The Chennai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) ruled that re-determination of valuation of Imported car from United Arab Emirates ( UAE ) based on Australian prices is invalid without contemporary imports of comparable goods.
The adjudicating authority observed that, (i) the importer has not submitted Type Approval/COP by the listed agency country of manufacture hence has not complied as Rule 126 of Motor vehicle Rule 1989; (ii) Proof of compliance to conformity of Production (COP) as under rule 126A of the Central Motor Vehicles Rules, 1989. (iii) The vehicle was not new as it has been sold once before importation and cannot be considered as a new vehicle as per import licensing note (2) (1) of Chapter 87 of ITC-HS. (Indian Trade Classification Harmonized System). That these amounted to violation of the policy conditions no. (2)(II)(a),(2)(II)(b) and (2)(II)(c) of Chapter 87 of ITC-HS
On the issue of valuation it was observed that when the adjudicating authority doubted the declared price, then the re-determination of value should be based on some comparable evidence, and that the model of car adopted for comparison of value is the value of car from the Australian website which is not the same. The value re-determined on the basis of the value of cars in Australia was held to be not sustainable. The order passed by adjudicating authority was set aside by the Commissioner (Appeals) and the appeal filed by the importer was allowed.
On perusal of the Vehicle Export Certificate dated 19.03.2013 it was seen that the vehicle was registered in UAE in 2013 as per condition at Sl. No. (2)(I)(c) Of the Policy notes to chapter 87 states that ‘vehicle has not been registered for use in any country according to the laws of the country prior to importation into India’. The vehicle imported having been registered in UAE cannot be considered as a new vehicle.
Mr. S Sankaranarayanan appeared and argued for the importer/ respondent. Argued that the original authority has not given any reasons for rejecting the transaction value. Further, the value of cars imported into Australia cannot be adopted to enhance the value as such value differs based on the destination of shipment. The Commissioner (Appeals) have correctly concluded that the rejection of transaction value and the redetermination of value on the basis value of the car imported in Australia cannot be adopted. He prayed that the appeal may be dismissed.
The bench noted by the adjudicating authority that there are no contemporaneous imports of identical or similar goods. In the absence of contemporaneous import of goods at higher price, the invoice price submitted by the importer should be taken as the basis for assessable value if there are no grounds to reject transaction value.
The two-member bench of the tribunal, composed of Vasa Seshagiri Rao (Technical Member) and Sulekha Beevi C.S (Judicial Member), concluded that the Commissioner (Appeals)’s decision to grant exemption benefits and revoke the goods confiscation order was both legally sound and appropriate. They deemed the enhancement of value as unjustified. Consequently, the tribunal found no grounds for overturning the contested decision. Therefore, the Department’s appeal was dismissed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
