9911796707
TMI Blog2024 (11) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... hdeva, Advs. for Intervenor. Mr. Harpreet Singh, SSC with Ms. Suhani Mathur, Mr. Jatin Kumar, Advs. CUSAA 26/2022 & CM APPL 22868/2022 (stay), CUSAA 27/2022 & CM APPL. 22870/2022 (stay), CUSAA 90/2022 & CM APPL. 34838/2022 (stay), CUSAA 91/2022 & CM APPL 34841/2022 (stay), CUSAA 92/2022 & CM APPL. 34911/2022 (stay), CUSAA 93/2022 & CM APPL. 34914/2022 (Interim Stay), CUSAA 94/2022 & CM APPL. 34917/2022 (Interim Stay), CUSAA 95/2022 & CM APPL. 34920/2022 (Interim Stay), CUSAA 96/2022 & CM APPL. 34923/2022 (Interim Stay), CUSAA 97/2022 & CM APPL. 34926/2022 (Interim Stay), CUSAA 98/2022 & CM APPL. 35014/2022 (Interim Stay), CUSAA 99/2022 & CM APPL. 35019/2022 (Interim Stay), CUSAA 100/2022 & CM APPL. 35028/2022 (Interim Stay), CUSAA 102/2022 & CM APPL. 35103/2022 (Interim Stay), CUSAA 103/2022 & CM APPL. 35108/2022 (Interim Stay), CUSAA 104/2022 & CM APPL. 35113/2022 (Interim Stay), CUSAA 105/2022 & CM APPL. 35679/2022 (Interim Stay), CUSAA 107/2022 & CM APPL. 35731/2022 (Interim Stay), CUSAA 108/2022 & CM APPL. 35734/2022 (Interim Stay), CUSAA 109/2022 & CM APPL. 35737/2022 (Interim Stay), CUSAA 110/2022 & CM APPL. 35897/2022 (Interim Stay), CUSAA 111/2022 & CM APPL. 35901/2022 (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be examined and pursuant to which learned counsels for respective sides had also addressed elaborate submissions on the said appeal. We thus, for the purposes of disposal of this batch, deem it appropriate to notice the facts as they obtain in the aforenoted two appeals. 3. The appellant in CUSAA 27/2022 had imported polyester knitted fabrics of different weights during the period November 2018 to April 2019. Those imports were affected on the basis of 27 Bills of Entry [BoE] which were submitted. The respondents appear to have disputed the 'declared value' of the imported goods on the basis of contemporaneous import data obtained from the National Import Database [NIDB]. It is the case of the appellant that since the clearance of the goods was being inordinately delayed, it was compelled to pay differential customs duty on the enhanced value as computed by the proper officer. It is further alleged that the appellant was compelled and coerced into voluntarily relinquishing its right to receive a speaking order as contemplated under Section 17 (5) of the Act. 4. Post the BoE being reassessed, the appellant preferred first appeals before the Commissioner of Customs (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitted Fabric. 4. 9990359 dated 08.02.2019 Lot of Polyester Knitted Fabric. 5. 9990360 dated 08.02.2019 Lot of Polyester Knitted Fabric. The containers are incurring detention and demurrage on daily basis. In this regard we would like to request you if your goodself is going to enhance the value of goods, we have no objection for that we are ready to pay custom duty on enhance value under protest. We request you to clear our consignments at the earliest to save us financial losses of detention and demurrage. Yours truly, For Manavi Exim Pvt Ltd Auth. Signatory xxxx xxxx xxxx Date: 15.02.2019 To, The Assistant Commissioner of Customs lCD Palwal, Village Janouli-Baghola, Haryana-121102. Subject: Customs Clearance of goods imported vide 2 Bill of Entry Dear Sir, We would like to inform you that we have filed the following bills of entry for customs clearance, but the same has not been yet assessed. S.# Bill of Entry No. & Date Item 1. 2054909 dated 14.02.2019 Lot of Non textured Polyester PA Coated Fabric. 2. 2054913 dated 14.02.2019 Lot of Non textured Polyester PA Coated Fabric. The containers are incurring detention and demurrage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demurrage on daily basis. In this regard we would like to request you if your goodself is going to enhance the value of goods, we have no objection for that we are ready to pay custom duty on enhance value under protest. If the assessment of goods are going to take time then we request you to clear our goods provisionally we are ready to submit PD Bond and Bank Guarantee for 30% of the differential customs duty. We request you to clear our consignments at the earliest to save us financial losses of detention and demurrage. Yours truly, For Manavi Exim Pvt Ltd Auth. Signatory xxxx xxxx xxxx Date: 20.02.2019 To The Assistant Commissioner of Customs lCD Palwal, Village Janouli-Baghola, Haryana-121102. Subject: Customs Clearance of goods imported vide 5 Bill of Entry Dear Sir, With reference to our letter dated 15-16.02.2019 for each Bill of Entry's. We would like to inform you that we have filed the following bills of entry for customs clearance, but the same has not been yet assessed. S.# Bill of Entry No. & Date Item 1. 2065083 dated 15.02.2019 Lot of Non Textured Polyester Fabric. 2. 2054913 dated 14.02.2019 Lot of Non Textured Polye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red value US$ 1.03 per kg. to US$1.94 per kg. on the basis of data of contemporaneous import of similar/identical goods in terms of Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962 and the duty payable is liable to be enhanced accordingly under Section 17 (5) of the Customs Act, 1962. Accordingly, as we are in agreement with the proposed enhancement of value/duty, we do not want any show cause notice or speaking order in the matter, as we have to fulfil the commitments to our customers therefore, You are requested to redetermine the value and re-assess the duty in accordance with the value/duty as proposed so that we can clear the goods asap to save us from the financial burden of detention and demurrages. Yours Sincerely For Manavi Exim Pvt. Ltd. Authorised Signatory" 10. After having obtained clearance on payment of additional customs duty on the enhanced value as determined, the appellant proceeded to file appeals contemplated by Section 129A of the Act. Those appeals when taken up for consideration by the first appellate authority came to be allowed with that authority observing that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is extracted hereinbelow: "23. In the present case, as noticed above, the proper officer doubted the truth or accuracy of the value declared by the importer for the reason that contemporaneous data had a significantly higher value. It was open to the importers to require the proper officer to intimate the grounds in writing for doubting the truth or accuracy of the value declared by them and seek a reasonable opportunity of being heard, but they did not do so. On the other hand, the importers submitted in writing that though they had declared the value of the imported goods at 1.20 USD per kg., but on being shown contemporaneous data, they have agreed that the value of the goods should be enhanced to 1.80 USD per kg for Hanuman Prasad and to 1.94 USD per kg. for Niraj Silk. The importers also specifically stated that they did not want to avail of the right conferred on them under section 124 of the Customs Act and, therefore, they did not want any show cause notice to be issued to them or personal hearing to be provided to them. The importers also specifically stated that they did not want a speaking order to be passed on the Bills of Entry. It needs to be noted that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue to establish the valuation any further as the consented value became the declared transaction value requiring no further investigation or justification. Paragraph 5 of the decision is reproduced below: "5. We have considered the contentions of both sides. We find that whatever may be the reasons, the appellant expressly gave its consent to the value proposed by Revenue and expressly stated that it did not want any Show Cause Notice or personal hearing. Even the duty was paid without protest. By consenting to enhancement of value and thereby voluntarily foregoing the need for a Show Cause Notice, the appellant made it unnecessary for Revenue to establish the valuation any further as the consented value in effect becomes the declared transaction value requiring no further investigation or justification. To allow the appellant to contest the consented value now is to put Revenue in an impossible situation as the goods are no longer available for inspection and Revenue rightly did not proceed to further collect and compile all the evidences/basis into a Show Cause Notice as doing so, in spite of the appellant having consented to the enhancement of value and requested for no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly." 14. The CESTAT has ultimately proceeded to record the following conclusions: "35. The following position emerges from the aforesaid decisions of the Tribunal: (i) When an importer consents to the enhancement of value, it becomes unnecessary for the revenue to establish the valuation as the consented value, in effect, becomes the declared transaction value requiring no further investigation; (ii) When an importer accepts the loaded value of the goods without any protest or objection, the importer cannot be permitted to deny its correctness; and (iii) The burden of the Department to establish the declared value to be in correct is discharged if the enhanced value is voluntarily accepted." 15. It appears that in the course of the prosecution of those appeals, the decisions of the Supreme Court in Eicher Tractors Ltd. vs. Commr. of Customs (2001) 1 SCC 315 as well as Century Metal Recyclin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of other factors and not on the acceptance by the importers. This casual observation is not based on the factual position that emerges from the records of the case." 17. The appeals in the case of Manavi Exim, the appellant in CUSAA 126/2022, also came to be allowed on identical reasoning. This is evident from the following observations appearing in the order of the CESTAT: "13. The Commissioner (Appeals), despite a categorical statement made by the importers that they did not desire a speaking order to be passed, observed "an obligation was cast on the assessing authority to pass a speaking order disclosing the grounds for rejecting the declared value and only then the assessing officer could have enhanced the value." This finding of the Commissioner (Appeals) is perverse as it is clearly contrary to the specific statement made by the importers in the letters submitted by them to the assessing officer. What has also to be kept in mind is that section 17 (5) of the Customs Act permits the importers to waive this right. 14. It is seen from a perusal of section 17 (4) of the Customs Act that the proper officer can re-assess the duty leviable, if it is found on verification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 (5) of the Customs Act, 1962 [the Act]. 