Enhancement of Value of Imported Goods without Giving Proper Reasons to Reject Transaction Value cannot be Sustained: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the enhancement of value of imported goods without giving proper reasons to reject transaction value cannot be sustained.

The appellant in the present matter is M/s. Vikram Trading Company and the appellant filed bills of entry for import of polished porcelain tiles.

The Directorate General of Valuation, Mumbai, alerted the field formations about under valuation of import of ceramic tiles and consequently the consignments were provisionally assessed by taking the price as USD 10 per sq.m. Thus, the bills of entry were assessed provisionally pending verification of the declared values by taking bond and bank guarantee from the appellant.

The value of the goods imported from Malaysia was enhanced under Rule 8 of the Customs Valuation Rules 1988 read with section 14 of the Customs Act 1962, vide order dated 23.12.2010. The appellant contented that they did not receive the said order in original and had received the same much later after filing RTI application.

In the remand proceedings the Commissioner (Appeals) directed the department to produce evidence as to the proof of service of order-in-original upon the appellant. No such evidence was produced by the department and the Commissioner (Appeals) held that the contention of the appellant that they had received the order-in-original only on 05.06.2015 pursuant to their application under RTI was acceptable.

The Counsel for the appellant asserted that the enhancement of value without giving reasons to reject the transaction value is erroneous and illegal. Further, there is no evidence to show that the contemporaneous imports are comparable in regard to quality and quantity of similar goods. The Courts have always cautioned in using the NIDB data for enhancement of declared value.

A Two-Member Bench comprising Sulekha Beevi CS, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “we are of the considered opinion that the enhancement of value of imported goods without giving proper reasons to reject the transaction value cannot be sustained.”

To Read the full text of the Order CLICK HERE

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