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2019 (2) TMI 1508 - AT - CustomsValuation of imported goods - silver polyester metal yarn - polyester metallic yarn (kasab) - undervaluation - rejection of declared value - enhancement of declared value - Held that:- From the records, it would appear that the rejection of the values declared in the bills of entry, and the consequent confirmation of differential duty emanating from re-determination of value, is based entirely on the admissions in the statements of Shri Rajesh Gandhi recorded during the course of investigations. The show cause notice proposes to discard the declared value as a prelude to re-ascertainment of assessable value for determination of the correctness of duty assessed at the time of clearance of the goods. In the scheme of assessment to duties of customs that are leviable on ad valorem, the provisions of section 14 of Customs Act, 1962 are activated. Value of goods, whether viewed from the perspective of commercial practice or economic theory, is not amenable to scientific formulation and further complicated by transactions occurring across boundaries of legal jurisdictions with differing policy practices - In the scheme of valuation, it is trite that the transaction value, evident from invoices, of the goods that are imported is to be the assessable value. Not unnaturally, there are presumptions for such acknowledgement which are embodied as combinatorial expressions in section 14 (1) of Customs Act, 1962. Any transaction that lacks any one or more of the qualifications prescribed therein should, necessarily, be externed from its ambit with recourse to section 14 (2) of Customs Act, 1962 and, thereby, within the coverage of Rules framed thereunder. It is clear from the records that the appellants had not been able to produce any evidence that would counter the grounds for discarding the declared value. To that extent, the declared values can be found to be unacceptable. However, the consequences of such discrediting is not an arbitrary determination of value. The provisions of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 require that sequential application to be apparent in such proceedings - Insofar as the valuation of goods, based on applicability of rule 6 of the said Rules is concerned, it is seen that the bills of entry pertaining to those imports had not been made available to the appellants. Neither are the details of those bills available on record. It is, therefore, impossible to ascertain if these were ‘similar goods’ within the definition in the said Rules. The rigour articulated in re Eicher Motors Ltd is not in evidence in the impugned order. Consequently, the re-determination of value fails the test of law. Confiscation - penalties - Held that:- With the lack of approbation for enhancement of value, there is no offence that renders the goods liable to confiscation under section 111 of Customs Act, 1962. In the absence of justification for invoking the provisions for confiscation of goods, penalties under section 112 of Customs Act, 1962 fails in relation to the importer-appellants and the partner of such important entity. Appeal allowed.
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