CESTAT upholds redetermination of value of Diaphragm Boost Pump carried out by customs authorities under Rule 7 of Customs Valuation Rules [Read Order]

The Delhi Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the redetermination of the value of the diaphragm boost pump carried out by the customs authorities under Rule 7 of the Customs Valuation Rules.

The officers of Customs (SIB) ICD (Import) obtained specific information indicating that the products under Bill of Entry No. 4873621, covered by container No. BSIU2052206, were significantly discounted.

In light of this, CHA M/s. Abhinav Cargo Movers filed Bill of Entry No. 4873621 on behalf of the importer, appellant M/s. Shree Shyam Enterprises, resulting in Alert No. 04/2016-17 being issued. The goods in the said Bill of Entry were examined 100% by SIIB officers, and the entire proceedings were recorded under Panchnama.

However, the goods were detained for further investigation on a reasonable belief that the subject goods were undervalued with an intent to evade payment of customs duty. The container was again stuffed with the same goods and sealed with Custom Seal.

Upon completion of examination proceedings, it was advised to ask the importer to store the goods in the Customs Bonded Warehouse under Section 49 of the Customs Act, 1952, to avoid incurring demurrage and detention charges of the container.

Sanjeev Garg, Authorized Representative of the appellant, was recorded under Section 108 of Customs Act 1962. During the authorization, the investigating officer showed him computer printouts of eBay for identical goods, showing a selling price of Rs 1799/- per piece, and at Alibaba, the retail sale website, the price shown was 15-16 USD (FOB) for a quantity of 100 pcs. The appellants endorsed no objection for ascertaining the value of the goods.

The assessable value was worked out based on the lowest rate available on the eBay website, and the appellants accepted the redetermined value. The similar modus operandi was acknowledged for past consignments, and a show cause notice was issued to the appellant for redetermining past imports under Rule 7 of the Customs Valuation Rules, 2007, read with Section 14 of the Customs Act, 1962.

Aggrieved by the department's order, the appellant filed an appeal before the tribunal. L.B. Yadav, Counsel for the appellant, relied upon the decision of Ajex & Turner Wire Dies, arguing that clearing goods at an enhanced value to save demurrage charges does not imply consent for value enhancement.

Further argued that in the absence of any contemporaneous import, mere internet prices are not reliable evidence to discard the transaction value. Nagendra Yadav, representing the department, argued that Sanjeev Garg had admitted the redetermined value via three separate statements, none of which were ever retracted.

The tribunal observed that appellants imported 4 consignments of Diaphragm Boost Pump in the past, and one live consignment was detained for investigation. The Assessing Officer had sufficient evidence for rejecting the transaction value, resorting to Rule 3 (4) of the Customs Valuation Rules, 2007.

Thus, since the value of identical and similar goods at the contemporary import time could not be ascertained, resorting to valuation under Rule 7 of the Customs Valuation Rules by the Department is legally sustainable in the facts and circumstances of this case.

After analyzing the arguments and submissions of both parties, the two-member bench of Dr. Rachna Gupta, Member (Judicial), and P.V. Subba Rao, Member (Technical), upheld the redetermination of the value of the diaphragm boost pump carried out by the customs authorities under Rule 7 of the Customs Valuation Rules.

To Read the full text of the Order CLICK HERE

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Shree Shyam Enterprises vs Commissioner of Customs (Import) , 2023 TAXSCAN (CESTAT) 1575 , L.B. Yadav, Mayank Sharma , Nagendra Yadav