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TMI Blog2023 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... importer to provide material/evidence to justify the declared value in terms of Section 17(3) of the Customs Act, 1962. In response, the importer submitted his reply, however, the same was not accepted. The assessing officer vide Order-in-original dated 17.02.2021 rejected the declared value under Rule 12(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (hereinafter referred as CVR, 2007) on the ground that the declared value of impugned goods, i.e., Rs. 107/- per kg. was lower than the value of similar goods being cleared at Rs. 157/- to Rs. 169/- per kg. as per the details of bills of entry given in Table 'B'. 3. Being aggrieved, by the said order, the importer filed appeal which find favour with the Commissioner (Appeals). Referring to the provisions of Section 14 and 17 of the Customs Act, 1962 and Rule 12 of CVR Rules, 2007 and also various decisions on the subject, he concluded that the assessing officer failed to elaborate as to how the bills of entries referred for enhancement are comparable with the goods imported through disputed bills of entries and in view thereof held that the rejection of transaction value is unsustainable. The reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf: Provided further that the rules made in this behalf may provide for,- (i) the circumstances in which the buyer and the seller shall be deemed to be related; (ii) the manner of determination of value in respect of goods when there is no sale, or the buyer and the seller are related, or price is not the sole consideration for the sale or in any other case; (iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods: Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurred by the seller in sales in which he and the buyer are not related; (c) substitute values shall not be established under the provisions of clause (b) of this sub-rule. (4) if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c scrap Saves/Scope/Scabs/Score as per ISRI (FRA reference No. KL-2020-AI-21-011482) INSTT6 24206 KGS 159.12 9981563 16.12.20 Zinc scrap Saves/Scope/Scribe/Shelf as per ISRI INAPL6 19528 KGS 159.47 9842033 05.12.20 Shredded zinc Scrap Saves/Scope as per ISRI INKKU6 25082 KGS 168.78 2054387 21.12.20 Zinc Scrap Saves/ Scope as per ISRI INKKU6 26318 KGS 169.08 Perusal of the above chart do not show that the imports are of identical goods on same commercial level and transaction. Relying on the decision of this Tribunal in the case of SPL Enterprises vs. Commissioner of Customs, New Delhi -2018 (363) ELT 881 (Tri. Del.), it is not clear from the aforesaid details given in the table as to how the said bill of entries were compared with the present bill of entries. As noted in the said decision, for arriving at the contemporaneous value, the level of transaction should be contemporaneous in all respects. Such comparison should take into account the country of origin, quantity imported, terms of such import and period of import etc. 9. From the records of the case and the findings recorded by the adjudicating authority, it clearly appears that there is no eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r export of these imported goods; (g) "transaction value" means the value referred to in sub-section (1) of section 14 of the Customs Act, 1962;" The said two provisions have been considered in a recent decision of the Tribunal in the case of Haripriya Traders vs. Commissioner of Customs, Cochin (2023) 5 CENTEX 209, where the test of 'quality assessment' was referred for ascertaining the nature of goods under comparison. The observations made in para 4.7 are as under:- "4.7 A plain reading of the definition of the term "similar goods" makes it clear that the goods being compared must have like characteristics and like component material, which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality and reputation. This ipso facto makes quality assessment compulsory to ascertain the comparable and interchangeable nature of goods under comparison. In the absence of any material to prove its legal comparison, its contemporaneous nature fails, resulting in non-adoptability of Rule 5. We find that in the instant case, Revenue has not come with any evidence, either in the nature of any reports or documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods imported in India having same chemical and physical composition and that the values of aluminium scrap identical/similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared in the bill of entry. We have also elaborated and explained the legal position with reference to Rule 12 of the 2007 Rules." (Emphasis laid) Applying the analogy as laid down in the aforesaid judgement, the learned Counsel referred that scrap is not a homogenous commodity and it is difficult to find any identical/ similar goods imported in India which will have same che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." 8. Reading Rule 3(i) and Rule 4(1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4(2) namely : (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is behalf. Under Rule 3(i) of the 1988 Rules, the value of the imported goods shall be the "transaction value". Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1), in turn, states that "the transaction value of the imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these Rules." It is clear from a conjoint reading of Rule 3(i) and Rule 4(1) that the adjudicating authority is bound to accept the price actually paid or payable for the goods as the transaction value, except where exceptions enumerated in Rule 4(2) are attracted, which is not the case here. It is, therefore, manifest that both Section 14(1) and Rule 4 provide that in the absence of any of the special circumstances indicated in Section 14(1) and particularised in Rule 4(2) of the 1988 Rules, the price paid by an importer to the seller in the ordinary course of commerce is to be taken as the transaction value for the purpose of valuation of goods." (Emphasis laid) In Aggarwal Industries (supra) the Court observed as under:- 11. On a plain readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority has to examine the probative value of the documents on which reliance is sought to be placed by the revenue. It is well settled that the onus to prove undervaluation is on the revenue but once the revenue discharges the burden of proof by producing evidence of contemporaneous imports at a higher price, the onus shifts to the importer to establish that the price indicated in the invoice relied upon by him is correct. 12. It is a settled principle of law that the onus of proving charge of undervaluation lies on the Revenue which needs to be proved by way of producing necessary evidence. Reliance is placed on the decision of the Apex Court in Mirah Export Pvt. Ltd., vs. Commissioner of Customs -1998 (98) ELT 3 and South India Television-2007(214) ELT 3, Commissioner of Customs vs. Aggarwal Industries -2011 (272) ELT 641. The revenue in the present case except for referring to the bills of entry has not placed on record any further evidence in accordance with the statutory provisions to show that the goods covered under those bill of entries are actually identical to the goods in question to prove that the importer has indulged in undervaluation. Instances given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etin of October 1st, 1999 as it was more proximate to the contract entered into by the Appellants in September, 1999. We agree with the learned Advocate for the Appellants that the said Bulletin for October, 1999 did not contain the price of the imports made in September or October but the imports made in July. Further, there is no indication as to when the contract for those imports was entered into. We, therefore, hold that Revenue has not succeeded in showing that the price shown in the invoices does not reflect the true sale price. We, therefore, set aside the impugned Order and allow the appeal." 13. In the light of the statutory provisions under Section 14 of the Customs Act, 1962, Rule 3 and 4 of CVR, 2007 and the observations made in the various case law, it can be safely concluded that the revenue erred in rejecting the invoice price. I agree with the arguments made by the learned Counsel for the respondent that revenue is unable to provide any clinching evidence to prove undervaluation by the importer so as to reject the transaction value given in the invoice. The impugned order, is therefore affirmed and the present appeal filed by the Department is dismissed and the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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