TMI Blog2020 (6) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... to by Adjudicating Officer nor such material was placed before Tribunal. Revenue has not been able to controvert the said Tribunal s observations. On the various issues, such as whether after giving consent by the importer, the value can be enhanced, whether enhancement can be made on the basis of DGOV circular have been considered and conclusively held that in such circumstances invoice prices cannot be disputed and enhancement of the value cannot be made - Appeal allowed - decided in favor of appellant. - Customs Appeal No. 12338 of 2019 to 12393 of 2019, 12765 of 2019 to 12845 of 2019 - A/10889-11025/2020 - Dated:- 29-5-2020 - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) AND HON BLE MR. RAJU, MEMBER (TECHNICAL) Shri S. Deepak Kumar, Consultant for the Appellant Shri S. Airan, Assistant Commissioner (Authorised Representative) for the Respondent ORDER RAMESH NAIR All these appeals relating to the appellants involved identical issue of valuation of various types of aluminum scrap namely Taint Tabor, Tread, Tense, Zorba, Talk, Troma, terse, Twitch, Telic, etc. imported from various countries during the period August 2018 to May 2019. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 2017 (7) G.S.T.L 82 (Tri-All.) (4) Prabhu Dayal Prem Chand 2010 (253) ELT 353 (S C) (5) South India Television (P) Ltd. 2007 (214) ELT 3 (SC) (6) Kuber India 2016 (340) ELT 404 (Tri- Del.) (7) Nico Extrusions Pvt. Ltd.2019 (369) ELT 1183 (Tri Mumbai) (8) Andrew Telecommunication Pvt. Ltd. 2018(362) E.L.T. 896 (Tri- Mumbai) (9) Ankit Electronics 2013 (294) E.L.T 336 (Tri- Del.) (10) Bharathi Rubber Lining Allied Services P. Ltd. 2013 (287) ELT 124 (Tri- Mumbai) (11) Palco Metals Limited 2009 (234) E.L.T. 472 (Tri-Ahmd.) (12) Modern Manufacturers 2018 (363) ELT 1020 (Tri Del.) (13) Raj Kumar Shivhare 2010 (253) ELT 3 (SC) (14) Northern Plastics Ltd. 1997 (91) E.L.T. 502 (S.C) (15) Arignar Anna Sugar Mills 2012 (277) E.L.T. 63 (Mad.) (16) Rabindra Chanda Paul 2007 (209) E.L.T. 326 (S.C) (17) Tamil Nadu Petro Products Ltd. 2008 (226) ELT 51 (Mad.) (18) Pushpak Metal Corpn. 2014 (312) ELT 381 (Tri-Ahmd.) 3 Shri Sharad Airan, Learned Assistant Commissioner (Authorised Representative) appearing on behalf of the Revenue reiterates the findings of the order of the Commissioner (Appeal). He also relied on the decision of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have been allowed straightaway by accepting the transaction value given by the respondent/assessee and another opportunity should have been given to the Assessing Authority in this behalf. 7. This argument may seem to be attractive, but only when there is a cursory look at the aforesaid observations of the Tribunal that the Assessing Officer did not examine the evidence available with the Department which was necessitated for such a purpose. However, the observations of the Tribunal have to be understood in their entirety and in the context in which these are made. The Tribunal has categorically mentioned that as per the provisions of Section 14 of the Customs Act and the principles laid down in the case law (which it referred to in the earlier part of the judgment) interpreting this provision, the assessable value has to be arrived at on the basis of the price which is actually paid. It is the basic principle enshrined in the aforesaid provision, i.e., Section 14, which can be culled out from the catena of judgments pronounced by this Court. 8. In Eisher Tractors Ltd., Haryana v. Commissioner of Customs, Mumbai-1, (2001) 1 SCC 315 = 2000 (122) E.L.T. 321 (S.C.), this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined on the basis of identical goods imported into India at the same time; Rule 6 allows for the transaction value to be determined on the value of similar goods imported into India at the same time as the subject goods. Where there are no contemporaneous imports into India, the value is to be determined under Rule 7 by a process of deduction in the manner provided therein. If this is not possible the value is to be computed under Rule 7A. When value of the imported goods cannot be determined under any of these provisions, the value is required to be determined under Rule 8 using reasonable means consistent with the principles and general provisions of these Rules and sub-section (1) of Section 14 of the Customs Act, 1962 and on the basis of data available in India . If the phrase the transaction value used in Rule 4 were not limited to the particular transaction then the other rules which refer to other transactions and data would become redundant. xxx xxx xxx 22. In the case before us, it is not alleged that the appellant has misdeclared the price actually paid. Nor was there a misdescription of the goods imported as was the case in Padia Sales Corpn. [1993 Supp. