The Chandigarh Bench of Customs,Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that the value of imported goods cannot be enhanced solely based on a Directorate of Revenue Intelligence (DRI) alert.
Garg Impex,appellant-assessee,was engaged in importing and trading Polyester Knitted Fabric from China. The assessee imported several consignments and filed Bills of Entry, declaring the value based on commercial invoices and submitting all required documents. On examination, the goods matched the declarations.
However, the Assessing Authority(AA) relied on a DRI alert and proposed a higher import value, assessing the goods provisionally at USD 2.80 to 2.85 per kg. The assessee paid the duty on this enhanced value to avoid delays and additional charges.
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Later, the AA confirmed the higher value and denied the benefit of Countervailing Duty(CVD) exemption under Notification No. 30/2004-CE. Additionally, benefits under other exemption notifications related to customs duty and haulage charges were denied for some consignments.
The assessee filed appeal, but the Commissioner (Appeals) rejected them, upholding the higher value based on the DRI alert. The Commissioner also noted that the assessee had not challenged the denial of CVD exemption earlier.
The assessee then appealed before the tribunal.
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The two member bench comprising S.S.Garg(Judicial Member) and P.Anjani Kumar(Technical Member) reviewed the arguments and documents from both sides and focused on the issue of whether the value of the imported goods could be increased based on the DRI alert.
The appellate tribunal noted that previous decisions by various benches had clearly held that the declared value could not be raised just because of a DRI alert. It referred to earlier rulings in the assessees’ own cases and similar cases where the tribunal set aside orders that increased value based on the DRI alert.
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The tribunal also pointed out that Customs Valuation Rules, not the DRI alert, governed when and how the value could be enhanced. Therefore, the value could not be increased without properly rejecting the declared transaction value.
Following these past decisions, the CESTAT concluded that the value could not be enhanced solely due to the DRI alert and overturned the orders that had done so.
The tribunal set aside the order and allowed the appeal.
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