2. Section 17 of the Act reads as follows: - "17. Assessment of duty (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods. (2) The proper officer may verify the entries made under section 46 or section 50 and the self-assessment of goods referred to in sub section (1) and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary: PROVIDED that the selection of cases lor verification shall primarily be on the basis of risk evaluation through appropriate selection criteria. (3) For the purposes of verification under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. (4) Where it is found on verification, examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9. (ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) the significantly higher value at which identical or similar goods impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after enquiry in consultation with the importers. Clause (i) to the Explanation states that Rule 12 does not provide a method of determination of value but provides the procedure or mechanism in cases where declared value can be rejected when there is a reasonable doubt that the declared transaction value does not represent the actual transaction value. In such cases the transaction value is to be sequentially determined in accordance with Rules 4 to 9 of the 2007 Rules. 15. Sub-rule (2) of Rule 12 stipulates that on request of an importer, the proper officer shall intimate to the importer in writing the grounds i.e. the reason for doubting the truth or accuracy of the value declared in relation to the imported goods. Further, the proper officer shall provide a reasonable opportunity of being heard to the importer before he makes the valuation in the form of final decision under sub-rule (1). 16. The requirements of Rule 12, therefore, can be summarised as under: 16.1. The proper officer should have reasonable doubt as to the transactional value on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while the concession submitted in terms of Section 17 (5) may deprive the importer of the right to question whether there was material which would constitute sufficient ground for the proper officer to harbor a "reason to believe" and doubt the transaction value, the same would not take away the right of the importer to question the final assessment itself. 9. We also bear in consideration the submission of the respondents who contend that the scheme of sub-sections (4) and (5) of Section 17 clearly suggests that a reassessment has already been undertaken and completed by the proper officer and which establishes the incorrectness of the self-declaration being a precursor to the importer submitting the concession. This flows from Section 17 (5) which commences with the phrase "Where any reassessment done...." and proceeds to speak of the importer "confirming his acceptance of the said re-assessment in writing". 10. On a preliminary examination of the scheme of Section 17 we are also of the view that while it may be open for an importer to proceed in terms of Section 17 (5), the same would not detract from the obligation of the proper officer to have formed the requisite belief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section: [(iv) the additional obligations of the importer in respect of any class of imported goods and the checks to be exercised, including the circumstances and manner of exercising thereof, as the Board may specify, where, the Board has reason to believe that the value of such goods may not be declared truthfully or accurately, having regard to the trend of declared value of such goods or any other relevant criteria:] PROVIDED also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill of export, as the case may be, is presented under Section 50. (2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be.] (2) The provisions of this section shall not apply to baggage and goods imported by post. (3) [* * *] 16. Date for determination of rate of duty and tariff valuation of export goods.- [(1) The rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force,- (a) in the case of goods entered for export under Section 50, on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51. (b) in the case of any other goods, on the date of payment of duty.] (2) The provisions of this section shall not apply to baggage and goods exported by post." 22. The principal provision with which we are concerned is Section 17 and which relates to 'assessment of duty'. Section 17 reads as follows: "17. Assessment of duty.- (1) An importer entering any imported goods under Section 46, or an exporter entering any export goods under Section 50, shall, save as otherwise provided in Section 85, self-assess the duty, if any, lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 46 [and Section 50],- (a) where the importer or exporter is unable to make self-assessment under sub-section (1) of Section 17 and makes a request in writing to the proper officer for assessment; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or (c) where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or (d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry, the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed or re-assessed as the case may be, and the duty provisionally assessed.] [(1-A) Where, pursuant to the provisional assessment under sub-section (1), if any document or information is required by the proper officer for final assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, paid on such duty on imports made by an individual for his personal use; (c) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (d) the export duty as specified in Section 26; (e) drawback of duty payable under Sections 74 and 75.]" 24. The 2007 Rules have been framed in order to give effect to the statutory mandate of Section 14. The words 'computed value', 'deductive value', 'similar goods' and 'transaction value' are defined by Rule 2 as under: "2. Definitions.- (1) In these rules, unless the context otherwise requires,- (a) "computed value" means the value of imported goods determined in accordance with Rule 8; (b) "deductive value" means the value determined in accordance with Rule 7; xxxx xxxx xxxx (f) "similar goods" means imported goods- (i) which although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods being valued having regard to the quality, reputation and the existence of trade ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; (iii) the computed value for identical goods or similar goods: PROVIDED that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of Rule 10 and cost incurred by the seller in sales in which he and the buyer are not related. (c) Substitute values shall not be established under the provisions of clause (b) of this sub-rule. (4) If the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through Rules 4 to 9." 26. Rules 4 and 5 prescribe the procedure for the determination of the transaction value of identical and similar goods. Those two rules read as under: "4. Transaction value of identical goods.- (1)(a) Subject to the provisions of Rule 3, the value of imported goods shall be the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of value where value cannot be determined under Rules 3, 4 and 5.- If the value of imported goods cannot be determined under the provisions of Rules 3, 4 and 5, the value shall be determined under the provisions of Rule 7 or, when the value cannot be determined under that rule, under Rule 8: PROVIDED that at the request of the importer, and with the approval of the proper officer, the order of application of Rules 7 and 8 shall be reversed. 7. Deductive value.- (1) Subject to the provisions of Rule 3, if the goods being valued or identical or similar imported goods are sold in India, in the condition as imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on the unit price at which the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deductions:- (i) either the commission usually paid or agreed to be paid or the additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind; (ii) the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no interest in the business of other and price is the sole consideration for the sale or offer for sale. (2) No value shall be determined under the provisions of this rule on the basis of- (i) the selling price in India of the goods produced in India; (ii) a system which provides for the acceptance for customs purposes of the highest of the two alternative values; (iii) the price of the goods on the domestic market of the country of exportation; (iv) the cost of production other than computed values which have been determined for identical or similar goods in accordance with the provisions of Rule 8; (v) the price of the goods for the export to a country other than India; (vi) minimum customs values; or (vii) arbitrary or fictitious values." 29. Rule 11 stipulates the declarations which an importer is liable to make and reads thus: "11. Declaration by the importer.- (1) The importer or his agent shall furnish- (a) a declaration disclosing full and accurate details relating to the value of imported goods; and (b) any other statement, information or document including an invoice of the manufacture or producer of the imported goods where the goods are imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declared value after the said inquiry in consultation with the importers. (iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include- (a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non-declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents." It is against the backdrop of the aforenoted statutory provisions that arguments were canvassed before us. III. THE SUBMISSIONS ADDRESSED 31. Leading submissions on behalf of the appellants, Mr. Gulati, learned senior counsel addressed the following submissions. It was at the outset submitted that the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment at a later stage. According to Mr. Gulati, the concession, even if assumed to have been made, could have neither deprived the importer of the right to assail the reassessment at a later stage nor could it have operated as estoppel or debarred it from pursuing a statutory remedy which the Act itself conferred. 