Export Value of Goods of Another Country cannot be Adopted as Direct Basis for Determination of Value of Goods under Residual Method: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the export value of goods of another country cannot be adopted as a direct basis for the determination of value under the residual method. 

Shree Electro Polytex, the respondent assessee declared the value of goods which they export as per the Customs Valuation Rules,1988.

The revenue appealed against the order passed by the Commissioner (Appeals) relating to issue of the valuation of goods and upheld the value declared by the assessee and reversed the order of adjudicating authority through the order. 

Himanshu P Shrimlai, the counsel for the revenue contended that the valuation of the goods was enhancing the transaction value on the basis of Caveat Free documents and a copy of the offer letter / proforma invoice extracted from the laptop/personal computer. 

J Vyas, the counsel for the assessee contended that the residual method further provides that the value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade when the seller or buyer had no interest in the business of other and price was the sole consideration for the sale or offer for sale. 

The Bench observed that the determination of valuation based on the type of evidence placed on record cannot be sustained and therefore the quoted value as well as the value declared to Hong Kong Customs by the supplier cannot be used to reject and redetermine value under Customs Valuation Rules.

Also held that the findings of the Commissioner (Appeals) as correct based upon evidence on record and the documents which are obtained through international co-operation are so casually dealt with by the department in its litigation. 

The two-member bench comprising Somesh Arora(Judicial) and Raju (Technical) upheld the decision of the Commissioner (Appeals) while dismissing the appeal filed by the revenue. 

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