Data from NIDB cannot be Basis for Enhancement of Value under Customs Act: CESTAT [Read Order]

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that  datafrom the National Import Database (NIDB) cannot be the basis for enhancement of value under the Customs Act, 1962. The judicial member Rachna Gupta's single bench has ruled that the department still has the responsibility of proving the aforementioned claims.  In the event that the burden is not met, the appellant's statement or payment of the differential duty will not be enough to waive the need to challenge the reassessment.

At ICD, Tughlakabad, Seafox Impex, the appellant/assessee, submitted the Bills of Entries for the import of a mixed batch of knitted fabrics made entirely of polyester from China.  As stated by the appellant in those bills of entry, the assessment authority had increased the valuation.  The difference duty had been paid by the applicant.  However, three distinct appeals were made (per the bill of entry) because the present was upset about the value enhancement.

The government argued that following careful verification, the appropriate officer/assessing officer in the current appeals had reached the decision for value improvement.  Following the aforementioned value boost, the appellant willingly paid the difference in duty.  The aforementioned action by the appellant implies that the appellant has accepted the reassessment and enhancement.  Consequently, the appropriate officer was not supposed to issue a speaking order in accordance with Section 17(5) of the Customs Act.

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The tribunal concluded that there was no reasonable doubt regarding the accuracy of the transaction value or the value declared by the appellant in the contested Bill of Entry because the appropriate official had not verified, examined, or tested the items.  Prior to rejecting the aforementioned value, the department apparently and admittedly did not complete the investigation required by Rule 12 of the Valuation Rules.  Additionally, no exercise was conducted as required by Customs Act Sections 4 and 17.  The department solely used the NIDB data to reevaluate the products' value at a higher price and reject the value stated in the Bills of Entry.

While granting the appeal, the tribunal ruled that the confirmation of differential duty violated both Rule 12 of the Customs Valuation Rules and Section 17(4) of the Customs Act, and as a result, it could be revoked.

To Read the full text of the Order CLICK HERE

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