provides that, notwithstanding anything contained in the provision of sub Section (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value. 11. In South India Television (P) Ltd., 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. Following discussion in the said judgment needs to be quoted hereunder : "10. We do not find any merit in this civil appeal for the following reasons. Value is derived from the price. Value is the function of the price. This is the conceptual meaning of value. Under Section 2(41), "value" is defined to mean value determined in accordance with Section 14(1) of the Act. Section 14 of the Customs Act, 1962 is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to establish that the invoice relied on by him is valid. Therefore, the charge of underinvoicing has to be supported by evidence of prices of contemporaneous imports of like goods. 13. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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