9911796707
TMI Blog2024 (6) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... therwise. Instead, we find that the impugned order has referred to rule 4 and rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 in one breath without any indication of circumstances and the imports in which rule 4 would apply or those relating to rule 9 for adjustment of transaction value of identical goods should. Thus, we find that the rejection of declared value as transaction value , for the purpose of assessment and for confiscation, is not in consonance with section 14 of Customs Act, 1962 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It would appear that the investigation had failed to take note of the altered paradigm of valuation and preferred to regress to an erstwhile regime that appeared more conducive to proceeding against imports; it could well be that the investigation was also undertaken far too soon after the change in rules for the evidence that had been marshaled to be fitted into the altered paradigm. We are constrained to observe so as show cause notice is the root of any detriment under customs law. That a show cause notice is not congruent with a valuation system that has been enacted is merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only cryptic but also demonstrates absence of legal sanctity for enhancement which is evident in deployment of expressions in common use under the erstwhile rules and, probably, that which was commonplace in central excise. Setting out the background, Learned Counsel submitted that the appellant is a manufacturer of antenna and cables and that, in addition to production and assembly, they had been importing finished products for domestic supply which is the source of dispute over value for having been imported from an associate entity in China. He submitted that it is common ground that these did originate from manufacturing facilities of their own conglomerate but neither was this aspect concealed nor any statutory mandate breached inasmuch as the appropriate declaration of transactional engagement had been duly furnished. He pointed out that relationship aspect of the transaction, in accordance with the then prevailing practice, had been taken up for scrutiny by the special valuation branch (SVB) - a specialized office established in major customs houses to evaluate any bias in sale price far removed from the routine of subjecting independent transactions to scrutiny for asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, detain ourselves with enlarging upon, or ascertainment from, precedent decisions relied upon by either side. 6. At the outset we take notice that the adjudication order lacks indication of any details of the imports having been considered; nor of the contemporaneity of the bills of entry adopted for benchmarking. There are also, as pointed out by Learned Counsel, liberally scattered references to normal price and arms length which, in the context of the specific and precise framework of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, has neither bearing on, nor contemporary relevance in, re-determination of assessable value. The claim of the appellant of declared value being in conformity with transfer price policy of the conglomerate was disposed off with the finding that 24.2 Investigation of documents viz. Bills of Entry, Packing List, Invoices reveals that in case of unrelated buyers it was noticed that import of telecom antennae imported by unrelated buyers in India were supplied by M/s. Andrew China and the terms of invoicing (TOI) and transaction was on Free on Board (FOB) /Free Carrier (FCA) basis. It would appear that the distinction between ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is perceptible is superficial reference to annexures to the show cause notice; the adoption of these, in toto and along with the derivational computation thereof, without any discussion on correctness of the formulation for adjustment of the transaction value of identical goods to arrive at the applied value is not consistent with law or desired demarcation of investigation from adjudication which, increasingly so and of late, is hard put to find. 8. The issue in dispute are not on the narrated facts, nor on the discarded counters of appellant, in the impugned order but on the imperviousness of customs authorities to the rigour, prescribed by law for repudiating declared value, that is manifest in the evolution of formulations underlying the Rules framed, from time to time, under the authority of section 14 of Customs Act, 1962. To start with, customs law was not enacted with intent to set price in commercial intercourse; it is only empowered to provide the framework for its acceptability as value in assessment. The Central Government is empowered to set out terms compatible with the enunciation of value in section 14 of Customs Act, 1962 and likewise, independently and additionall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinguishing the intent to adopt one of the two available, but mutually exclusive, options for proceeding with substitute value , viz., relationship influencing price or reasons to doubt truth or accuracy of transacted price. Even that substitute value which has been adopted appears to be drawn from rule 4/rule 9 evidencing uncertainty that is anathema to such re-determination. No reasons have been assigned for mixing the two either. It is also very clear from rule 3(3)(c) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 that the process of recourse to the proviso therein and determination of value should not flow from the same underlying provisions. There has, thus, been a re-determination which has no basis in law that suffices to set aside the impugned order. Furthermore, the peremptory discard of transfer pricing policy , and apparently because the investigation had failed to address any lacunae in the show cause notice, suffices to question recourse to relationship having influenced price as the basis for proceeding under rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. 12. That, possibly, may have prompted recou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transaction value of identical goods should. 14. In view of the above, we find that the rejection of declared value as transaction value , for the purpose of assessment and for confiscation, is not in consonance with section 14 of Customs Act, 1962 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It would appear that the investigation had failed to take note of the altered paradigm of valuation and preferred to regress to an erstwhile regime that appeared more conducive to proceeding against imports; it could well be that the investigation was also undertaken far too soon after the change in rules for the evidence that had been marshaled to be fitted into the altered paradigm. We are constrained to observe so as show cause notice is the root of any detriment under customs law. That a show cause notice is not congruent with a valuation system that has been enacted is merely demonstrative of disrespect for the law but for an adjudication order to draw upon it as sanctified, and probably from its provenance, conclusion is erroneous implementation of law. That caveat is necessary because an inferential show cause notice, while not desirable, does compri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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