Revenue Fails to Prove Undervaluation of Imported Goods of ‘Zinc Scrap’ so as to Reject Transaction value in Invoice: CESTAT quashes Demand [Read Order]

The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the demand on the ground that the revenue failed to prove the undervaluation of imported goods of zinc scrap to reject the transaction value in the invoice. 

V. K. Metcast Pvt. Ltd, the respondent-assessee had filed three bills of entry for clearance of imported goods Zinc Scrap, and Saves/Scope which were imported from Olympic Metal, Miami, USA. 

The revenue applied against the order passed by the Commissioner (Appeals) for rejecting the decision of the assessing officer by stating that the assessing officer failed to elaborate as to how the bills of entries referred for enhancement are comparable with the goods imported through disputed bills of entries. 

Mahesh Bhardwaj, the counsel for the department contended that it was a case of undervaluation by the importer and therefore declared value had been rightly rejected by the assessing authority. 

Further submitted that there was an undervaluation of imported goods which was intentionally done by the assessee and the demand was raised as per the law and liable to be sustained. 

Randhir Singh, the counsel for the assessee contended that the transaction value cannot be discarded as the revenue had failed to produce any evidence to prove undervaluation as mandated under the rules. 

The Bench observed that there was no evidence that the bill of entries relied on by the revenue as contemporaneous imports were of similar goods at the same commercial level and in substantially the same quantity and had their origin from the same country. 

Also held the transaction value had to be adopted as the correct value and rejection thereof was contradictory and unsustainable. 

A single-member bench comprising Binu Tamta (Judicial) held that the revenue was unable to provide any clinching evidence to prove undervaluation by the importer to reject the transaction value given in the invoice while dismissing the appeal filed by the assessee. 

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