35. The harassment faced by importers as a result of declared value being mechanically and invariably rejected, according to Mr. Gulati, was an aspect which had fallen for adverse comment of the Supreme Court itself in Century Metal Recycling. Mr. Gulati drew our attention to the following paragraphs of that judgment and which, according to him, lucidly enunciate the statutory position: "8. This Court in Sanjivani Non-Ferrous Trading (P) Ltd. [CCE v. Sanjivani Non-Ferrous Trading (P) Ltd., (2019) 2 SCC 378], while interpreting the provisions of Section 14 and Rules 3, 4 and 12 of the 2007 Rules, had held as under : (SCC p. 383, para 10) "10. The law, thus is clear. As per Sections 14 (1) and 14(1-A), the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision. Section 14 (1) is a deeming provision as it tal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instance, the proper officer must ask and call upon the importer to furnish further information including documents to justify the declared transactional value. The proper officer may thereafter accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on "certain reasons" raise doubts about the truth or accuracy of declared value. "Certain reasons" would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture or production, non-declaration of parameters such as brand and grade, etc. and fraudulent or manipulated documents. Grounds mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces in which a proper officer could initiate a valuation under the 2007 Rules, the Supreme Court in Century Metal Recycling rendered the following pertinent observations: "17. Proper officer can therefore reject the declared transactional value based on "certain reasons" to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of the Explanation appended to Rule 12 which sets out some of the conditions when the "reason to doubt" exists. The instances mentioned in sub-clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared. 18. The choice of words deployed in Rule 12 of the 2007 Rules are significant and of much consequence. The legislature, we must agree, has not used the expression "reason to believe" or "satisfaction" or such other positive terms as a precondition on the part of the proper officer. The expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses covered under clauses (a) to (d), the proper officer may direct provisional assessment of the duty leviable on the imported goods. Where duty is assessed provisionally, the importer or exporter has to furnish security as the proper officer deems fit for payment of deficiency, if any, between the duty provisionally paid and the duty finally assessed. 23. On interpreting Section 18 of the Act, it is held that when there is a dispute between the Customs Authorities and the importer as regards the valuation of the imported goods, on satisfaction of the conditions enumerated in sub-section (1), the Authorities should make provisional assessment of customs duty under Section 18 of the Act. This expedites clearance, pending final adjudication on merits which may take time. This is also the mandate of the Board Circular No. 38/2016 dated 22-8-2016. Any insistence and compulsion by the Authorities that the importer should disclaim and forego his statutory right under Section 18 of the Act would not be correct. Neither would it be right to reject the valuation as declared by the importer without reasonable doubt for certain reasons." 38. Mr. Gulati also drew our attention to the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the whims and fancies of the proper officer. 40. Mr. Gulati pointed out that the fact that the decision to initiate reassessment would have to be founded on justiciable grounds was an aspect which was also duly highlighted by the Supreme Court in Tata Chemicals Ltd. vs. Commr. of Customs (2015) 11 SCC 628 when it had observed: "14. In our opinion, the expression "deems it necessary" obviously means that the proper officer must have good reason to subject imported goods to a chemical or other tests. And, on the facts of the present case, it is clear that where the importer has furnished all the necessary documents to support the fact that the ash content in the coking coal imported is less than 12%, the proper officer must, when questioned, state that, at the very least, the documents produced do not inspire confidence for some good prima facie reason. In the present case, as has been noted above, the Revenue has never stated that Casco's certificate of quality ought to be rejected or is defective in any manner. This being the case, it is clear that the entire chemical analysis of the imported goods done by the Department was ultra vires Section 18(1)(b) of the Customs Act." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression "relevant date" has been defined in Clause (B) of the Explanation appended to subsection (1) of Section 11B to mean the date of payment of duty in cases other than those falling under Clauses (a), (b), (c), (d) and (e) of the said Explanation. It is submitted that Clauses (a) to (e) deal with certain specific situations whereas the one applicable in most cases is the date of payment. It is submitted that the appellate/revision proceedings, or for that matter proceedings in High Court/Supreme Court, take a number of years and by the time the claimant succeeds and asks for refund, his claim will be barred; it will be thrown out on the ground that it has not been filed within six months from the date of payment of duty. We think that the entire edifice of this argument is erected upon an incomplete reading of Section 11B. The second proviso to Section 11B (as amended in 1991) expressly provides that "the limitation of six months shall not apply where any duty has been paid under protest". Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is diffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of imported goods is to be determined under Section 14(1-A) in accordance with the Rules framed in this behalf. 7. The Rules which have been framed are the Customs, Valuation (Determination of Price of Imported Goods) Rules, 1988. The Rules came into force on 16-8-1988. Under Rule 3 (i) "the value of imported goods shall be the transaction value". "Transaction value" has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4 (1) in turn states: "4. (1) The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these Rules." 8. Reading Rule 3 (i) and Rule 4 (1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4 (2) namely: "4. (2)(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which- (i) are imposed or required by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in respect of the transaction envisages a situation where payment of price may be deferred. 13. That Rule 4 is limited to the transaction in question is also supported by the provisions of the other rules each of which provide for alternate modes of valuation and allow evidence of value of goods other than those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined 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 7-A. 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 availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in the invoice. The transaction value having been rejected, assessment of value was made on the basis of the price list of the foreign vendor. 19. Both the decisions, Padia Sales Corpn. [1993 Supp (4) SCC 57] and Sharp Business Machines (P) Ltd. [(1991) 1 SCC 154 : 1991 SCC (Cri) 114] were distinguished subsequently in Mirah Exports (P) Ltd. v. Collector of Customs [(1998) 3 SCC 292 : (1998) 98 ELT 3]. As the facts of this case are somewhat similar to the case before us, it is dealt with in some detail. 20. Mirah Exports Pvt. Ltd. along with other importers had imported bearings at high rates of discount. The declared value was rejected by the Customs Authorities on the basis of the price list of the vendors. This Court set aside the decision of the respondent Authorities accepting the argument that a discount is a recognised feature of international trade practice and that as long as those discounts are uniformly available to all and based on logical commercial bases, they cannot be denied under Section 14. It appears from the judgment that a distinction was drawn between a discounted price special to a particular customer and discounts available to all customers. 21. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 of the Act. For the sake of completeness, we propose to notice some of those decisions hereinafter. 44. In CMR Nikkei India (P) Ltd. vs. Commr. of Customs 2022 SCC OnLine CESTAT 2765, the Ahmedabad Bench of the CESTAT, while faced with a contention identical to that which was advanced by the respondents before us, had succinctly observed as follows: "8. Heard both sides and perused the records. We find that the dispute in the present case is regarding the valuation of the goods imported by the Appellant. The Assessing Authority re-assessed the imported goods at values higher than what was declared by the Appellant in the Bills of Entry for self-assessment. The Appellant accepted the enhanced value by submitting the consent letter. In spite of the acceptance before the Assessing Authority, the Appellant challenged the valuation/assessment of goods by filing appeals. The learned Commissioner (Appeals) upheld the impugned reassessment. The Commissioner (Appeals) has observed in the impugned orders that the Appellant had given their written acceptance of the enhanced value and thereby has forgone his right to speaking order under Section 17 (5) of the Customs Act. We noticed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before any enhancement of valuation." 45. The CESTAT in Commissioner of Central Excise vs. Hingora Industries Ltd. 2008 SCC OnLine CESTAT 1232 had proceeded to summarily dismiss the appeal of the customs authority rejecting the argument of the assessee being precluded from challenging the reassessment observing as follows: "S.S. Kang, Vice-President:- Heard both sides. Revenue filed this appeal against the impugned order passed by Commissioner (Appeals). The only contention of Revenue is that at the time of clearance of goods, the respondent accepted the loading of the value of the goods once the loading of the value of the goods is accepted by the respondent and duty has been paid without any protest they cannot challenge the assessment order hence setting aside the assessment order by Commissioner (Appeals) is not sustainable. 2. The contention of respondent is that to avoid demurrage charges, the respondent accepted the enhanced value and thereafter filed appeal. 3. Respondent relied upon the decision in the case of Laxmi Colour Lab v. Collector of Customs reported in 1992 62 E.L.T. 613 (Tribunal). 4. We find that in this case, value of the goods was enhanced by the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeal by Revenue. 7. Having considered the rival contentions, we find that assessing officer have been making enhancement in a routine manner and the respondent who are regular importers are left with no choice but to sign on the dotted line for taking delivery of their goods to carry on their business, and also save the demurrage charges if the consignment is delayed in the port for want of clearance. Relying on the precedent Final Order No. 63455-63456/2018 dated 25.10.2018 of this Tribunal and also in view of the Order-in-Appeal No. CC(A)/CUS/D-II/ICD/788-1083/2014 dated 31.12.2014 had been accepted in respondent own case, we uphold the impugned common order(s) in appeal. Accordingly, these appeals by Revenue are dismissed being without merit. The stay applications also stand disposed of accordingly." 