9911796707
TMI Blog2024 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... value (Free on Board FOB) of a number of times of the duty forgone as indicated in the licence. What the officer decides is the assessable value of the goods under the Customs Act. In the normal course, the transaction value is the assessable value. However, there are exceptions under section 14 read with the Valuation Rules. The Valuation Rules indicate conditions under which the proper officer can doubt the transaction value and reject it. If the transaction value is rejected as the assessable value, then it has to be determined under any of the other methods provided in the Valuation Rules. If the obligation under the Foreign Trade Policy is with reference to FOB value, it can only mean the FOB value as per the agreement between the buyer and the seller which remittance the exporter is also mandated to bring into India as per the FEMA. Whether the Additional Commissioner was correct in rejecting the declared value and re-determining the value under the Customs Valuation Rules based on the Chartered Engineer s certificate? - HELD THAT:- The only basis for alleged over-valuation is the statement of Shri Santosh Kumar Sinha. Even in his statement, he asserted that remittances have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f size 17 X 27 with digital effects. It declared FOB value of U.S. $ 7.65 per piece totaling Rs. 1,45,21,020/-. It also submitted invoice and packing list which showed the same value and the goods were to be exported to its buyer in Sharjah, UAE. This export consignment was examined 100% by the officers in the presence of the customs broker of the exporter and the quantity of the goods was as declared, but the value appeared to be very high. It was also found that the Universal had exported banners under five shipping bills in 2013. The statement of Shri Santosh Kumar Sinha, Manager (Accounts) of Universal who had come to the customs office in connection with the live consignment was recorded on 06.04.2015 under section 108 of the Customs Act, 1962 [Act]. In this statement he said that the cost of the PVC sheet was approximately 80 per kg. and that of ink was Rs. 100/- and 200/- per kg. and the banners were designed in-house by their employee who gets a salary of Rs. 20,000/- to 25,000/- per month. He also said that no other cost was involved in manufacturing the banners, but that the export goods were highly over-valued so that the export obligation could be fulfilled in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposing to:- (i) Reject the declared assessable value of Rs.1,45,21,020/- and re-determine it as Rs. 2,75,400/- as per Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 [Valuation Rules] ; (ii) Confiscate the goods under section 113 (h) (i) ; (iii) Take penal action under section 114 and 114AA and (iv) Restrict the fulfillment of export obligations to the extent of re-assessed value. 7. Neither Universal nor Vikas filed any reply to the SCN. Personal hearing was fixed on 01.05.2018, 24.05.2018, 18.06.2018 and 25.06.2018, but none appeared on behalf of the Universal or Vikas. Thereafter, the Additional Commissioner passed the order-in-original re-determining the value of the export goods, as proposed in the SCN. He also confiscated the goods under section 113 (a) and allowed their redemption on payment of redemption fine of Rs. 35,000/-, imposed a penalty of Rs. 12,00,000/- on Universal under section 114 and penalty of Rs. 50,00,000/- on Vikas under section 114AA. He further held that the fulfillment of export obligation shall be restricted to Rs. 2,75,400/- of the goods admitted to the exported by shipping bill dated 23.03.2015. 8. Aggrieved, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch goods of like kind and quality exported at or about the same time, significantly higher value compared to the market value of goods of like kind and quality at the time of export and mis-declaration of description, quality, quantity, year of manufacture or production etc. None of these are present in this case ; (x) No prudent businessman would import goods at a price higher in the international market value ; (xi) There is no evidence of over-valuation of goods nor any cash trail of the amount flowing back to the overseas importer. 10. In view of the above, it has been prayed that the impugned order may be set aside and the appeal may be allowed with consequential relief to Universal and to Shri Vikas. 11. Learned authorized representative for the revenue vehemently supported the impugned order and asserted that it is correct and proper and calls for no interference. 12. We have considered the submissions advanced by the learned counsel for the appellant and learned authorized representative for the revenue and perused the records. 13. The short questions to be answered are : whether the Commissioner (Appeals) was correct in upholding the decision of the Additional Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n value is the assessable value. However, there are exceptions under section 14 read with the Valuation Rules. The Valuation Rules indicate conditions under which the proper officer can doubt the transaction value and reject it. If the transaction value is rejected as the assessable value, then it has to be determined under any of the other methods provided in the Valuation Rules. 17. What needs to be noted is the customs officer does not and cannot alter the transaction value, but can only reject the transaction value and re-determine the assessable value through some other methods. An illustration will make the distinction clear. A , living in U.K., sells his luxury car to B in India for GBP 1,000/-. The Customs Officer, finding this value too low and not reflecting the true value of the car, rejects this transaction value and re-determines the value of the car as GBP 10,000/-. Duty has to be paid as per the re-determined assessable value of GBP 10,000/-. However, the transaction value continues to be GBP 1,000/- and will not change. Therefore B has to remit only GBP 1,000/- to A as consideration for the car as agreed to between them. However, he will have to pay duty on the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or accuracy of the value declared in relation to the export goods by such exporter and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1) . 21. As may be seen it requires a proper officer to have some reason to doubt the truth or accuracy for the value declared and if he does he can call for further information. On receiving additional information or in the absence of any response, if the proper officer still has reasonable doubt about the truth or accuracy of the value declared it shall be deemed that the value cannot be determined as per the transaction value and then it can be determined sequentially through Rule 4 to 6. Rule 4 provides for determination of value of the export goods based on the transaction value of goods of like, kind and quality exported act or about the same time to other buyers in the same destination country. Rule 5 provides for a computed value based on the cost of production or manufacture, or processing of export goods, charges if any for the designer or brand and an amount towards profit. Rule 6 is the residual method to be employed if the value cannot be determined as per Rule 4 and 5 using reasonable mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Sinha. Even in his statement, he asserted that remittances have been received as per the value declared in the shipping bills in the past in the account of the exporter. He said that the amounts were further distributed to other paper companies and he does not know how the money was returned to the buyer in UAE. Even if the statement is taken at face value, the remittances were received as per the declared transaction value. There is no allegation, let alone evidence, of any flow back to the buyer. The second ground for rejection is that the cost of the raw material including inks and the cost of printing of the banners, which were to be exported was much lower than the transaction value. The third reason given is that the value of such banners in the domestic market is much lower. The fourth reason is the report of the Chartered Engineer who determined the cost of production of the goods. In our considered view, these do not form sufficient grounds to reject the transaction value under Rule 8. The cost of manufacture of the goods could be much lower than the export price. What needs to be checked is that the values are consistent on the values of goods like, kind and quality ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
