2019 (2) TMI 1259 - AT - Customs

Valuation of imported goods - Styrene Monomer - rejection of declared value - enhancement of value - Held that - The appellant had placed an order at the price of USD 872.50 which was almost 30% and 40% below the prevailing price. If the price was arrived at as per the agreement entered into between the supplier and the buyer, the price would have been USD 1333 PMT - there are significant force in the arguments in the impugned order to reject the price declared by the appellant - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against rejection of declared value and re-determination of Styrene Monomer's value.

Analysis:
1. The appellant argued that the price was negotiated as per the agreement with the foreign supplier, BASF South East Asia Pte. Ltd. The agreement was approved by the GATT valuation cell, and the price was determined as per the specified clauses.

2. The appellant highlighted the global economic meltdown in 2008, resulting in a significant fall in crude oil prices. They placed an order for Styrene Monomer at a negotiated rate of USD 872.50 PMT. The appellant claimed that the impugned order rejected this price without valid reasons.

3. The appellant relied on legal precedents to support their argument that the declared price cannot be rejected arbitrarily under Section 14(1)(a) of the Customs Act. They emphasized the need for cogent reasons to reject the declared value.

4. The respondent contended that the purchase order was placed at a price significantly lower than the prevailing market rate, indicating a discrepancy. They pointed out inconsistencies in the email correspondence and order details, questioning the legitimacy of the negotiated price.

5. The Tribunal examined the evidence presented by both parties. It noted that the appellant's order at USD 872.50 PMT was substantially lower than the prevailing market prices. The Commissioner (Appeals) observed discrepancies in the purchase order and invoice details, suggesting a possible attempt to exploit a sudden price crash for duty evasion.

6. The Tribunal found merit in the Commissioner's observations and concluded that the negotiated price was not in line with the contract terms. It upheld the rejection of the declared value and dismissed the appeal.

Overall, the judgment underscores the importance of adhering to contract terms in determining import values and highlights the need for transparency and consistency in pricing agreements to prevent duty evasion.