47. A similar view was expressed by the Principal Bench of the CESTAT in ACC (Import), TKD vs. AAA Impex 2019 SCC OnLine CESTAT 2523. This emerges from the following paragraphs of that decision: "12. Perusal of the records of the case indicates that the only reason cited reason for re-assessment of value is that the respondent has accepted the enhanced value. No doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex vs. Commr.17 By a detailed judgment rendered by the CESTAT in this matter and on a consideration of the relevant provisions of the Act as well as the 2007 Rules, the following pertinent observations were rendered: "11. Proper officer can therefore reject the declared transactional value based on 'certain reasons to doubt the truth or accuracy' of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of Explanation appended to Rule 12 which sets out above-mentioned conditions when the 'reason to doubt' exists. These instances are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared. The expression "reason to doubt" cannot be equated with the requirements of positive reasons to believe, for the word 'doubt' refers to un-certainty and irresolution reflecting suspicion and apprehension. However, this doubt must be reasonable i.e. have a degree of objectivity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w shops in the wholesale market were visited and the samples which was drawn at the time of examination of impugned imported goods were shown to the different vendors. The original Adjudicating Authority in its order has observed that the imported goods were observed to be of cheaper quality and many of the shop keepers expressed to not to have similar items with them. It is only one shop keeper who has similar items, as were imported vide the impugned Bill of Entry. But there is no evidence brought on record by the department that the said shop keeper also had imported the goods. These observations of the Adjudicating Authority are sufficient for us to hold that the Department has not followed the statutory procedure nor has produced the cogent evidence while confirming the allegations of under valuation and while confirming the differential duty. 21. It appears that the sole ground for the confirmation is the admission of the authorized representative of the appellant in his statement dated 20.01.2017. The said statement is perused vide which the said authorized representative has accepted the reassessed value and offered to pay differential duty along with the applicable fine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sufficient to confirm the allegations of under valuation. The burden was still on the Department to prove the allegations levelled. The said burden has not been discharged." 49. The last of the decisions which toed a similar line and which would merit being noticed is yet another judgment handed down by the Ahmedabad Bench of the CESTAT in Kunj Bihari Textiles vs. C.C. 2023 SCC OnLine CESTAT 246. The CESTAT on this occasion took note of the salient principles which had come to be identified in an earlier decision in M/s Sedna Impex India (P) Ltd. vs. C.C.-Mundra Final Order No. A/10397-10407 / 2023 dated 06 March 2023 and held: "2. The issue in the instant case pertains to import of mix lot of Polyester Knitted Fabrics. The revenue had sought to revise the assessable value by rejecting the declared assessable value. It is noticed that identical issue has been decided by Tribunal in the case of Sedna Impex India P. Ltd. -2023 (3) TMI 1080 (CESTAT-Ahmd), wherein Tribunal has observed as follows: "4.3 The dispute in the present case is regarding the valuation of the goods imported by the Appellants. The Assessing Authority re-assessed the imported goods at values higher than wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. Commissioner of Customs, Goa [(2006) 202 ELT 530 (Tri.-Mum.)] has held in the absence of rejection of transaction value, invoice value requires acceptance and when the contemporaneous import of similar goods is not established, value cannot be enhanced. In the case of Commissioner of Customs v. Modern Overseas [(2005) 184 ELT 65 (Tri.-Del.)] NIDB data was held to be insufficient, in the absence of clarity about various parameters. List of such decisions is unending and it is sufficient to say that NIDB data has been held to be insufficient for enhancement of value, in the absence of any other independent evidence. Admittedly in the present cases, there is no such evidence produced by the Revenue except reference to the NIDB data. In view of the discussions above, we hold that in the present case, the enhancement of value on the basis of NIDB data cannot be accepted." 50. The view taken by the CESTAT in the judgments impugned before us in this set of appeals, however, principally proceeds on the basis of its decisions in Advanced Scan Support and Vikas Spinners. In Advanced Scan Support, the CESTAT had taken note of the contention of the importer that there was no misdeclarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under : "7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per kg. but the same was not accepted and loaded to US $ 0.50 per kg. This loading in the value was done in consultation with Shri Gautam Sinha, the representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the bill of entry dated May 7, 1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008 on May 19, 1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally estopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f valuation rather than a case warranting confiscation and/or penalty. As has been held by the Supreme Court in the case of Handtex v. Commissioner of Customs every change made by the assessing officer during the course of assessment whether relating to rate of duty or value need not lead to an inference of misdeclaration by the importer. 8. It is also pertinent to note that the appellant never consented for confiscation and penalty and did not forego its right for a show-cause notice/personal hearing with regard thereto. Therefore, confiscation and penalty have to be held to have been ordered in violation of the principles of natural justice and for that reason also they cannot be sustained." 51. Since the CESTAT in Advanced Scan Support has essentially followed the reasoning on which Vikas Spinners was based, this would constitute an appropriate juncture to examine that decision in some detail. It becomes pertinent to note that the importer in Vikas Spinners had, apart from questioning the valuation of the goods, also assailed the confiscation action and the imposition of penalties. Insofar as the issues pertaining to confiscation are concerned, the same came to be answered on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they accepted the loaded value only for the purpose of clearance of the goods and reserved their right to challenge the same at a subsequent stage. The payment of duty was not made by them under protest on the loaded value of the goods. Their own Attorney/Representative agreed to the loaded value of the goods and signed the affirmation on the back of the Bill of Entry even and that is why no show cause notice in this regard was issued to them. The show cause notice in the instant case was issued to them only for the confiscation of the goods and imposition of penalty on them due to misdeclaration of nature of goods and import of the same without specific licence." 52. Vikas Spinners was thus a case where the BoE as submitted by the importer had itself acknowledged the loading suggested by the customs authorities over and above the value of the importer goods as declared. It was this BoE which ultimately came to be accepted and formed the primary basis of the import itself. This becomes apparent from the CESTAT having categorically found that "There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken the view that the declared import values cannot be relied upon since they are based on invoices issued by traders and not at the manufacturers of such scrap. Based on this premise, the declared import values have been rejected and enhanced to higher level on the basis of purported contemporary import values found in the NIDB data. This enhancement is the bone of contention in all these appeals. 6.3) MS Steel (turning shredded scrap) is generated in the course of manufacture of finished goods eg; machinery. Appellants, right from the beginning, have been crying hoarse that such scrap is disposed of by concerned manufacturers to traders and that they have to necessarily buy such scrap only from the traders at the prevalent market rate. This assertion has not been disproved or proved incorrect by Customs. 6.4) Department has also not backed up their allegations that the manner of purchase of the impugned goods from the traders and not from manufacturers, is not as per practice normally followed in the course of international trade in the said item. This being the case, we are of the opinion that Department cannot reject the invoices issued by traders the declared import valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal for holding any enhancement in assessment value, the transaction value to be first rejected based on legal permissible ground as indicated in the valuation Rules. He has also referred to Hon'ble Supreme Court decision in the case of Eicher Tractors Ltd. v. CC, 2000 (122) ELT 321 (S.C) in support of his finding that transaction value cannot be rejected without clear and cogent evidence produce by the department with regard to quality, import of origin and place and time of import. We find that in their memo of appeal, Revenue has not advance any such evidences to support their case, inasmuch as, no evidence of rejection of transaction value stands produced by the authority, we find no reason to interfere with the impugned order of Commissioner (Appeals). Mere reference to Commissioner Mumbai guidelines to enhance the value of ball bearings, without first assessing the quality of the goods is not justified. It stands accepted that the ball bearings were mix and not of uniform sizes. As such, Revenue's appeal has no merits". 6.8) In the case of Topsia Estates Pvt. Ltd. v. CC (Import-Seaport) Chennai as reported at [2015 (330) E.L.T 799 (Tri.-Chennai)], the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction. We find in the present case due examination about this crucial aspect has not been done by the assessing officer and comparison based on the contemporaneous import is not proper. Further, the contractual arrangements and invoices should not be rejected in the absence of any evidence to question their authenticity. As submitted by the appellants, NIBD data is a guidelines and an indicator for the assessing officer and it cannot be a substitute for assessable value. The assessable value for imported items has to be invariably arrived at applying Section 14 read with Customs Valuation Rules, 2007. 7. We also note that the reliance placed by the appellant on the decision of the Tribunal in the case of Topsia Estates Pvt. Ltd. v. CC, Chennai, 2015 (330) ELT 799 (Tribunal-Chennai) is appropriate to the facts of the present case. The observation of the Tribunal is as below:- "We find that in the present case, the adjudicating authority enhanced the value as the declared value appears to be very low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 metal to reject the declared price of manufactured goods, particularly, in the light of an explanation offered and not disputed is not in accordance with Section 14 of Customs Act, 1962. Consent at gun-point is no consent and consent of any sort cannot condone deviation from the law. 4.9 This issue was also decided by a principal bench of this Tribunal at Delhi in the case of Ankit Electronics wherein the following order was passed: Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal. We propose to dispose of the stay petition as also appeal by a common order as a short issue is involved. 