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Commissioner Customs (EP), Mumbai Vs. Viraj Impex Pvt. Ltd. - (Customs, Excise and Service Tax Appellate Tribunal) (18 Jan 2019)

Declared price/transaction value is required to be accepted unless there are valid reasons for rejection of such value



Present two Appeals have been filed by Revenue from the common impugned order passed by the Commissioner of Customs (Appeals), by which Commissioner allowed both the Appeals filed by the Respondent herein, set aside the order passed by the Adjudicating Authority and directed that the declared price be accepted as transaction value in each case and the bills of entry be reassessed to duty accordingly.

In present matter, the revenue wants to enhance the declared value of Hot Rolled Coils (HR Coils) on the bases of alleged contemporaneous imports Hot Rolled Plates (HR Plates). Issue involved in present matter is whether the HR Steel Plates, with which the adjudicating authority has compared the HR Coils, are really similar goods in terms of definition of similar goods.

The valuation of imported goods is required to be done in terms of Section 14 of Customs Act, 1962 read with the Customs Valuation Rules, 2007. The transaction value of imported goods can be rejected only as per the provisions of Rule 12. As per Clause (iii) of explanation under Rule 12, if contemporary import of identical or similar goods is noticed at the higher price, invoice value can be rejected and same can be determined under Rule 5 to 9 of the Rules. The said Rule 12 provide for proper officer seeking clarification from the importer to provide further information to satisfy the correctness of the declared assessable value. In the present case, the Respondents did submit the invoice, irrecoverable LC and supporting contract documents with reference to the impugned consignments. Nothing more is required with the importer to further substantiate the value. Merely because the assessee failed to submit any payment certificate or Bill of Exchange, the Assessing officer rejected the value declared by the respondent/assessee. The Assessing officer has to give valid reasons in order to reject the declared value and thereafter to proceed with the re-assessment, after due enhancement.

HR Coil and HR Steel Plates cannot be said to be similar or identical goods. If the revenue is rejecting the value declared by the Respondent, then they are bound to prove beyond reasonable doubt that the goods compared with are similar goods or identical goods. HR Coils and HR Plates cannot be termed as one and the same for the purpose of contemporaneous value. Both the goods are different in nature and therefore the values relied upon by the Department for enhancement of declared value is not legally sustainable. It is not the case of revenue that it is either a Hawala transaction or remittance of additional consideration by the respondent to the exporter, over and above the declared transaction value. The value declared by the Respondent was to be remitted through the banking channel.

The Revenue has failed to establish its claim on the basis of contemporaneous import. The Adjudicating Authority has erred in rejecting the declared price/transaction value of the goods imported by the respondent by taking recourse to Rule 12 of Rules, 2007. Section 14 of Act as well as Rules, do not sanction such a method, as adopted by the Adjudicating Authority, for redetermination of assessable value. The declared price/transaction value is required to be accepted unless there are valid reasons for rejection of such value as provided in Customs Valuation Rules. In the present case, no valid reasons have been recorded by the Adjudicating Authority for rejecting the declared price/transaction value of HR Coils except the contemporaneous import price of HR Steel Plates, which is not valid. Therefore, no fault with the impugned order and the Appeal filed by Revenue is accordingly dismissed.


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