No Contemporaneous Imports of Goods in the Absence of Evidence, Rejection of Transaction value not valid: CESTAT [Read Order]

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no contemporaneous imports of goods in the absence of evidence and rejection of transaction value are not valid.

The revenue challenged the order passed with respect to Wall Street Impex and Forever Import & Export Co. Officers of DRI received intelligence and suspected that the goods imported by the Respondent importers were mis-declared, undervalued, and imported in violation of the restrictions on imports imposed by the Ministry of Electronics and Information Technology and initiated investigations and issued a Show Cause Notice.

The DRI rejected the declared values of the imported goods under Rules 12 of the Customs Valuation (Value of imported goods) 2007  and re-determine it under Rule confiscate the goods under sections 111(d) and 111(m) for violation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Further, confiscated the goods under sections 111(d) and 111(m) for importing the goods without obtaining a NOC from the Wireless Planning and Coordination wing of MEITY, and imposed penalties under sections 112(ii) and 114AA of the Act.

The importers (Respondents )challenged the order of the lower authority before the Commissioner (Appeals) on the Valuation, confiscation and quantum of penalties imposed. Revenue appealed against the order assailing the acceptance of the declared value in some Bills of Entry and non-imposition of penalty on the Customs Brokers. The Commissioner (Appeals) rejected the Revenue’s appeal. He partly allowed the appeal by the importers directing the values to be re-determined based on contemporaneous imports and reducing the fine and penalties. 

On some goods, the levy is based on quantity (specific duty), and for other goods, it is based on value (ad valorem). If the duty is to be levied based on value, valuation for the purpose has to be done as per Section 14 and Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

The Chartered Engineer’s certificate determines value through the Deductive method (as per Rule 7). Valuation under Rule 7 becomes relevant only if the requirements for rejection of the transaction value under Rule 12 are first met and then it is also found that the value cannot be determined as per Rules 4 and 5.  We, therefore, uphold the decision of the Commissioner (Appeals) in this regard.

A Coram consisting of P V Subba Rao, Member(Technical) and Dr Rachna Gupta, member(judicial)  observed that as per Rule 4 the value shall be the value of contemporaneous imports of identical goods and if such a value is not found, then as per Rule 5, the value shall then be the value of contemporaneous imports of similar goods. Only if neither is available, Rules, 7 can be resorted to.

The Tribunal held that the Revenue’s submission cannot be accepted that there were no contemporaneous imports of either identical goods or of similar goods as no evidence has been produced before us, such as, say, a report from the Customs EDI system that the disputed goods including such common goods such as ‘laptop bags’, ‘chargers’, etc. or similar goods were not imported by anyone else except the respondents. The Tribunal held that the  Commissioner (Appeals) was correct in holding that the value should be determined based on contemporaneous imports and for that purpose remanding the matter to the original authority. The impugned orders are upheld and Revenue’s appeals are rejected

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.