2. As per facts on record, the respondents filed thirteen Bills of Entry on various dates for the clearance of Ferrite magnet & Ferrite magnet rings declaring the value based upon the invoices raised by the supplier. The assessing authority did not agree with the declared value and enhanced the same. The B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 on the basis of contemporaneous imports data but clearly on the basis of DGOV circular. This Tribunal dealing with identical case in the case of Bharathi Rubber Lining & Allied Services P. Ltd. clearly held that DGOV circular cannot override the provisions of Valuation Rules. Invoice price is not sacrosanct but before rejecting the invoice price the department has to give cogent reasons for such rejection. Assessing Authority has to examine each and every case on merit for deciding its validity. He could not form the view to reject all transaction only on the basis of same general criteria based on DGOV circular. It was, however, held that if contemporaneous import were not noticed, Rules 5 and 6 of Customs Valuation Rules, 1988 could not be applied, the question of rejecting the transaction valued under the Rule 10(A) does not arise at all. 4.11 In the case of Modern Manufacturers (supra) this Tribunal dealing with identical issue held that enhancement of value of imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images. (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/ Special Attorney and paid the duty thereon according." * Reliance was also placed on the decision of Tribunal in the case of M/s. Gandian Plasticote Ltd.- 2008 (223) ELT 605 (tri.-Kol.) wherein following has been observed: "The learned Advocate also cited the decision of the Tribunal in the case of M/s Vikas Spinners V. CC., Lucknow 2001 (128) ELT. 143 (Tri-Del) in support of his arguments. We find that the said decision clearly holds that enhanced value once settled and duty having been paid accordingly without protest, importer is stopped from challenging the same subsequently. It also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power of reappraisal 58. Before we proceed to analyse Section 17 of the Act and its application to the appeals before us, it would be pertinent to preface the discussion by acknowledging the statutory position as it exists. An entity intending to import goods is firstly required to self-assess the duty which would be leviable. This obliges the importer to comply with the prescriptions set out in Section 46 of the Act. As that provision stands in its present avatar, the importer of any goods is required to electronically present on the customs automated system, the BoE for the consideration of the proper officer. The BoE is to include all particulars required in terms of the provisions made in the Act and corresponding rules. In addition to the presentation of a BoE, the importer is also statutorily obliged to submit a declaration as to the truthfulness of the contents of such BoE and in support thereof produce before the proper officer the invoice and other documents relating to the imported goods as may be prescribed. In terms of sub-section (4A) of Section 46, the importer who presents a BoE is to ensure that the said document is accurate and complete in respect of the informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porter, exporter or any other person to produce any contract, broker's note or any other document as specified in the proviso and to furnish any required information. Notwithstanding that the statements made in the bill of entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it was found subsequently on examination or testing of the goods or otherwise that any statement in such bill of entry or document or any information so furnished was not true, he could have proceeded to reassess the duty. Where the assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of the goods, classification, exemption or concession, speaking order shall be passed within 15 days from the date of assessment of the bill of entry or the shipping bill as the case may be as provided in Section 17 (5). 33. Under the provisions of Section 17 as amended by the Finance Act of 2011, Section 17 (1) has provided to self-assess the duty, if any, leviable on such goods by importer or exporter, as the case may be. Self-assessment is an assessment as per the amended definition of Section 2 (2). It is fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts [Escorts Ltd. v. Union of India, 1994 Supp (3) SCC 86]. 44. The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, reassessment is not permitted nor conditions of exemption can be adjudicated. Reassessment is permitted only under Sections 17 (3), (4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent may not have been undertaken or a speaking order not passed. Sub-section (6), however, came to be deleted by Finance Act, 2018 and which also introduced a power of audit independently and which now stands encompassed in Section 99A of the Act. Of critical significance are sub-sections (4) and (5) of Section 17 and which we propose to notice hereinafter. 63. As we read sub-section (4), it is manifest that before the proper officer commences the process of reassessment, it must come to form an opinion that basis the verification, examination or testing of goods mentioned in the self-assessed declarations as submitted by the importer, are incorrect. It is only on the formation of that opinion that it proceeds to reassess the duty leviable on the imported goods. It is thus evident that before the procedure as contemplated under sub-section (5) is undergone, the proper officer would have come to form a prima facie opinion that the self-assessed declaration is incorrect. It is this preliminary formation of opinion that forms the basis for the process of reassessment being commenced. The reasons for reassessment as well as the opinion formed under sub-section (4) thus constitutes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s light on the contingencies and situations in which the proper officer would be justified in rejecting the value of imported articles as declared. It provides in unequivocal terms that an exercise of reassessment would be predicated upon the proper officer having reasonable doubt as to the truthfulness or accuracy of the value as declared in relation to the imported goods. The sine qua non for commencement of reassessment, therefore, is the existence of reasonable doubt as to the declaration as made by the importer. What we seek to emphasise is that it is the formation of this opinion that forms the bedrock for the proper officer treading down the path constructed by Section 17 (4) of the Act. 67. In terms of Rule 12, upon the proper officer having formed a reasonable doubt with respect to the truthfulness and accuracy of the declarations made, it would call upon the importer to furnish such further information, documentation and evidence in support of the declaration as made. It is only if, after receipt of such information, the proper officer still harbours a reasonable doubt about the truthfulness or accuracy of the value declarations made that it would come to hold that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bly doubt and form the opinion that the value as declared does not represent the accurate transaction value. 70. The proper officer is further cautioned by virtue of clause (ii) of the Explanation when it provides that the declared value shall be accepted and a final decision in respect of assessment taken only after the completion of an inquiry undertaken by the proper officer in consultation with the importer. Clause (iii) thereafter spells out the factors which would be pertinent and germane for the customs authority raising a doubt with respect to the truthfulness and accuracy of the declarations made. Those factors are the following: "(a) the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed; (b) the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price; (c) the sale involves special discounts limited to exclusive agents; (d) the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production; (e) the non declaration of parameters such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is at this stage that the importer is entitled to call upon the proper officer to provide the grounds for doubting the declared value in writing so as to enable it to respond. The obligation to supply the reasons and to provide a reasonable opportunity of representation to the importer is clearly mandatory in light of the language employed by Rule 12 (2) and which uses the phrase "...before taking a final decision under sub-rule (1)". If the doubt persists even after consideration of the response as submitted by the importer or where it fails to respond to the notice issued, the proper officer would proceed to record its decision that the value of the goods cannot be determined in accordance with Rule 3 (1). This constitutes the second tier of the adjudicatory process. Thus, it is evident that it is only after the response of the importer has been considered and the proper officer finds no justification to deviate from the initial opinion which was formed that the process of determination of the true transactional value would commence. This is in light of Rule 12(1) providing that if the proper officer "still has reasonable doubt about the truth or accuracy of the value so declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rules 4 to 9.The interplay between Sections 14 and 17, and the 2007 Rules was lucidly explained by the Supreme Court in Century Metal Recycling and where the Supreme Court was faced with a somewhat similar situation of an appellant who alleged that they had been coerced and intimidated into submitting a letter of consent conceding to the assessment and valuation exercise undertaken by the customs authorities compelled by the delay being caused in the clearance of imported articles and the continued levy of demurrage, warehousing charges and other liabilities. After noticing the language in which Rule 12 stood couched, the Supreme Court in Century Metal Recycling observed that while the expression "reason to doubt" may not be akin to a "reason to believe" or a subjective satisfaction being arrived at, it would clearly have to be reasonable and thus the doubt formed would have to be informed by a degree of objectivity. 