Invoice of Manufacturer is Sufficient to establish ‘Transaction Value’, No Revaluation without further Investigation and Evidence in Contrary: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai bench has held that no revaluation without further investigation and evidence in contrary since invoice of the manufacturer is sufficient to establish ‘transaction value’.

The appellant, Acmechem Ltd filed an appeal before CESTAT against the confirmation of the order by the Commissioner of Customs (Appeals), for the enhancement of assessable value from US$ 2.95 per kg to US$ 3.95 per kg on the import of ‘DCBS N’ or ‘N Dicyclohexyl-2 Benzothiazole Sulfenamide’, a rubber accelerator, against five bills of entry comprising five consignments of 12000 kgs each.

The counsel for the appellant submitted that though proper sales contract and sales invoice for a price of US$ 2.95/kg were submitted by the appellant before the authority, in the absence of any evidence to the contrary and without the preliminary show cause notice the respondent assessed the transaction value at US$ 3.95/kg. the appellant further submitted that the ‘proper officer’ under section 17 of Customs Act, 1962 had failed to comply with the mandate therein for the issue of speaking order justifying the re-valuation.

The Tribunal observed that the invoice of the manufacturer is sufficient to establish the value therein to be the ‘transaction value’ The credibility of the impugned transaction, being one between the manufacturer and the appellant, should not have been called into question on the foundation of a stray bill of entry alone without further investigation and evidence.

The Tribunal further observed that the necessary pre-requisite in rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had not been set in motion. The entire process, commencing with the failure to issue a notice of intent and culminating in the refusal to issue a speaking order, appears to be devoid of any cognition of the principles of natural justice.

The Coram of Mr. C J Mathew, Member (Technical), and Mr. Ajay Sharma, Member (Judicial) while allowing the appeal has held that “even though the principles of natural justice stand breached by both the lower authorities, that need not concern the disposal of this dispute which, by the absence of evidence to displace the declared value, calls for the impugned order be set aside on merit”.

Advocate Mr. J C Patel appeared for the appellant and Mr. Manoj Das appeared for the respondent.

To Read the full text of the Order CLICK HERE

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