The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter for fair assessment because customs authorities failed to provide detailed contemporaneous import data while increasing the customs duty ( CD ) on glass beads imported by Banaras Beads Ltd.
Banaras Beads Ltd, the appellant, imported glass beads under three bills of entry in 2013 and declared transaction values for customs purposes. Customs authorities rejected the declared values and re-assessed them at higher rates of US$1.60/kg and US$1.75/kg for different consignments.
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The customs authorities justified the re-assessment under Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, citing contemporaneous imports of similar goods. The Commissioner of Customs (Appeals) upheld the valuation enhancements in three separate orders.
The appellant challenged these orders before the CESTAT, arguing that the authorities did not provide access to the relied-upon contemporaneous import data, preventing them from effectively challenging the valuation.
The appellant’s counsel relied on legal precedents such as Eicher Tractors Ltd v. Commissioner of Customs and Dujodwala Products Ltd v. Commissioner of Customs, which explained the need for evidence and procedural fairness in valuation disputes.
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The customs authorities countered that the enhanced valuation was based on valid contemporaneous imports of similar goods and complied with Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) observed that procedural fairness requires sharing relied-upon documents with the importer.
The tribunal observed that the Customs Valuation Rules define “similar goods” with specific criteria such as quality and reputation, and compliance with these rules must be verifiable. The tribunal found that denying access to the relied-upon bills of entry prevented Banaras Beads Ltd., from effectively challenging the re-assessment.
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The orders of the Commissioner of Customs (Appeals) were set aside and the tribunal remanded the matter to the original customs authority for re-assessment directing them to share the relied-upon bills of entry with Banaras Beads Ltd and provide the appellant an opportunity to present their issue. The appeal was allowed.
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