76. The Supreme Court held that reasonable doubt on the basis of the factors enumerated in the Explanation to Rule 12 (2) and sub-clauses (a) to (f) thereof, though not exhaustive, would shed light on the factors which the statute considers to be pertinent for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the declared transactional value. The proper officer may thereafter accept the transactional value as declared. However, where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared, it is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on "certain reasons" raise doubts about the truth or accuracy of declared value. "Certain reasons" would include conditions specified in clauses (a) to (f) i.e. higher value of identical similar goods of comparable quantities in a comparable transaction, abnormal discount or abnormal deduction from ordinary competitive prices, sales involving the special prices, misdeclaration on parameters such as description, quality, quantity, country of origin, year of manufacture or production, non-declaration of parameters such as brand and grade, etc. and fraudulent or manipulated documents. Grounds mentioned in (a) to (f) however are not exhaustive of "certain reasons" to raise doubt about the truth or accuracy of the declared valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has to record reasons in writing which have to be communicated when requested. 16.8. The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules. 17. Proper officer can therefore reject the declared transactional value based on "certain reasons" to doubt the truth or accuracy of the declared value in which event the proper officer is entitled to make assessment as per Rules 4 to 9 of the 2007 Rules. What is meant by the expression "grounds for doubting the truth or accuracy of the value declared" has been explained and elucidated in clause (iii) of the Explanation appended to Rule 12 which sets out some of the conditions when the "reason to doubt" exists. The instances mentioned in sub-clauses (a) to (f) are not exhaustive but are inclusive for there could be other instances when the proper officer could reasonably doubt the accuracy or truth of the value declared. 18. The choice of words deployed in Rule 12 of the 2007 Rules are significant and of much consequence. The legislature, we must agree, has not used the expression "reason to believe" or "satisfaction" or suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the 2007 Rules. It refers to a doubt which the proper officer possesses even after the importer has been asked to furnish further information including documents and evidence during the preliminary enquiry to clear his doubt about the truth and accuracy of the value declared. Therefore, there has to be a preliminary enquiry by the proper officer in which the importer must be given an opportunity for clarification of the doubts of the officer by furnishing of documents and evidence as to the accuracy or truth of the value declared. It is only in case where the doubt of the proper officer persists after conducting examination of information including documents or on account of non-furnishing of information that the procedure for further investigation and determination of value in terms of Rules 4 to 9 would come into operation and would be applicable. Reasonable doubt will exist if the doubt is reasonable and for "certain reasons" and not fanciful and absurd. A doubt to justify detailed enquiry under the proviso to Section 14 read with Rule 12 should not be based on initial apprehension, be imaginary or a mere perception not founded on reasonable and "certain" material. It shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords that the imported goods being aluminium scrap was not a homogeneous commodity and therefore, cannot be evaluated on the basis of the samples or lab testing. Further, the order holds that it was very difficult to find any identical/similar goods imported in India having same chemical and physical composition and that the values of aluminium 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 Sanjivani Non-Ferrous Trading (P) Ltd. [CCE v. Sanjivani Non-Ferrous Trading (P) Ltd., (2019) 2 SCC 378] 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 positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following words. Although the procedure for verification and ascertainment of the correctness of the declared value has been lucidly explained by the Supreme Court in Century Metal Recycling, we would for purposes of clarity break down that process in order to highlight the sequential steps which are contemplated thereunder. Undisputedly, Section 17 (2) empowers the proper officer to verify the entries made in the self-assessed declarations. For the purposes of undertaking that verification exercise, the proper officer by virtue of sub-section (3) of Section 17 stands statutorily enabled to require the importer or any other person to produce documents and information so as to ascertain the correctness of the declarations made. It is only after the completion of that verification process and when the proper officer comes to conclude that the self-assessment has not been done correctly that it would proceed to reassess the duty leviable on the imported goods. This clearly flows from a perusal of Section 17 (4) of the Act. 80. The provisions contained in Rule 12(1) are in essence an amalgam of the procedure prescribed and stipulated in sub-sections (3) and (4) of Section 17. Rule 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made. When we examine this aspect on the anvil of Section 17 (5), it becomes apparent that the statute speaks of the concession being with reference to the reassessment made under Section 17 (4). It thus proceeds to provide that in a case where the importer confirms his acceptance of the reassessment in writing, the proper officer would stand relieved of the obligation of passing a speaking order in respect of such reassessment. In all other cases and where the reassessment is not acceded to, the proper officer is obliged to pass a speaking order. Thus, the waiver or concession is at best confined to the speaking order which the proper officer is obliged to frame in affirmation of the provisional opinion that it may have formed under Section 17 (4). 84. We find ourselves unable to construe Rule 12 (2) as contemplating any concession or waiver at least in explicit terms. All that Rule 12 (2) stipulates is that the proper officer would intimate to the importer the grounds for doubting the declared value at its request. It is in the aforesaid context that we would thus have to adjudge whether the CESTAT was correct in holding that the exchange of communications amounted to a waive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . North Vancouver Land & Improvement Co. [Jones v. North Vancouver Land & Improvement Co., 1910 AC 317 (PC)] A perusal of the relevant facts set out in the several reports and the respective judgments in the above cases will clearly indicate that apart from the fact that some of them related to collieries which were treated on a special footing, those cases were really cases relating to waiver or acquiescence or estoppel. Indeed in Clarke case [Clarke & Chapman v. Hart, (1858) 6 HL Cas 633 : 10 ER 1443] while Lord Chelmsford referred to the decision in Prendergast case [Prendergast v. Turton, (1841) 1 Y & C Ch Cas 98 : 62 ER 807] as a case of abandonment of right, Lord Wensleydale read it as an instance of acquiescence and estoppel. Unilateral act or conduct of a person, that is to say act or conduct of one person which is not relied upon by another person to his detriment, is nothing more than mere waiver, acquiescence or laches, while act or conduct of a person amounting to an abandonment of his right and inducing another person to change his position to his detriment certainly raises the bar of estoppel. Therefore, it is not intelligible how, having held that no plea of waiver, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that Prendergast v. Turton [Prendergast v. Turton, (1841) 1 Y & C Ch Cas 98 : 62 ER 807] was decided." 13. Two things are thus clear, namely, (1) that abandonment of right is much more than mere waiver, acquiescence or laches and is something akin to estoppel if not estoppel itself; and (2) that mere waiver, acquiescence or laches which is short of abandonment of right or estoppel does not disentitle the holder of shares who has a vested interest in the shares from challenging the validity of the purported forfeiture of those shares. In view of the decision of the courts below that no case of waiver, acquiescence, laches or estoppel has been established in this case it is impossible to hold that the principles deducible from the judicial decisions relied upon by the appeal court have disentitled the Company to relief in this case. The matter does not rest even here. Assuming, but not conceding, that the principle of piercing the veil of corporate personality referred to in Smith, Stone & Knight Ltd. v. Birmingham Corpn. [Smith, Stone & Knight Ltd. v. Birmingham Corpn., (1939) 4 All ER 116 (KB)] can at all be applied to the facts of the present case so as to enable the Court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in Clarke case [Clarke & Chapman v. Hart, (1858) 6 HL Cas 633 : 10 ER 1443] relied upon by the appeal court. The only other conduct of Sundara Ayyar relied on by the learned advocate for the Mills in support of the appeal court's decision on this point is that Sundara Ayyar proceeded with his suit against Palaniappa Chettiar even after his suit as well as his appeal had been dismissed as against the Mills. In that suit Sundara Ayyar sued the Mills as well as Govindaraju Chettiar and the Official Receiver of Salem representing the latter's estate and Palaniappa Chettiar. In the plaint itself the validity of the forfeiture was challenged. The claim against Palaniappa Chettiar was in the alternative and it was founded on the agreement of 30-6-1939. The suit was dismissed as against the Mills only on the technical ground that Sundara Ayyar had no locus standi to maintain the suit. The contention of the Company that the forfeiture was invalid and the claim for rectification of the share register of the Mills by restoring the name of the Company cannot possibly have been affected by this decision. Sundara Ayyar's claim against Palaniappa Chettiar was based on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he landlord's interest to keep the tenancy alive; and so also in the case of shares of a company. It may be to the interests of the company and the general body of shareholders to refrain from forfeiture if, for example, the value of unpaid calls exceeds the market value of the shares. Such a position was envisaged in Garden Gully United Quartz Mining Co. v. McLister [Garden Gully United Quartz Mining Co. v. McLister, (1875) 1 AC 39 at p. 57 (PC)]. So also with waiver. A long catena of illustrative cases will be found collected in B.B. Mitra's Indian Limitation Act, 13th Edn., pp. 447 and 448." 