2014 (9) TMI 947 - AT - Customs

Rejection of transaction value - lower appellate authority has come to the opposite conclusion and has held that the relationship has influenced the transaction value and therefore the value declared by the appellant for the goods imported is not acceptable and has to be loaded by franchisee fee of 5% in terms of the franchise agreement and any other charges under Rule 10(l)(c) of Customs Valuation Rules - Held that - From the records of the case it is seen that the order of the assessing officer was received by the Commissioner of Customs (Imports) the reviewing authority on 21-2-2011. Another copy of the order was also received by the Assistant Commissioner of Customs Review Cell on 25-2-2011. Section 129D(3) of the Customs Act 1962 mandates that review of the order under sub section (1) or sub-section (2) as the case may be shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority. Since the reviewing authority has received the order on 21-2-2011 the period of 3 months has to be computed from that date and if that is done the time for passing the review order expires on 21-5-2011. In the present case the order of review has been passed only on 24-5-2011. Since time limit has been prescribed statutorily the same has to be adhered to without any exception. Therefore review order passed by the Commissioner of Customs (Imports) for filing of the appeal before the lower appellate authority is clearly unsustainable and thereby making the appeal itself not maintainable before the lower appellate authority. - impugned order passed by the lower appellate authority is unsustainable in law and accordingly the same is set aside - Decided in favour of assessee.

Summary

Issues involved: Time-bar for review order under Section 129D(3) of the Customs Act, 1962; Rejection of transaction value and inclusion of franchise fees and other payments.

Analysis:

1. Time-bar for review order under Section 129D(3) of the Customs Act, 1962:
The appeal stemmed from an Order-in-Appeal that set aside an assessment order due to the influence of the relationship on the transaction value of imported goods. The appellant imported garments from a related entity and declared the transaction value based on a specific calculation method. The assessing officer disagreed with this value, leading to the dispute. The appellant argued that the appeal was not maintainable before the lower appellate authority due to a delay in the review order. The Commissioner of Customs (Imports) received the order on 21-2-2011, and the review order was passed on 24-5-2011, four days after the statutory three-month period expired. The Tribunal held that the statutory time limit must be adhered to without exception, rendering the review order and subsequent appeal not maintainable due to being time-barred.

2. Rejection of transaction value and inclusion of franchise fees and other payments:
The Revenue, represented by the Additional Commissioner, supported the lower appellate authority's decision to reject the transaction value declared by the appellant and include franchise fees and other charges. The Tribunal noted that the lower appellate authority's decision was based on the influence of the relationship on the transaction value, leading to the inclusion of additional charges. However, due to the time-bar issue discussed earlier, the Tribunal did not delve into the merits of the case. Despite not discussing the merits, the Tribunal hinted that prima facie, the appellant had a case based on the evidence available. Consequently, the Tribunal set aside the lower appellate authority's decision as not maintainable on account of the time-bar, allowing the appeal with consequential relief if applicable.

In conclusion, the Tribunal's judgment focused on the procedural aspect of the time-bar for the review order under Section 129D(3) of the Customs Act, deeming the appeal not maintainable due to the delay in passing the review order. The rejection of the transaction value and inclusion of additional charges were not thoroughly analyzed due to the primary issue of the time-bar.