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is also the effect of Rule 3(1) and Rule 4(1) of the Customs Valuation Rules, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value. Exceptions are, however, carved out and enumerated in Rule 4(2). As per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other. In order to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value. 11. In South India Television (P) Ltd., the Court explained as to how the value is derived from the price and under what circumstances the deemed value mentioned in Section 14(1) can be departed with. Following discussion in the said judgment needs to be quoted hereunder : 10. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te evidence. When undervaluation is alleged, the Department has to prove it by evidence or information about comparable imports. For proving undervaluation, if the Department relies on declaration made in the exporting country, it has to show how such declaration was procured. We may clarify that strict rules of evidence do not apply to adjudication proceedings. They apply strictly to the Courts proceedings. However, even in adjudication proceedings, the AO has to examine the probative value of the documents on which reliance is placed by the Department in support of its allegation of undervaluation. Once the Department discharges the burden of proof to the above extent by producing evidence of contemporaneous imports at higher price, the onus shifts to the importer to establish that the invoice relied on by him is valid. Therefore, the charge of underinvoicing has to be supported by evidence of prices of contemporaneous imports of like goods. 13. Section 14(1) speaks of deemed value . Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a highe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court noted, while accepting the plea of the assessee, that they were not confronted with any contemporaneous material relied upon by the Revenue for enhancing the price declared by them in the Bills of Entry. It also noted the following remarks of the Tribunal : In the present case as mentioned above, even though there is a reference to contemporaneous import in the order passed by the Deputy Commissioner no material regarding such import has been placed before us or made available by the appellant at any point of time. Therefore, assessment in this case has to be taken as having been made purely on the basis of LME bulletin without any corroborative evidence of imports at or near that price which is not permissible under law. We, therefore, set aside the impugned order and allow the appeal. Dismissing the appeals, this Court observed as follows : ....It is manifest from the aforeextracted order of the Tribunal that no details of any contemporaneous imports or any other material indicating the price notified by LME had either been referred to by the adjudicating officer in the adjudication order or such material was placed before the Tribunal at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Having considered the rival contentions and on perusal of record, we find that the Original Authority was directed by the Hon ble High Court to pass speaking order on the enhancement of assessable value. We find that the Original Authority in its Order-in-Original dated 25-3-2015 has passed comments on the grounds of writ petition and did not properly examine the evidence available with the department required to be examined for enhancement of assessable value. Further, we find that as held in the case laws stated above and as provided by Section 14 of Customs Act, 1962, the assessable value has to be arrived at on the basis of the price which is actually paid and in a case the price is not sole consideration or if the buyers and sellers are related persons then after establishing that the price is not sole consideration the transaction value can be rejected and taking the other evidences into consideration the assessable value can be arrived at. Such exercise has not been done in these cases on hand. Therefore, we reject the enhancement of assessable value in respect of the Bills of Entry which are involved in all the appeals being decided and we restore the assessable val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction value pointing out therein that on account of delay in the clearance of the imported consignments, the appellants and its sister concern had been compelled to pay excess duty of over ₹ 25 crores from August 2013 onwards. It is unfortunate and has to be accepted that the respondent authorities had compelled and forced the appellant to furnish the letter dated 6th March, 2017 thereby waiving of its right to provisional assessment and accepting valuation in terms of Rules 4 to 10. As per sub-rule (2) of Rule 12, the proper officer when required must intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared. The said mandate of sub-rule (2) of Rule 12 cannot be ignored or waived. Formation of opinion regarding reasonable doubt as to the truth or accuracy of the valuation and communication of the said grounds to the importer is