89. The question of abandonment arose for consideration again before a Constitution Bench of the Supreme Court in Bhau Ram vs. Baij Nath Singh 1961 SCC OnLine SC 292. The issue itself arose in light of the stand of the respondents that the appellants upon withdrawing the pre-emption price would be deemed to have accepted the decree and thus being deprived of the right to assail or question the same. While answering that question, the Supreme Court pertinently observed as follows: "4. The view taken in the other cases proceeds on similar reasoning. But what has to be noted is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bided by or taken advantage of something done by the opponent under the decree and there is no justification for extending the rule in Tinkler case [154 English Reports, 1176 : 4 Exch 187] to cases like the present. In our judgment it must be limited only to those cases where a person has elected to take a benefit otherwise than on the merits of the claim in the lis under an order to which benefit he could not have been entitled except for the order. Here the appellant, by withdrawing the pre-emption price has not taken a benefit de hors the merits. Besides, this is not a case where restitution is impossible or inequitable. Further, it seems to us that the existence of a choice between two rights is also one of the conditions necessary for the applicability of the doctrine of approbate and reprobate. In the case before us there was no such choice before the appellant, and, therefore, his act in withdrawing the pre-emption price cannot preclude him for continuing his appeal. We, therefore, overrule the preliminary objection. The appeal will now be set down for hearing on merits. The costs of this hearing will be costs in the appeal." 90. In M. Ramnarain (P) Ltd. vs. State Trading C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case the defendant-appellant has elected to exercise one of two alternative remedies and by virtue of such election he has deprived himself from exercising the other right, as the defendant-appellant has both the remedies open to him and no question of election on his part arises. Mr Nariman submits that in the facts and circumstances of this case it cannot legitimately be held that the appellant waived his statutory right to file an appeal against the decree and otherwise became estopped from exercising his right. In this connection Mr Nariman has referred to Halsbury's Laws of England, 4th Edn., Vol. 16, paras 1471, 1472, 1473 and 1474 at pp. 992 to 996 which read as follows: "1471. Waiver.-Waiver is the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct. It may sometimes resemble a form of election, and sometimes be based on ordinary principles of estoppel, although, unlike estoppel, waiver must always be an intentional act with knowledge. A person who is entitled to rely on a stipulation, existing for his be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be final. 1472. Knowledge of rights essential.- For a release or waiver to be effectual it is essential that the person granting it should be fully informed as to his rights. Similarly, a confirmation of an invalid transaction is inoperative unless the person confirming knows of its invalidity. 1473. Estoppel and acquiescence.- The term 'acquiescence' is used where a person refrains from seeking redress when there is brought to his notice a violation of his rights of which he did not know at the time, and in that sense acquiescence is an element in laches. Subject to this, a person whose rights have been infringed without any knowledge or assent on his part has vested in him a right or action which, as a general rule, cannot be delivered without accord and satisfaction or release under seal. The term, is, however, properly used where a person having a right, and seeing another person about to commit it in the course of committing an act infringing upon the right, stands by in such a manner as really to induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to its being committed, a person so standing by cannot afterwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for postponement of payment of any money decree that may be passed and also for payment of the amount in instalments. The filing of an affidavit on the conclusion of hearing and before pronouncement of judgment cannot in the facts and circumstances of this case be considered to amount to such conduct on the part of the defendant-appellant as to disentitle him to file an appeal against any decree that may ultimately be passed against him. In view of the provisions contained in Order 20 Rule 11 (1) of the Code, the prayer for instalment has necessarily to be made before the pronouncement of the judgment and the passing of a decree, as the court after the passing of the decree can grant instalments only with the consent of the decree-holder in terms of the provisions contained in Order 20 Rule 11 (2) of the Code. Till the very last stage of the hearing of the suit the defendant-appellant had seriously contested the claim of the plaintiff-respondent and had in fact pressed for a counter-claim against the plaintiff-respondent. Before the delivery of judgment the defendant-appellant could not possibly have known with any amount of certainty whether any decree against the defendant-app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the provision regarding instalments was incompetent and the filing of an incompetent appeal or the withdrawal of the same does not entail any legal consequences, prejudicing the right of the defendant-appellant to file a proper appeal against the decree. The question which still remains to be considered is whether the act of filing an appeal against the order regarding instalments and not filing an appeal against the decree, when it was open to the defendant-appellant to do so, can be regarded to constitute such conduct on the part of the defendant-appellant as to disentitle him to maintain the present appeal. The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant-appellant. An appeal which is not competent is necessarily bound to fail, and in such a case the proper course for an appellant would be to file a valid and competent appeal. The filing of an incompetent appeal and the withdrawal of the same do not prejudice the right to file a proper appeal and cannot be held to constitute such conduct on the part of an appellant as to deprive him of his right to file a valid appeal. The fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any prejudice to the plaintiff-respondent. The promptitude with which the present appeal was filed just after a week on January 29, 1981 indicates that the defendant-appellant had never intended to give up their right of appeal against the decree and they have acted with all promptness and earnestness on being properly advised as to the legal position and as to their legal rights. The filing of the earlier Appeal No. 36 of 1981 in the facts and circumstances of this case does not amount to any representation or promise on the part of the defendant-appellant to accept the decree on merits and not to prefer an appeal from the same. There is also no question of election on the part of the defendant-appellant in preferring an appeal against the order regarding the instalment and not against the decree on merits. It is not a case where a party is called upon to elect one of two alternative remedies, when by election of one of two alternative remedies he loses his right to pursue the other. In the instant case, the defendant-appellant has a statutory right to prefer an appeal against the decree and any question of election on his part does not arise." 92. As was explained in Halsbury ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken. These facts and circumstances clearly detract from the argument of a conscious abandonment of the right to question the reassessment or to accept the re-evaluation exercise undertaken without reservation of a right to challenge. C. Rejection of declared values: Assessing its validity 96. On an overall conspectus of the facts of the present case viewed alongside the material which has been placed for our consideration, we find that there was an abject failure on the part of the proper officer to disclose or communicate the reasons on the basis of which a reasonable doubt came to be raised with respect to declared value. We were informed that the formation of reasonable doubt was based on the contemporaneous import data with which the importer was confronted. However, and before us, it was conceded that the contemporaneous data which is spoken of was merely the data as appearing on the NIDB portal. We had an occasion to notice the host of precedents which had consistently held that the NIDB data could not on a standalone basis constitute a valid ground to doubt the declared value. Suffice it to note that the entire action ultimately rested on the letters submitted by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent to form the opinion that the declared value was not liable to be accepted. 99. Significantly in Commissioner of Customs vs. South India Television (P) Ltd. (2007) 6 SCC 373, the Supreme Court had underscored the fact that the burden of proving incorrect valuation lies on the Department. It held that before rejecting the transaction value declared in an invoice, the Department must provide cogent reasons and evidence. This includes identifying imports of identical or similar goods at higher prices around the same time. The Court emphasized that an invoice serves as evidence of the transaction value and mere suspicion or allegations of undervaluation are insufficient for rejection. The Department must, it held, conduct detailed inquiries, gather material evidence, or present information on comparable imports to substantiate its claim. If relying on declarations from the exporting country, the Department must explain how such declarations were obtained and establish their probative value, even in adjudication proceedings where strict rules of evidence do not apply. The Supreme Court further clarified that once the Department provides evidence of contemporaneous imports at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement on the basis of NIDB data 100. Insofar as the aspect of whether the enhancement or re-evaluation of the 'declared value' can be based solely on the data available in the NIDB, in Agarwal Foundries, the Hyderabad Bench of the CESTAT had held that the customs authorities would be unjustified in enhancing the declared import values solely on the basis of NIDB data. It emphasized that transaction values cannot be rejected arbitrarily and that the authenticity of importer-issued invoices must be accepted unless discredited on the basis of cogent evidence. The CESTAT observed: "6.2) In all these cases, the imported goods are MS Steel (turning shredded scrap). The Customs Department has taken the view that the declared import values cannot be relied upon since they are based on invoices issued by traders and not at the manufacturers of such scrap. Based on this premise, the declared import values have been rejected and enhanced to higher level on the basis of purported contemporary import values found in the NIDB data. This enhancement is the bone of contention in all these appeals. 