Transaction Value declared by Importer deemed as Assessable Value unless rejected for Specific Reasons under Customs Valuation Rules: CESTAT [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the Transaction Value declared by the Importer shall be deemed to be the Assessable Value unless the same is being rejected for Specific Reasons under the Customs Valuation Rules, thus invalidated the enhancement of value solely based on National Import Database (NIDB Data).

The revenue sought to revise the assessable value by rejecting the value declared by the assessee, Kunj Bihari Textiles.

The issue was related to the import of a mix lot of Polyester Knitted Fabrics.

Shri Vikas Mehta appeared for the appellant-assessee and Shri Anand Kumar, Superintendent, appeared for the respondent revenue.

The CESTAT referred to a previous case involving M/s. Sedna Impex India P. Ltd. and observed that the transaction value declared by the importer should be the basis of assessment unless it is rejected for specific reasons outlined in the Customs Valuation Rules.

The bench cited Section 14 of the Customs Act, 1962, along with the Customs Valuation Rules, which state that the transaction value in the ordinary course of commerce should be considered the assessable value.

The Customs Valuation Rules provide a step-by-step methodology for determining the assessable value. The primary requirement for re-determination of the value is the rejection of the transaction value based on cogent reasons prescribed in the Rules.

The bench emphasised that the rejection of the declared value on the Bill of Entry should be supported by a thorough examination of evidence and justifiable reasons.

Referring to a Supreme Court case Eicher Tractors [2000 (122) E.L.T. 321 (S.C.)], the bench highlighted that the transaction value, unless falling under specified exceptions, should be accepted as the value for customs duty assessment.

The bench noted that the revenue authorities failed to provide cogent evidence or reasons to justify the rejection of the transaction value.

Additionally, the bench found that the enhancement of the value solely based on NIDB data was not legally valid.

The tribunal clarified that NIDB data was insufficient as the sole basis for enhancing the value without establishing the contemporaneous import of identical or similar goods, referring to previous cases to support this conclusion.

Regarding the appellant's eligibility for exemption under Notification No. 30/2004-CE, which provides exemption from Countervailing Duty (CVD), the bench found that a similar issue had been decided in favour of the appellant in M/s Sedna Impex India Pvt. Ltd.

The bench determined that the appellant was entitled to the exemption notification as they did not need to fulfil the condition of non-availment of Central Value Added Tax (Cenvat) Credit on inputs/capital goods.

In the result, the two-member bench consisting of Shri Raju (Technical Member) and Shri Somesh Arora (Judicial Member) held that the declared transaction value should be accepted unless there are valid reasons for rejection based on the Customs Valuation Rules.

The bench further ruled that the enhancement of value solely on the basis of NIDB data was not valid.

The bench also clarified that the assessee is also found eligible for exemption from CVD under Notification No. 30/2004-CE.

To Read the full text of the Order CLICK HERE

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