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2015 (11) TMI 812 - AT - CustomsValuation - Doubting the declared transaction value, the department obtained a quotation - Demand of differential duty - Confiscation of goods - Imposition of redemption fine - Held that:- It is indeed surprising that the whole case has been made on the basis of one quotation. The value has been determined by proceeding sequentially through the Valuation Rules. No contemporaneous data was available. Therefore, as the value could not be determined under Rules 4,5,7 & 8, resort was made to Rule 9 residual method. And as a residual method, by way of best judgment the quotation has been made the basis. - There is a fundamental flaw in the manner of obtaining quotation in that the market enquiry was not conducted in the presence of the appellant or their authorized representative. This amounts to violation of natural justice. The department could have at least verified from two or three more sources for credible evidence. From the procedure adopted, it seems the Department was not serious in conducting investigations through a proper market enquiry. For authentic enquiries the department should have at least sought the purchase invoices and the sale invoices of M/s. Max Flex & Imaging System Pvt. Ltd. to lend credibility to their evidence. Valuation Law under Section 14 read with the Valuation Rules provide a proper method to determine the assessable value if there is a doubt regarding the accuracy of the declared value. A mere suspicion is not enough to reject the transaction value. In the present case the department relies on a quotation without checking whether Star Flex is a Brand or not. The test of satisfying criteria under Rule 4(2) of the Valuation Rules must be passed first before seeking to enhance the value. It has not even been explained how contemporaneous data was not available. Fixing of floor prices indicates that the goods are frequently imported . A question arises why floor prices should be fixed if there are no other imports. Transaction value cannot be rejected on basis of a quotation which gives domestic retail sale price. If this were to be accepted, it would cause unimaginable distortion in interpreting the Valuation Law. - percentage of excess miniscule. Moreover the duty is on specific rate basis i.e. on weight basis. And the weight was declared correctly. We see no mischief or any attempt to evade duty. Therefore we hold that confiscation is not warranted. - re-determined values are unsustainable in law. Consequently confiscation, the demands of duty and penalties are set aside. - Decided in favour of assessee.
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