6.3) MS Steel (turning shredded scrap) is generated in the course of manufacture of fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational as reported at [2013 (289) ELT 305 (Tri.-Del.)] has laid down the following ratio: "7. We find that there is no dispute that the customs has power to reject the transaction value and enhance the assessable value in terms of Customs Valuation Rules. However, such rejection of transaction value and enhancement of assessable value has to be on the basis of some evidences on record. Contemporaneous imports have to be considered in reference to quality, quantity and country of origin with the imports under consideration. It has been held in a number of decisions that NIDB data cannot be made the basis for enhancement of value. Commissioner (Appeals) has relied upon various decisions of the Tribunal for holding any enhancement in assessment value, the transaction value to be first rejected based on legal permissible ground as indicated in the valuation Rules. He has also referred to Hon'ble Supreme Court decision in the case of Eicher Tractors Ltd. v. CC, 2000 (122) ELT 321 (S.C) in support of his finding that transaction value cannot be rejected without clear and cogent evidence produce by the department with regard to quality, import of origin and place and time of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, it is for the assessing officer to discount the documents with valid reasons in order to reject the declared value and thereafter to proceed with the re-assessment, after due enhancement. Explanation (1)(i)(iii)(a) in Rule 12 appears to be applicable 5 Customs Appeals Nos. 50503-50504/2017 and 50519-50520/2017 to the present case. In other words, the assessing officer having noticed higher value of contemporaneous import raised the doubt regarding the correctness of declared value. The legal provisions mentioned in the Explanation clearly stipulates that the contemporaneous value should be significantly higher for identical or similar goods at or about the same time, in a comparable commercial transaction. We find in the present case due examination about this crucial aspect has not been done by the assessing officer and comparison based on the contemporaneous import is not proper. Further, the contractual arrangements and invoices should not be rejected in the absence of any evidence to question their authenticity. As submitted by the appellants, NIBD data is a guidelines and an indicator for the assessing officer and it cannot be a substitute for assessable value. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely on the basis of NIDB data. The case involved the rejection of declared values for imported polyester fabrics from China, with the adjudicating authority re-determining the values based on NIDB data. Both the Commissioner (Appeals) and the original authority upheld the enhanced valuation, prompting the appellants to challenge those decisions. The CESTAT concluded that NIDB data alone, without supporting evidence or clarity on relevant parameters, could not form the basis for for re-determining values and set aside the enhancement. On a consideration of the principles articulated by the Supreme Court in Eicher Tractors, the CESTAT had held: "4.3 The dispute in the present case is regarding the valuation of the goods imported by the Appellants. The Assessing Authority re-assessed the imported goods at values higher than what was declared by the Appellants in the Bills of Entry. The revenue enhanced value as per NIDB data. We observed that the transaction value declared by the importer should form the basis of assessment unless the same is rejected, for the reasons set out in Rules of the Customs Valuation Rules. Section 14 of the Customs Act, 1962 read with Customs Valuation Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) "the value of imported goods shall be the transaction value". "Transaction value" has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4 (1) in turn states : "The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules." 8. Reading Rule 3 (i) and Rule 4 (1) together, it is clear that a mandate has been cast on the authorities to accept the price actually paid or payable for the goods in respect of the goods under assessment as the transaction value. But the mandate is not invariable and is subject to certain exceptions specified in Rule 4 (2), namely :- (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to same condition or consideration for which a value cannot be determined in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an those under assessment to be the basis of the assessable value. Thus, Rule 5 allows for the transaction value to be determined 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. 14. It is only when the transaction value under Rule 4 is rejected, then under Rule 3(ii) the value shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar to the case before us, it is dealt with in some detail. 20. Mirah Exports Pvt. Ltd. along with other importers had imported bearings at high rates of discount. The declared value was rejected by the Customs authorities, on the basis of the price list of the vendors. This Court set aside the decision of the respondent authorities accepting the argument that a discount is a recognised feature of international trade practice and that as long as those discounts are uniformly available to all and based on logical commercial bases, they cannot be denied under Section 14. It appears from the judgment that a distinction was drawn between a discounted price special to a particular customer and discounts available to all customers. 21. As already noted all these cases dealt with imports made prior to the coming into force of the Rules in 1988. Now the 'special considerations' are detailed statutorily in Rule 4 (2). 22. In the case before us, it is not alleged that the appellant has mis-declared the price actually paid. Nor was there a misdescription of the goods imported as was the case in Padia Sales Corporation. It is also not the respondent's case that the particular import f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transaction value under Rule 12, there has to be a reasonable ground and it cannot be rejected merely on the ground that similar goods have been imported at higher value without examining the applicability of Rule 5 of Customs Valuation Rules, 2007. 4.5 The enhancement of the value done by the Customs department is only on the basis of value of contemporaneous imports. In this context we find that the relevant provisions for valuation under Customs Act are as below: Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Rule 12 - Explanation 1(iii) The Proper Officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include - (a) The significantly higher value at which identical or similar goods imports at or about the same time in comparable quantities in a comparable commercial transaction were assessed; Rule 5 - Transaction of value of Similar goods :- (l) Subject to the provisions of Rule 3, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as the goods being valued Provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar goods is not established, value cannot be enhanced. In the case of Commissioner of Customs v. Modern Overseas [2005 (184) E.L.T. 65 (Tri.-Del.)] NIDB data was held to be insuffient, in the absence of clarity about various parameters. List of such decisions is unending and it is sufficient to say that NIDB data has been held to be insufficient for enhancement of value, in the absence of any other independent evidence. Admittedly in the present cases, there is no such evidence produced by the Revenue except reference to the NIDB data. In view of the discussions above, we hold that in the present case, the enhancement of value on the basis of NIDB data cannot be accepted." 102. Again, in HS Chadha vs. Commissioner of Customs Final Order Nos. 50063-50066/2020 dated 09 January 2020, the Principal Bench of the CESTAT, New Delhi, held that the declared value of imported tyres must be accepted as the Revenue had failed to establish undervaluation. It noted that tyres are freely importable, and no contemporaneous import data or evidence was provided to justify discarding the transaction value. Citing the judgments of the Supreme Court in Sanjivani Non-Ferrous Trading and South India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limitations besetting the usage of NIDB data as the sole basis for re-determining transaction values. It is pertinent to note that Rule 10A of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 [1988 Rules], as analysed by the CESTAT in this decision, was similar to Rule 12 of the 2007 Rules. The CESTAT ruled in favour of the appellant, holding that NIDB data alone would be insufficient for value reassessment without corroborative evidence or contemporaneous import comparisons. This decision underscored the importance of comprehensive evidence and procedural compliance in customs disputes, cautioning against arbitrary reliance on NIDB data. The CESTAT had on that occasion observed as follows: "9. After considering the submissions of both the parties and perusal of materials on record, we find that the goods imported by the appellant are, admittedly, not prohibited goods as per Rule 133 read with Rule 43-A of the Drugs and Cosmetics Rules, 1945 or any other law for the time being in force. We also find that representative samples of the imported goods were drawn and the Assistant Drug Controller has issued No Objection for the release of the said goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence. The legal position so articulated would ensure fairness and transparency in the determination of import values. The body of precedent noticed above have in unison held that mere reliance on external data without corroborative evidence or clear justification would fail to meet the tests and principles underlying the provisions enshrined in the 1988 Rules and 2007 Rules. They correctly lay emphasis on the imperatives of a reasoned approach to customs valuation and a deviation from declared values being founded on tangible and justiciable material. A reassessment or rejection of declared value would thus have to necessarily be established as being compliant with the aforenoted requirements of pre-eminence. Relieving the respondents of this obligation would clearly lead to pernicious consequences. V. DISPOSITION 105. Accordingly, and for all the aforesaid reasons, we would answer the question framed in the affirmative and in favour of the importers. The appeals are consequently allowed and the impugned orders of the CESTAT set aside. The order of the Commissioner (Appeals) shall in consequence stand restored. 106. We would also allow CUS.A.C. 1/2023 and set aside the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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