The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that the rejection of value declared on bill of entry being serious act should be supported by evidence and compelling provision.
The original adjudicating authority rejected the value declared by the appellant and re-determined the value of goods as per NIDB data under Rules of Customs Valuation Rules, 2007 and assessed bills of entry. Therefore, the Appellant challenged the assessment before the Commissioner ( Appeals ). However, the Commissioner (Appeals) upheld the order of original adjudicating authority. Aggrieved by the said, the appellant filed the present appeal.
The dispute in the present case is regarding the valuation of goods that were imported by the Appellant. The Assessing Authority re – assessed the imported goods at values that were higher than that declared by the Appellant in the Bills of Entry. The Revenue has enhanced the value of the said goods relying on NIDB data. It is observed that the Custom Valuation Rules outline a detailed chronological methodology that should be adopted in order to reject and re – determine assessable value. Section 14 of the Customs Act 1962 read with Custom Valuation Rules makes it abundantly clear that transaction value in the ordinary course of commerce is to be taken as assessable value.
Vikas Mehta, Counsel appearing on behalf of the Appellant submitted that the lower authorities have erred in invoking the provisions of Rule 5 of Customs Valuation (Determination of Value of Imported Goods ) Rules, 2007. The Adjudicating authority without any ground for rejection of declared value have directly invoked Rule 5 of the Customs Valuation Rules, 2007.
It was also argued that the Commissioner ( Appeals ) has wrongly held the Appellant in contravention of Section 11 of the Foreign Trade ( Development and Regulation ) Act 1992. In holding so, the Appellant has been alleged to have not stated the true value of the imported goods to the assessing officer when there was no evidence to show that the value of goods was incorrect to begin with whereas on the contrary the Appellant has claimed to submit all the relevant documents which were assessed by the assessing office.
Prashanth Tripathi, Superintendent (AR) appearing on behalf of the Revenue has reiterated the findings of the impugned order.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “In the event where transaction value is rejected thereafter Custom Valuation Rules need to be satisfied for enhancement of the value. In the instant case no basis of such re-assessment can be made out as the department has failed to warrant reasons for rejection of transaction value in the first place. We observe that rejection of value declared on a Bill of Entry is a serious action that should be supported by compelling provision, evidence and justifiable reasons.”
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