mandatory, subterfuge to by-pass and circumvent the statutory mandate is unacceptable. Formation of belief and recording of reasons as to reasonable doubt and communication of the reasons when required is the only way and manner in which the proper officer in terms of Rule 12 can proceed to make assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um scrap identical/similar to the imported goods in nature and specification were not available. Without commenting on correctness of the said statements, we would observe that the aforesaid reasoning for rejection of the transactional value, would not meet the mandate of Section 14 and the Rules as elucidated in M/s. Sanjivani Non-Ferrous Trading Pvt. Ltd. (supra) wherein it was held that the transaction value mentioned in the bill of entry should not be discarded unless there are contrary details of contemporaneous imports or other material indicating and serving as corroborative evidence of import at or near the time of import which would justify rejection of the declared value and enhancement of the price declared in the bill of entry. We have also elaborated and explained the legal position with reference to Rule 12 of the 2007 Rules. 24. Therefore, in the facts and circumstances of the present case, it has to be held that the adjudication order in original is flawed and contrary to law for it does not give cogent and good reason in terms of Section 14(1) and Rule 12 for rejection of the transaction value as declared in the bill of entry. The order in original is not in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, we allow the present appeal and quash and set aside the order of Assessment dated 7th April, 2017 by issuing a writ of certiorari. In the facts of the case, there shall be no order as to costs. 4.5 In view of the above judgments it is clear that when the enhancement was not based on any contemporaneous import, in the present case, particularly, when the invoice price of the appellant was not disputed on the basis of any evidence of wrong declaration of the value, the enhancement in the present case is illegal and incorrect. 4.6 In the case of Prabhu Dayal Prem Chand (supra), the value was enhanced on the basis of LME price and assessee was not confronted with any contemporaneous material. The Hon ble Supreme Court held that Tribunal order manifesting the detail of any contemporaneous imports or any material undertaking price notified by LME neither referred to by Adjudicating Officer nor such material was placed before Tribunal. Revenue has not been able to controvert the said Tribunal s observations. The Hon ble Supreme Court found no fault in Tribunal s order in setting aside the additional demand. 4.7 In the judgment of South India Television (P) Ltd. (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion. 4.8 As regard the entire reliance of the Revenue that the appellant has given a consent letter, we find that this Tribunal in the case of Andrew Telecommunications Pvt. Ltd. (supra) categorically held as under: 5. The assessing authority places reliance on the price of the base metal published in bulletin of the London Metal Exchange and the consent of the importer to adopt that as the base for re-determination. However, it cannot be lost sight of that the clearance was ordered to be held up on the basis of raw material prices in the said bulletin when the goods under import were manufactured products. The rationale for the comparatively low prices was claimed to lie in the supply contracts to which importers had drawn the attention of the assessing officer who, however, chose to disregard these. We find that the resort to prices of base met ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the importer before the final decision is taken. It is only in those cases where both the sides agree to resort to enhancement of value. That no orders are required to be passed. Merely because the importer has cleared the goods at enhanced value to save the demurrage charges or otherwise, by itself, does not mean that the importer is consenting to enhance the value. It is right of the importer to contest the enhancement and fact of clearance of goods, cannot preclude the importer from exercising the right of appeal. As such, we find no merit in the Revenue s appeal. 6. Inasmuch as the Commissioner (Appeals) has remanded the matter to the original adjudicating authority for deciding the assessable value of the imported goods, by following the principles of natural justice, we upheld the impugned order and direct the original adjudicating authority to do the needful. 7. Stay petition as also appeal gets disposed of in the above manner. 4.10 We find that both the lower authorities, they have not accepted that the prices are based on DGOV circular. However, the calculations shown by the Learned consultant, it is clear that the enhancement of the value is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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