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2023 (7) TMI 665 - CESTAT MUMBAIValuation - tug towing a barge - inclusion of freight - It was contended that, the tug arrived on its own propulsion that did not involve payment of any freight at all and the barge, towed by the said tug, did not incur any additional charges on freight. - Re-ascertainment of assessable value - rejection of declared value - HELD THAT:- The age of both the tug and the barge are irrelevant in the proceedings which rests upon non-fulfillment of requirement pertaining to declaration of cargo brought into India in import general manifest and incorrectness of the value declared in the bill of entry for assessment. The confiscation and penalties merely follow from the findings of the adjudicating authority on these violations. Two parties, buyer and seller, are essential, and that too at the time and place of importation, to a transaction envisaged in section 14(1) of Customs Act, 1962 and, thereby, to rule 3 (1) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 failing which recourse must be had to rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The assessment has necessarily to take recourse to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 on the basis of framework prescribed therein. While certificate of chartered engineer may serve in assisting the assessing officer, it lacks the statutory credibility inhering in application of mind, in accordance with the Rules, by the proper officer. No reason has been assigned by the adjudicating authority for adoption of the value and nor is there any narration of ascertainment of the correctness of the value declared in the certificate obtained after arrival of the vessels - adjustment under rule 10, under the authority of rule 3(1), of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and in the event of adoption of rule 4 or rule 5 therein for arriving at transaction value, with no reference in rule 7, rule 8 and rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for such adjustment, precludes lack of authority of law for the addition of freight to the barge. The recourse to rule 3(4) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 has not been in conformity with the framework of the mechanism for resort to section 14(2) of Customs Ac, 1962. Insofar as the tug is concerned, the declared value had been accepted and it is only the addition of freight and insurance that was in question - recourse to rejection of declared value is an assessment exercise arising from the specific circumstances in which rule 12 provides the means. Rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 stands on a different footing as freight and insurance is, by default, presumed to be included in the declared value. In the instant case of the tug, it is an undisputed fact that there was no transaction involved at the time and place of entering into India - In the case of the import in question, with no expense having been borne on account of any other person till the time and place of importation, these elements are beyond the pale of ascertained value. Revenue is in appeal against incomplete adjudication, as it were, in the impugned order for ignoring failure to declare the goods at the time of import and for not imposing penalty under section 114AA of Customs Act, 1962, As the issue of valuation of the tug and barge had been adjudged improperly by not being in conformity with section 14 of Customs Act, 1962, it has to be re-determined in terms of the legal provisions. The appeal of Revenue, by not challenging the acceptance of the purchase price of the tug for which reason it is to be kept out of de novo proceedings and as all other issues remain open, is thus, rendered infructuous. Matter remanded back to original authority for fresh decision - appeal allowed by way of remand.
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