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2025 (2) TMI 1174 - AT - CustomsEnhancement of assessable value of imported goods by adopting the NIDB (National Import Data Bank) data without following the prescribed statutory procedure under Section 14 of the Customs Act and the Customs Valuation (Determination of Value of Imported Goods) Rules 2007 - HELD THAT - The similar issue has been dealt by this Tribunal in the case of Commissioner of Customs (Port) Kolkata Vs. M/s Bajaj Writing Aid vide Final Order No. 77599/2023 dated 31.10.2023 2023 (10) TMI 1522 - CESTAT KOLKATA wherein this Tribunal has held the Department has not made any attempt to follow the procedure given under the Valuation (Determination of Value of Importers Goods) Rules 2007 and has simply adopted the NIDB data and selectively enhanced value. As discussed above the Commissioner (Appeals) has given a detailed finding along with reasons while setting aside the Order-in-Original. We do not find any reason to interfere with the same. Conclusion - The enhancement of value based solely on selective NIDB data without adherence to statutory provisions and without valid reasons is unsustainable. The appeal filed by the Revenue is dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal are: (a) Whether the enhancement of customs assessable value based on NIDB data without following the prescribed statutory procedure under Section 14 of the Customs Act and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 is legally sustainable. (b) Whether the transaction value declared by the importer can be rejected without valid reasons or evidence indicating that the declared value does not represent the true price paid or payable for the imported goods. (c) Whether the selective or "pick and choose" approach adopted by the Department in using comparative data from other import cases to enhance the value of the goods is permissible in law. (d) Whether the impugned order of the Commissioner (Appeals) setting aside the enhancement of value was justified and whether the Tribunal should interfere with that order. 2. ISSUE-WISE DETAILED ANALYSIS Issue (a): Legality of enhancement of customs value without following statutory procedure The relevant legal framework includes Section 14 of the Customs Act, which governs the determination of the assessable value of imported goods, and the Customs Valuation Rules, 2007, which prescribe the procedure for valuation. The transaction value declared by the importer is the primary basis for valuation unless it is shown to be unacceptable under the provisions of Section 14 and the Rules. The Tribunal referred to precedents, notably the decision in Commissioner of Customs (Port), Kolkata Vs. M/s Bajaj Writing Aid, and the case of Commissioner of Customs (Port), Kolkata Vs. M/s. Krishna Wax Pvt. Ltd., where it was held that rejection of transaction value without valid reasons and without following the prescribed procedure is impermissible. The Tribunal emphasized that no speaking order or valid justification was recorded by the assessing officer for enhancement of value. The Court noted that the Department did not follow the procedure under Section 14 and the Valuation Rules but merely adopted data from the National Import Database (NIDB) to enhance values. This approach was held to be inconsistent with the statutory mandate, which requires adherence to a structured valuation process before rejecting declared transaction values. The Tribunal concluded that enhancement of value without statutory sanction is liable to be set aside. Issue (b): Validity of rejecting declared transaction value without evidence The Tribunal examined whether the Department had any evidence to disprove the declared transaction value. It was found that there was no record indicating that the declared invoice value did not represent the price actually paid or payable. No evidence was produced to show any additional payments beyond the invoice value or that the buyer and seller were related parties affecting the price. The Tribunal reiterated that in absence of such evidence, the declared transaction value must be accepted as the assessable value. This principle aligns with the Customs Valuation Rules which prioritize transaction value unless rebutted by valid proof. Therefore, the rejection of declared value without substantiation was held to be unjustified. Issue (c): Legality of selective adoption of comparative data ("pick and choose" approach) The Tribunal scrutinized the Department's use of NIDB data to enhance value, noting that only selective data of 88 cases out of 1341 similar cases were provided to the appellant, indicating a "pick and choose" approach. The Tribunal cited the Principal Bench decision in M/s Margra Industries Vs. Commissioner of Central Excise, which condemned such selective use of comparative data for valuation enhancement. The Tribunal observed that such an approach is contrary to market realities and the valuation rules, which require a fair and consistent comparison of values. The selective acceptance of higher prices and rejection of lower prices was held to be illegal and not permissible under the law. This reasoning was further supported by the Supreme Court's endorsement of similar principles, reinforcing that valuation must be based on genuine transaction values and cannot be artificially inflated by selective comparisons. Issue (d): Justification for upholding the Commissioner (Appeals) order The Commissioner (Appeals) had set aside the enhancement of value by the assessing officer, providing detailed reasoning that the Department had not followed due procedure, lacked valid evidence, and had adopted an impermissible selective approach. The Tribunal found no infirmity in the Commissioner (Appeals) order and respectfully followed the ratio of the earlier Tribunal decisions. The Tribunal emphasized that the enhancement of value was without legal sanction and therefore unsustainable. The Tribunal declined to interfere with the impugned order, thereby dismissing the Revenue's appeal. 3. SIGNIFICANT HOLDINGS "The assessing officer has rejected the transaction value without any valid reasons and without new procedure as per Section 14 and valuation rules especially, there is nothing on record that the appellant has imported the secondary items but the value was considered for the fresh items. No speaking order was passed for enhancement of value. There is nothing on record to suggest that the buyers and sellers of the goods are related persons. Therefore the enhancement of the value is likely to be struck down and rightly struck down by the Commr. (Appeals)." "The Revenue's acceptance of higher prices and rejection of lower prices for assessment is clearly illegal." "From the above it is found that the assessing officer has rejected transaction values without any valid basis/reasons and without following the due procedure as per section 14 and Valuation Rules, especially when there is nothing on record to suggest that the transaction value declared by the appellant was not the price actually paid for the good when sold for export to India." "The enhancement of values done in this case is without having any sanction of law and is thus liable to be set aside outrightly." Core principles established include:
Final determinations:
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